OUE Hospitality Trust NPI down 2.2% to $27.66m in Q1

Lower revenue from Mandarin Orchard Singapore dragged on earnings.

OUE Hospitality Trust’s (OUE H-Trust) net property income slipped 2.2% to $27.66m in Q1 2019 from $28.29m in the same period in 2018, its financial statement revealed. Its revenue also dipped 3.0% to $31.70m from $32.68m.

The revenue from its hospitality segment fell 4.4% to $23.19m in Q1 2019 from $24.26m in Q1 2018, amidst weak or flat contributions from Mandarin Orchard Singapore hotel (MOS) and Crowne Plaza Changi Airport hotel (CPCA).

MOS’ master lease income fell whilst its RevPAR dipped 9.05% to $211 due to lower average room rates and lower demand from the corporate and wholesale segments. MOS also recorded lower food and beverage sales due to lower banquet sales following the suspension of services of the Grand Mandarin Ballroom and its attached kitchen, which was partially mitigated by compensation received, as well as lower sales from some of the food and beverage outlets.

Meanwhile, the master lease income from CPCA had remained the same as 2018 at minimum rent. CPCA’s RevPAR increased marginally to $185 from $184 in Q1 2018. “As the master lease income was below the minimum rent, minimum rent was received for the period. Retail revenue was marginally higher than 1Q2018 mainly due to higher average occupancy recorded in the current period,” OUE H-Trust added.

Also read: Is bigger always better? OUE's mega-merger fails to soothe investor jitters

Consequently, distributable income fell 5.5% to $21.66m. The board has declared a distribution of 1.18 cents payable on 6 June 2019.

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