Quarterly income was hit by a weaker hospitality business and high vacancies in prime retail malls.
OUE H-Trust continued on a downward trend throughout the first half of the year after NPI fell 4.5% YoY to $25.3m in Q2 from $26.5m in the previous year, an announcement revealed. Revenue also slipped by 4.4% YoY to $29.4m in Q2 from $30.7m in Q2 2018.
For the first half of the year, NPI fell by 3.3% YoY to $53m from $54.8m last year, whilst revenue decreased by 3.7% YoY to $61.1 from $63.4m.
The declines were attributed to the slower hospitality business during the quarter, uncertainty in the global economy, and the absence of large-scale biennial events in certain periods of 2019. OUE H-Trust also noted the slower growth of international tourist arrivals and high vacancies in the upper floors of prime retail malls which may be a result of muted retail sales recorded in April and May.
“During the quarter, the hospitality sector continued to experience do wnward pressure and increased competition. The lower DPS in Q2 2019 was mainly due to lower income from the hospitality segment resulting from lower average room rates and weaker demand as well as lower food and beverage sales at Mandarin Orchard Singapore, lower revenue from the retail segment as a result of negative rental reversions recorded in the previous quarters, and higher interest expense,” said Chen Yi-Chung Isaac, acting CEO of OUE H-Trust. (enge link on weak revpar)
Consequently, distributable income tumbled down by 8.6% YoY to $19.4m in Q2 from $21.3m last year; whilst it fell by 7% YoY to $41.1m in H1 from $44.2m in the previous year. The board has declared a distribution of $0.0106 cents payable on 12 September.
Do you know more about this story? Contact us anonymously through this link.