Global Premium Hotels' (GPH) FY16 results were broadly within expectations. Revenue dropped 4.6% to S$58.3m, or 100.4% of our FY forecast, mainly due to lower hotel room revenue recognised from most of the hotels, including certain hotels which had to close for asset enhancement initiatives (AEI). The decrease was partially offset by additional contribution from certain hotels which were completed with AEI in 2015.

Similar to what was observed for other hotel assets, FY16 AOR decreased 4.0 ppt to 77.6%, contributing to a RevPAR drop of 4.5% to S$81.5. Rental income was relatively stable at $1.1m.

As a result of the above changes, PATMI dropped 19.3% to S$11.9m or 89.4% of our full year forecast due to a higher than expected administrative expenses. NAV remained flat at around S$729.1m.

We are likely to keep our HOLD rating but place our fair value of S$0.31 under review pending further details.

Source: OCBC Research - 13 Feb 2017