CDL Hospitality Trust’s profits slide amid lacklustre Chinese tourist arrivals in Q2

Profits slip by 4%.

CDL Hospitality Trust missed expectations as it posted disappointing results in Q2, with its Net Profit Income (NPI) down 4% y-o-y to S$31.3m.

According to DBS, group occupancy and rates will continue to remain under pressure on the back of weaker China demand, the country’s 2nd-largest tourist market, which slipped 27% y-o-y in May.

CDL also registered an 8% y-o-y drop in NPI from Singapore operations due to slower tourist arrivals and weaker corporate demand, while revenue for Singapore hotels fell 6% to S$181 mainly on weaker average daily rates, which fell 4% to S$211.

“Singapore operations were also impacted by the Claymore Link property being substantially closed for asset enhancement works. The softer Singapore operations were partly offset by the group’s Maldives resorts (NPI +44% y-o-y), which were boosted by maiden contribution from Jumeirah Dhevanafushi resort acquired late last year. Given the weaker results, DPU fell 8% y-o-y to 2.50 Scts. Rather than lift payout to 100% to compensate for the dip, CDL HT will keep payout at 90% to cover its capex programme which includes the
refurbishment of Claymore Link for c.S$25m (8% ROI),” noted DBS.