• In-line set of results
• Distribution of SGD15.4m capital gains
• Maldives, UK and Italy led the recovery in RevPAR
2H21/FY21 DPU fell 11.0%/13.7% YoY – CDL Hospitality Trusts’ (CDLHT) 2H21 revenue and net property income grew 39.7% and 24.1% YoY to SGD91.5m and SGD49.1m respectively, helped by stronger demand on the back of easing travel restrictions and broader distribution of vaccines. CDLHT distributed partial divestment gains of SGD15.4m to smoothen out the impact of Covid-19 and divestments. 2H21 DPU fell 11.0% YoY to 3.06 S cents. On a full-year basis, FY21 DPU decreased by 13.7% YoY to 4.27 S cents or 99% of our estimates, in-line with our expectations.
Overall improvement in full-year RevPAR, with the exception Japan – RevPAR improved QoQ in most markets in 4Q21, with the exception of the UK (-6.8% QoQ) and Germany (-9.1% QoQ). On a full year basis, Japan was the only market which saw a decline in RevPAR (-6.1% YoY) due to strict border restrictions. On the other hand, Maldives, UK and Italy led the recovery in RevPAR. Meanwhile, performances of CDLHT’s Singapore and New Zealand hotels continued to be supported by isolation business for most of the period in 2H21. The contract as a managed isolation facility is expected to continue into 2Q22 for New Zealand. Only 2 hotels in Singapore are still on government business contract which is expected to continue into 1Q22.
Singapore RevPAR grew 11.0%/1.0% YoY in 2H21/FY21 – For Singapore (excluding W Hotel), RevPAR improved 9.3% YoY in 2H21 but was down 6% YoY for FY21. Including W Hotel, RevPAR grew 11.0%/1.0% YoY in 2H21/FY21. Performance continued to be impacted by the absence of major MICE (Meetings, Incentives, Conferences & Exhibitions) events, large wedding banquets and social functions in FY21. As demand from the government isolation business tapers and expansion of Vaccinated Travel Lanes (VTL) slows down due to the emergence of Omicron, management will focus on driving growth from staycations and corporate long-stay demand before. CDLHT has ~SGD30m of undistributed divestment gains which could be used to mitigate the impact of Covid-19 and smoothen out DPU. We revise our estimates and subsequently decrease our fair value estimate from SGD1.34 to SGD1.30.
ESG Updates
CDL Hospitality Trusts (CDLHT) ranks below industry average in terms of governance and social issues. However, CDLHT performs better than its peers in terms of environmental score. CDLHT demonstrates robust efforts to further increase proportion of its green-certified buildings relative to peers. BUY. (Chu Peng)