<Results Analysis> Frasers hospitality Trust 1Q22: Q-o-q RevPAR recovery across all markets
- Singapore RevPAR rose 12.9% y-o-y and 5.9% q-o-q in 1Q22, InterContinental SG returns back to government business
- All geographical markets saw higher q-o-q RevPAR in line with domestic travel relaxation trends
- We await further guidance on strategy going forward post divestment of Sofitel Sydney Wentworth last quarter
- Maintain BUY with unchanged TP of S$0.65
Operational Update
Well-paced recovery across FHT’s key markets – Australia and Singapore
- FHT saw higher q-o-q performance in RevPAR this quarter across all geographical markets
- Singapore RevPAR rose 12.9% y-o-y and 5.9% q-o-q in 1Q22
- InterContinental resecured government quarantine business in the quarter, which helped to boost SG occupancy
- Australia was one of the best performing markets this quarter, as both Sydney and Melbourne exits lock down in Nov’21 and reopened international borders to corporate travel without quarantine
- Aus RevPAR rose 43.1% y-o-y and 32.1% q-o-q this quarter
All other markets saw stronger q-o-q performance alongside relaxation
- Other markets also saw recovery timed with key relaxation periods, mostly in 2H21. Domestic travel continue to take precedence with certain markets still shutting international borders such as Japan or seeing lacklustre international arrivals due to Omicron setback
- Japan: RevPAR rose 2.5% y-o-y and 42.5% q-o-q
- Japan’s government is planning resume Go-to-Travel campaigns to boost domestic tourism, borders currently still remained closed to international visitors
- Malaysia: RevPar more than doubled y-o-y, interstate travel was eased since Oct’21 alongside international travel upon fulfilment of vaccination status
- Germany: Maritim Dresden continue to see slow recovery due to the lack of MICE events
FHT hotel performance (key markets) : Singapore and Australia
Financial metrices may see improvement post divestment of Sofitel Sydney Wentworth
- Gearing stands at 42.5% as at 31 Dec’21
- Average debt of maturity is at 2.3 years, with c.S$150m of debt maturing this financial year
- Cost of borrowing remains low at 2.1% with an interest coverage ratio of 2.4x
- We continue to await further guidance on FHT’s strategy going forward post the divestment of Sofitel Sydney Wentworth last quarter.
- Divestment proceeds at 12% premium to asset valuation will potentially go into partial debt repayment (from 42% to 34% gearing) and potentially capital top-ups to partially offset the loss of income from the asset.
Further details will be added post FHT’s briefing tomorrow morning.