Hotel Properties Limited - DBS Research 2023-03-02: Hotel Recovery On Track!

Hotel Properties Limited - Hotel Recovery On Track!


FY22 revenue came in line with expectations, backed by robust recovery in hotel operations.

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  • Based on our estimates, we estimate FY22 group RevPAR at ~S$397, which is at 92% of 2019’s levels and 92% of pre-pandemic average levels (average between 2007 to 2019).

However, net profit came in below our estimates, as the group saw cost pressures and higher interest rates.

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  • FY22 saw an exceptional gain of S$78m (versus FY21 of S$3.6m) because of fair value gain from investment properties; After excluding exceptional gains, FY22 net profit (pre-extraordinaries) narrowed its losses with a net loss of S$11.9m, a recovery from previous year’s loss of S$25.3m (versus our profit estimate of S$20.3m).
  • Net profit were below our estimates as Hotel Properties saw lower-than-expected gross margins of 20% (versus our estimate of 23%, versus 2019 gross margins of 25%) and higher-than-expected SG&A expenses at 17% of revenue (versus our estimates of 15%, versus 2019 SG&A expenses of 15.5%).
  • Moreover, interest expenses increased to S$59.4m (up from $34.7m in FY21), due to higher interest rates and additional borrowings to fund investments during the year. Estimated effective interest cost grew to 4.2% in FY22 (up from 3.1% in FY21).

Positive operational updates from mixed-use property development projects in London.

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Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Elizabelle PANG DBS Group Research | Derek TAN DBS Research | 2023-03-02

Previous report by DBS:
2023-02-20 Hotel Properties - Unlock The Treasure Chest! Initiate Coverage With BUY.

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