Wednesday, April 22, 2009

Ascott Residence Trust DPU drops by 24%

Expecting Ascott Residence Trust (ART) prices to drop further. Current share price is at $0.47

They just announced their Q1 2009 results today and apparently, DPU is down 24% to 1.77 cents from previous quater's 2.33 cents. Revenue and Gross Profit are also down 8% and 16% respectively.

Singapore, 22 April 2009 – Ascott Residence Trust (Ascott Reit) achieved a unitholders’ distribution1 of S$10.8 million and DPU of 1.77 cents for the period ended 31 March 2009. Gross profit was lower by 16% at S$19.9m against the corresponding quarter last year. Ascott Reit’s annualised distribution yield is 15%2 based on the closing price of S$0.47 per unit on 21 April 2009.

Ascott Reit’s net asset value (NAV) per unit as at 31 March 2009 is S$1.51. The current trading price is at a 69 percent discount to NAV. Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “2009 is expected to be a challenging year in view of the
current global economic slowdown that has impacted the Asian hospitality industry. This has resulted in lower demand for accommodation and we expect this slowdown to persist for the rest of the year.”

Mr Chong Kee Hiong, ARTML’s Chief Executive Officer, said, “Ascott Reit’s extended stay business model, geographical diversification and strong brand recognition have helped to mitigate the impact of the global economic slowdown. Demand for serviced residences in China and Singapore is significantly weaker in the first quarter of 2009. However, the performance of Indonesia, Vietnam and the rental housing business in Japan continues to be relatively stable.” Mr Chong added: “We take a proactive approach in our debt management. For 2009, a maximum amount of S$96 million is due for refinancing in December. We have already initiated discussions with banks to secure refinancing ahead of maturity.”

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