CapitaLand Ascott Trust profits up 12%; DPU is 2.55 cents

Higher room rates in key markets like Japan and US drove up RevPAU.

CapitaLand Ascott Trust (CLAS) saw its gross profit rise by 12% year-on-year (YoY) to $172.9m in the first six months of 2024, according to its bourse filing.

CLAS attributed the growth of international travel, and higher room rates in key markets such as Japan and the United States. This raised its revenue per available unit (RevPAU) to $145 in H1– a 5% growth compared to H1 2023. 

Total revenue for the period is $386.4m, 11% higher than the $346.9m in H1 2023. 

Distribution per stapled security is 2.55 cents, 8% lower than the 2.78 cents distributed in H1 2023. Total distribution is $96.5m.

CLAS said that the decline was due to the depreciation of most foreign currencies against the Singapore dollar. It also noted the impact of divestments and ongoing asset enhancement initiatives (AEI), offset by acquisitions, completed AEIs, and interest savings from the repayment of higher interest debt.

Earlier this year, CLAS announced divestments of $408.1m across 10 mature assets. CapitaLand Ascott Trust Management chairman Lui Chong Chee expects the divestment to unlock about $44.6m in gains for CLAS.

Part of the divestment proceeds have also been used to pare down higher-interest debt, keeping CLAS’ gearing healthy at 37.2%, said Serena Teo, chief executive officer, CapitaLand Ascott Trust Management Limited, the manager of CLAS.

“In H1 2024, we have also completed AEI for four of our properties.  Located in key gateway cities, they are well-positioned to capture demand from tourism, business activities and events.” said Teo.

Looking ahead, Teo said that CLAS will maintain a “cautiously positive” view on the demand for lodging on the back of pent-up demand for travel, regular travel patterns, and seasonal factors.

“In H1 2024, stable income sources contributed about 65% of CLAS’ gross profit, whilst the remaining 35% was from growth income sources.  CLAS’ operational performance is expected to remain resilient,” Teo said, adding that CLAS’ geographic diversification, range of lodging asset classes and different contract types provides a strong foundation against global uncertainties.

In recent news, CLAS acquired a 10% stake in Columbia Student Venture.