Ascott Residence Trust - DBS Research 2022-08-05: Strongest Recovery Since Pandemic; RevPAU Almost Doubled Y-o-y

• Ascott Residence Trust (SGX:HMN) reported a 1H22 revenue of S$267.4m (+45% y-o-y). Higher revenue was due to acquisition contributions primarily within the longer-stay lodging segment, as well as the Lyf One-North which launched in Jan’22. Apart from inorganic growth, RevPAU rose 60% y-o-y in 1H22 to S$96.
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• Gross profit (GP) rose 44% y-o-y to S$118.2 for the half year. 1H22 DPU rose 14% y-o-y to S$0.0233, or 120% y-o-y to S$0.0178, excluding one-off items such as distribution top up (amounting to S$20m in 1H21).
• Income sources continued to be well-diversified, with stable income sources – comprised of master lease and management contract with a minimum guaranteed income (MCMGI) and longer-stay assets – contributed to 68% of 1H22 gross profits.
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Robust financial metrics.

• Ascott Residence Trust remains well-equipped on the capital management front with stable gearing of 37.5%, a debt headroom of S$1.8bn (to target gearing of 50%).
• Average cost of debt stood at 1.7% with a weighted average debt expiry of 3.1 years (WADE of 4.6 years for floating loans) and ~80% of debt on fixed rates.

RevPAR recovery led by all global markets except Japan and China

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Geraldine WONG DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-08-05 SGinvestors.io

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