- While CDL Hospitality Trusts reported strong performance in 1Q24, we saw a softening in travel demand in 2Q24, especially for its main markets Singapore and New Zealand where the former enjoyed a vibrant start to 2024 on the back of a stellar line-up of concert and events calendar.
1H24 results slightly below our estimates.
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- In 1H24, CDL Hospitality Trusts reported revenues and net property income growth of 7.0% y-o-y and 5.9% y-o-y. RevPAR growth across its markets were generally higher y-o-y in 1H24, ranging from 7.7% (Singapore) to as high as 25% (Japan) and 14% (Australia), offsetting a slight 1.2% dip in New Zealand.
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Gearing remains stable at ~38%, with interest coverage ratio at 2.66x, comfortably above covenant levels.
- CDL Hospitality Trusts will have 30% of debt due for expiry during the rest of the year in mixed currencies with some hedges potentially coming off. Management expects interest rate for full year 2024 to hover around existing levels of ~4.2% and has consciously kept low with ~52% of the loan book hedged on fixed interest rates.
- The manager expects CDL Hospitality Trusts to benefit from the upcoming rate cuts. Distributable income rose by a slight 0.7% y-o-y to S$31.4m due to higher expenses and interest costs.
Our views
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