CDL Hospitality Trusts - CGS-CIMB Research 2023-07-31: On Track For A Stellar 2H23

• CDL Hospitality Trusts (SGX:J85)'s 1H23 revenue rose 20.9% y-o-y to S$119.2m while NPI climbed 23.3% y-o-y to S$62.9m on better Singapore, Japan, Australia, and Italy markets and contribution from Hotel Brooklyn, offset by lower New Zealand and Maldives performance.
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• Japan (+143%) showed the strongest y-o-y recovery in 1H23 RevPAR, followed by Australia (+76%), Italy (+67%), Germany (+65%) and Singapore (+46%). 1H23 RevPAR in Maldives fell 5.8% y-o-y due to increased competition from alternative destinations while NZ fell 12% y-o-y on cancellations due to weather events.

Strong MICE & event line-up in 2H23F bodes well for occupancy

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• 1H23 Singapore occupancy was 69.2%/74.6% including/excluding the rooms undergoing AEI. Management of CDL Hospitality Trusts is positive on room demand given the strong MICE and event line-up in 2H23F. Management said it has received a good amount of bookings for the conference facilities and successfully increased rates by 22% post refurbishment.
• While CDL Hospitality Trusts has fixed rate electricity contracts in place for the Singapore hotels, quotes on electricity contracts are currently ~33% lower than locked-in rates, which could lead to cost savings when CDL Hospitality Trusts renews its contracts in FY24F.

Balance sheet metrics to deteriorate slightly in 2H23

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Natalie ONG CGS-CIMB Research | LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2023-07-31 SGinvestors.io

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