CDL Hospitality Trusts (CDLHT) reported its 4Q15 results this morning which came in within our expectations. Although gross revenue rose 11.1% YoY to S$50.1m, NPI and DPU fell 2.2% and 3.8% to S$37.8m and 3.01 S cents, respectively. CDLHT’s performance was impacted by continued softness in the tourism industry, as its Singapore hotels’ RevPAR dipped 7.0% YoY to S$172.

This was in turn driven by a YoY fall in both occupancy (-3.5 ppt to 86.5%) and average daily rate (-2.9% to S$199). For FY15, CDLHT’s gross revenue increased 3.4% to S$172.4m, and was 0.7% higher than our full-year forecast. DPU of 10.06 S cents represented a decline of 8.4%, but was ahead of our projection by 2.2%.

Looking ahead, CDLHT remains cautious on the outlook of its portfolio hotels given the uncertain macroeconomic landscape. We will provide more details after the analyst briefing. Maintain BUY on CDLHT but will our S$1.41 fair value estimate is under review.

Source: OCBC Research - 28 Jan 2016