Ascott Residence Trust's net property income dropped 9% to S$33.8m

No thanks to subdued operating environment.

According to DBS, revenue and NPI declined by 3% and 9% respectively to S$69.2m and S$33.8m, forming c20% of our full year forecasts.

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This is expected as Q1 is a seasonally weak quarter for ART. The trust’s existing properties generally saw weaker RevPAUs due to a subdued operating environment.

This was offset by increased contributions from acquisitions of Citadines Shinjuku and Citadines Kyoto (Japan), Ascott Guangzhou (China) and Madison Hamburg (Germany).

Gross profit margins dipped slightly to 48.8% due to increased operating costs but are expected to remain stable. Distributable income, however increased by 14.2% y-o-y to S$27.6m (DPU of 2.24 Scts) due to exchange gains of S$8.1m (due to part repayment of loans from its recent placement exercise) recorded in the quarter.