Far East Hospitality Trust's gains beat forecast by 0.2%

The $38.8m income was due to to lower operating expenses.

According to a release, Far East Hospitality Trust announced that the Income Available for Distribution of S$33.6 million exceeded forecast by 4.5% for its first reporting period from its date of listing on 27 August 2012 to 31 December 2012.

Its Distribution per Stapled Security of 2.09 cents was 4.5% higher than forecast. This translates into an annualised distribution yield of 5.7% based on 5 February 2013 closing share price of S$1.05 or 6.5% based on initial public offering price of S$0.93.

Far East H-Trust recorded Gross Revenue of S$42.2 million during the Forecast Period, which was 0.7% lower than the projected S$42.5 million.

This was mainly due to the softer performance of its Serviced Residences, which were affected by macro uncertainties in 2H2012 when major companies held back in the face of the European debt crisis and the US “Fiscal Cliff”. Revenue per available serviced residence unit (“RevPAU”) was S$204 for FY2012 compared to  S$216 that was forecast in the Prospectus.

Overall, the Hotels performed better than forecast. While there was some pressure on average room rates, resulting in the average revenue per available room (“RevPAR”) of $171 versus the forecast of $174, higher revenue from the commercial spaces, and the meetings and banquet business helped to offset the lower room revenue.

Net Property Income was 0.2% higher than forecast at S$38.8 million as a result of lower operating expenses.

Active management of finance costs and other Trust expenses further enabled Far East H-Trust to deliver Income Available for Distribution of S$33.6 million, which was 4.5% above forecast.

On the results, Gerald Lee, Chief Executive Officer of the REIT Manager said “Far East H-Trust has started on a solid footing with this set of results that reflects our Trust’s resilience despite the tentative economic climate over the last two quarters in 2012. The higher distributable income generated has enabled us to deliver a distribution better than forecast to our Stapled Securityholders.”