DISCLAIMER Certain statements in this document may constitute forward looking statements. Such forward looking statements reflect the company s beliefs and expectations and involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Hospitality Property Fund Limited and its subsidiaries to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. The company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document, or to reflect the occurrence of anticipated events. Past performance of the company cannot be relied on as a guide to future performance. Forwardlooking statements speak only as at the date of this document. You are cautioned not to place any undue reliance on such forward looking statements. No statement in this document is intended to be a profit forecast. This document is being supplied to you for informational purposes only. This document is not a prospectus or an offer or invitation or inducement to subscribe for or purchase any securities, and nothing contained herein shall form the basis of any contract or commitment whatsoever. This document does not constitute a recommendation regarding the securities of the company. No representation or warranty, express or implied, is given by the company, its subsidiaries or any of their respective directors, officers, employees and affiliates or any other person as to the fairness, accuracy or completeness of the information (including data obtained from external sources) or opinions contained in this document, nor have they independently verified such information, and any reliance you place thereon will be at your sole risk. Without prejudice to the foregoing, no liability whatsoever for any loss howsoever arising, directly or indirectly, from any use of information contained in this document, or otherwise arising in connection therewith is accepted by any such person in relation to such information. None of the data in this document has been reviewed or reported on by the group s auditors and no guarantee or warranty as to the data s accuracy, expressed or implied, is given. 2
SHAREHOLDING STRUCTURE 59.2% 40.8% Public 3
MANAGEMENT AND BOARD Board of Directors Executive Directors Rob Nicolella CEO Mara de Lima FD Non-Executive Directors John Copelyn Chairman Gerald Nelson Lead Independent Mac Gani Audit and Risk Chairman Don Bowden RemCo Chairman Zuko Kubukeli Social and Ethics Chairman Syd Halliday Jacques Booysen Laurelle McDonald Zibusiso Kganyago Mohamed Ahmed 4
MANAGEMENT AND BOARD Executive Committee Rob Nicolella - CEO Keith Randall COO Mara de Lima FD Rosa van Onselen Company Secretary Natalie Moodley Financial Manager Mario Monica Group Development & Facilities Manager Charlene Haripersad HR & Training Manager James Nathan Investment & Asset Manager 5
HOTEL BRAND PORTFOLIO Luxury Upscale Midscale Economy 6
HOTEL PORTFOLIO Geographic locations 9 13 12 19 Western Cape Gauteng Rest of South Africa Sun1 Hotels Northern Cape 1 1 Kimberley Rustenberg 10 Gauteng 13 North West Bloemfontein 1 1 Limpopo Polokwane Tshwane Johannesburg Hazyview Mpumalanga Nelspruit 1 Free State KwaZulu-Natal 1 1 Drakensburg 2 6 1 Durban Richards Bay Eastern Cape 9 3 Western Cape Cape Town 1 1 Port Elizabeth 7
HOTEL PORTFOLIO OPERATING SEGMENTS BY ROOMS HOTEL GRADE BY ROOMS 23% 17% Western Cape 34% 26% Gauteng Rest of SA Sun1 17% 8% Luxury 31% 44% Upscale Midscale Economy 8
INCOME STATEMENT Rm 6 Months to Sept 2018 6 Months to Sept 2017 Change on Prior year % Rental Income 345 314 10% Net operating costs (28) (27) (4%) EBITDAR 317 287 10% Net finance costs (80) (83) 4% Profit before tax & adjustments 237 204 16% Fair value on interest rate swops 23 (3) - Fair value (decrease) / increase on investment property (431) 0 (100%) Adjusted Earnings (171) 201 (185%) Less adjustments noted above (408) (3) - Distributable Earnings 237 204 16% No. of shares (excluding appraisal right shares) 576 576 0% Dividend per share (cents) 41.2 41.8 (1%) 9
CASH FLOW STATEMENT Rm 6 Months to Sept 2018 6 Months to Sept 2017 EBITDAR per income statement 317 287 Working capital adjusted for non-cash and exceptional items 38 (103) Cash generated from operations 355 184 Net finance costs (80) (83) Maintenance capex (100) (33) Free cash flow 175 68 Distributions to shareholders (451) (196) Investment activities (net of transaction costs) 0 (1 301) Rights issue 0 994 Move in net IBD (276) (435) Opening net IBD (1 545) (1 508) Acquired with acquisitions 0 203 Closing net IBD (1 821) (1 740) 10
INTEREST BEARING DEBT Rm as at Sept 2018 as at Sept 2017 Bank Facilities 1 047 1 238 Corporate Bonds (notes) 890 890 Gross Interest bearing debt 1 937 2 128 Cash on hand (116) (388) Net Interest bearing debt 1 821 1 740 Loan to Value 15.8% 16.3% Weighted average cost of debt 9.5% 10.8% 11
HOTELS PORTFOLIO AND STATISTICS 30 September 2018 Hotels Keys Luxury 3 749 Upscale 12 3 227 Midscale 19 3 517 Economy 19 1 508 Total 53 9 001 12
HOTELS PORTFOLIO AND STATISTICS Including Sun 1 : Excluding Sun 1 : Statistics 6 Months Sept 2018 6 Months Sept 2017 Change % Statistics 6 Months Sept 2018 6 Months Sept 2017 Change % Occupancy (%) 59.7% 61.4% (2.8%) Average room rate (R) 988 990 (0.1%) RevPar (R) 590 608 (3.0%) Occupancy (%) 60.6% 62.3% (2.6%) Average room rate (R) 1 078 1 088 (0.9%) RevPar (R) 654 677 (3.5%) All trading is shown for the full portfolio on a like-for-like 6 month basis 13
HOTELS PORTFOLIO AND STATISTICS HPF: Trading Information April to September (6 Months) F2019 Actual Occupancy Average Room Rate RevPAR F2018 Actual % on PY Relative GI F2019 Actual F2018 Actual % on PY Relative GI F2019 Actual F2018 Actual % on PY Relative GI Western Cape 51.8% 60.4% (14.3%) 93.4 1 333 1 376 (3.1%) 101.6 690 831 (16.9%) 94.9 Gauteng 62.4% 59.7% 4.6% 103.4 1 004 1 005 (0.1%) 96.8 627 600 4.6% 100.1 Rest of South Africa 68.1% 68.6% (0.7%) 100.1 956 890 7.4% 103.4 651 610 6.7% 103.5 Total 60.6% 62.3% (2.6%) 99.4 1 078 1 088 (0.9%) 98.2 654 677 (3.5%) 97.6 Sun 1 55.1% 57.5% (4.2%) 496 471 5.3% 273 271 0.8% Total 59.7% 61.4% (2.8%) 99.2 988 990 (0.1%) 99.0 590 608 (3.0%) 98.1 STR: Trading Information April to September (6 Months) F2019 Actual Occupancy Average Room Rate RevPAR F2018 Actual % on PY F2019 Actual Western Cape 54.2% 59.1% (8.2%) 1 281 1 343 (4.6%) 695 794 (12.4%) Gauteng 62.1% 61.4% 1.2% 1 121 1 086 3.2% 696 667 4.4% Rest of South Africa 62.2% 62.7% (0.8%) 1 039 1 000 3.9% 646 627 3.1% South Africa 60.0% 61.2% (2.0%) 1 134 1 124 0.9% 680 688 (1.2%) F2018 Actual % on PY F2019 Actual F2018 Actual % on PY 14
PORTFOLIO AND COMPARATIVE TRADING Rooms Occ % ARR RevPAR F2019 H1 Rent (Rm) F2018 H1 Rent (Rm) Western Cape Region 2 381 51.8% 1 333 690 84 92 Gauteng Region 3 016 62.4% 1 004 627 138 120 Rest of South Africa 2 096 68.1% 956 651 91 83 Subtotal 7 493 60.6% 1 078 654 313 295 Sun 1 1 508 55.1% 496 273 32 19 Total 9 001 59.7% 988 590 345 314 Note: Cullinan & Merway rental only included from 1 July 2017 15
WESTERN CAPE REGION : TRADING AND RENT Rooms Occ % ARR RevPAR Rent (R 000) Western Cape Region 2 381 51.8% 1 333 690 84 189 Westin Cape Town 483 23 522 Southern Sun - Waterfront 537 22 396 Southern Sun- The Cullinan 394 20 874 StayEasy Century City 175 5 915 Radisson Blu Waterfront 177 4 481 Protea Hotel Victoria Junction 172 3 628 Southern Sun Newlands 162 2 985 Sunsquare Cape Town Gardens 136 2 493 Arabella Hotel & Spa 145 * * Arabella Hotel & Spa : The rental is not aligned to HPF s financial year end resulting in a timing difference in the variable rent. 16
GAUTENG REGION : TRADING AND RENT Rooms Occ % ARR RevPAR Rent (R 000) Gauteng Region 3 016 62.4% 1 004 627 137 874 Birchwood Hotel & Conference Centre 665 38 222 Radisson Blue Gautrain 220 15 430 Crowne Plaza Rosebank 318 12 164 Garden Court OR Tambo 253 11 764 Garden Court Milpark 251 11 659 Sandton Eye BC Retail - 8 555 Holiday Inn Sandton 301 8 342 Garden Court Hatfield 157 6 499 Kopanong Hotel & Conference Centre 166 5 518 Garden Court Morningside 150 5 482 Southern Sun Katherine Street 122 5 153 Mount Grace Hotel & Spa 121 3 973 Garden Court Eastgate 157 3 313 StayEasy - Eastgate 135 1 800 17
REST OF SA : TRADING AND RENT Rooms Occ % ARR RevPAR Rent (R 000) Rest of South Africa 2 096 68.1% 956 651 90 688 Garden Court South Beach 414 16 190 Champagne Sports 152 12 310 Garden Court - PE King s Beach 280 10 013 Garden Court - Polokwane 180 9 479 Garden Court - Umhlanga 204 8 396 Protea Hotel Edward 131 8 281 StayEasy - Pietemaritzburg 127 6 437 StayEasy - Rustenburg 125 4 228 Garden Court Kimberley 135 4 226 Protea Hotel Marine 114 4 085 Southern Sun - Bloemfontein 147 4 038 Protea Hazyview 87 3 005 18
F2019 CAPEX : KEY PROJECTS Westin Bedroom FF&E refurbishment R148 million over 2 years 7/16 floors completed in F2019 Arabella Hotel & Spa Bedroom Soft Refurbishment R14.5 million over 2 years 2/5 floors completed in F2019 Birchwood Hotel & Conferencing Conference Rooms Refurbishment completed F2020 F2020 F2019 19
CAPEX PROJECTS : THE WESTIN 20
CAPEX PROJECTS : THE WESTIN 21
CAPEX PROJECTS : ARABELLA HOTEL & SPA 22
WATER RESILIENCE Water Resilience Projects Capex committed on water resilience projects have been spent, barring some administrative procedures, these Western Cape hotels will be off the grid by the first quarter 2019 Desalination Plants installed and commissioned Westin, Radisson Blu Waterfront and Stay Easy Century City Westin Plant will feed Southern Sun Cullinan & Southern Sun Waterfront Boreholes and filtration plants installed Southern Sun Newlands, Sun Square Gardens, Garden Court Kings Beach and Protea Hotel Marine Additional water storage Protea Hotel Victoria Junction and Sun 1 Milnerton, Foreshore and Parow Water Services Intermediary contracts signed with the relevant local authorities where required 23
DISTRIBUTIONS Distribution of 100% of earnings not sustainable in the long term Gearing low and can borrow for maintenance capital expenditure in the short term Maintenance capital expenditure averages approximately 20% of hotel rental income per annum over a 7 to 8 year cycle 24
Thank you 25