AHT

FYMar15 results missed estimates. 4QFY15 DPU came in at 1.25¢ (+3.3%), taking FY15 DPU to 5.06¢ (-8.3%).

Gross revenue for the quarter inched up 1.6% to $54.5m while NPI rose 2.2% to $22.6m, mainly due to the contribution from Osaka Namba Washington Hotel Plaza, partially offset by continued weakening of the AUD and JPY against the SGD.

Operationally, the Australian portfolio capped an effective year with a RevPAR growth of 5.5% in 4Q15, led by the hotels in Sydney, which saw better performance due to stronger demand and conferencing events. Occupancy rate was at 86.1% (4Q14: 83.8%), as Courtyard by Marriott North Ryde (Sydney) also benefitted from the closure of a competing hotel.

The China portfolio recorded a decline in RevPAR of 0.7%, mainly attributed to more intense competition, although occupancy rate inched up to 74.7% (4Q14: 72.5%). Meanwhile, Oakwood Apartments Ariake Tokyo continued its strong performance as RevPAR more than doubled versus the previous year, which saw a transition period as the new operator took over operations in Jan ’14.

Meanwhile, AHT’s portfolio of hotels under management contract arrangements in Singapore continued to provide a steady stream of rental income.

Going forward, AHT guides that the Australian hotel market is expected to maintain its positive performance in the near-term, although the weakening of AUD versus the SGD will impact on its earnings. In China, the hospitality sector is expected to remain competitive, while the Japanese tourism sector is expected to remain buoyant.

Leverage ratio stood at 37.2%, with average debt cost of 3.2% and WALE of 2.5 years.

At the current price, AHT trades at 0.96x P/B and 6.8% FY15 yield, which is in line with its peer average.