Far East Hospitality NPI slips 2.4% in Q2

However, NPI rose by 3% YoY in the first quarter of the year.

Far East Hospitality Trust’s (Far East H-Trust) net profit income (NPI) dropped by 2.4% YoY to $25.1m in Q2 from $25.7m last year, an announcement revealed. Revenue for the quarter also dropped 2.1% YoY from $28.5m to $27.8m.

Also read: Far East Hospitality Trust NPI up 9% to $25.07m in Q1

However, overall NPI for the first half of 2019 grew 3.3% YoY to $50.1m from $48.7m, whilst revenue also climbed 2.7% YoY to $55.7m from $54.3m.

Income available for distribution extended the downward trend that can be traced to Q1, falling 7.4% YoY during the quarter to $17.5m from almost $19m previously. On a half-year basis, it fell 4.5% YoY to $35m.

The distribution for stapled security (DPS) also took a large hit, declining 9.9% YoY to $0.0091 in Q2 compared to $0.01 over the same period last year. On a half-year basis, DPS declined by 6.7% YoY to $0.0182 from $0.0195 previously.

Gerald Lee, CEO, attributed the dismal quarterly performance to a weak hotel portfolio, soft corporate demand and the absence of large-scale events during the period.

The financial statement stated that the average occupancy of hotels remained healthy at 88.1% in Q2 whilst serviced residences (SR) was more stable this quarter. Average occupancy of SRs decreased 1.6pp to 81.9% whilst the ADR was higher by 5.0%. Correspondingly, revenue per available unit (RevPAU) of the SR portfolio grew 3.0% YoY to S$174. Meanwhile, revenue from the retail and office spaces declined 1.2% YoY to $5.5m in Q2.

However, the manager said that it remains positive about the prospects of the industry. The statement noted that the forecasted growth of arrivals by 1% to 4% in 2019 against an expected slower pace of increase in hotel room supply will help support the recovery in the Singapore hotel sector.