Frasers Hospitality Trust - DBS Research 2022-11-04: Strengthened Balance Sheet Post Divestment Of Sofitel Sydney Wentworth

• Frasers Hospitality Trust (SGX:ACV) reported 2H22 gross revenue and NPI of S$51.8 (+17% h-o-h) and S$37.9m (+20% h-o-h), respectively. See Frasers Hospitality Trust's announcement dated 04 Nov 2022.
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• Income available for distribution rose 66.3% to S$35m. The stronger full-year NPI and distributable income was due to lower property tax expenses post valuation and recovery of receivables that were previously impaired, partly neutralised by the divestment of Sydney Sofitel Wentworth, which was completed in Apr 22.
• DPU for 2H22 at 0.9316 cents rose 32% h-o-h while full-year DPU at 1.6355 cents was behind our estimates on a 90% payout ratio (vs. 100% in our estimates) and higher-than-expected operating expenses. See Frasers Hospitality Trust's Dividend History,

Singapore and UK led recovery in 2H22

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• Australia saw lower gross operating profit this half due to the divestment of Sydney Sofitel Wentworth, which was completed in Apr 22, with GOP declining 5.6% h-o-h.
• Japan’s GOR rose by 14% h-o-h on international border relaxation, but GOP reduced h-o-h due to higher operating expenses with the roll-off in government wage subsidies going into 2H22.
• Germany and UK recovered from a low base, seeing more than double GOR h-o-h.
• RevPAR continues to be below pre-pandemic levels across all markets, with Japan a low-hanging market.

Capital management stable post SSW divestment and debt repayment.

• Read more at SGinvestors.io.

Geraldine WONG DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-11-04 SGinvestors.io

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