2Q FY2017/18 Financial Results Presentation 6 November 2017
Disclaimer This presentation shall be read in conjunction with A-HTRUST s Unaudited Financial Results for the Second Quarter ended 30 September 2017 ( 2Q FY2017/18 ) a copy of which is available on www.sgx.com or www.a-htrust.com. This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends and foreign exchange rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of average daily room rates and occupancy, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these forward looking statements, which are based on the Managers current view of future events. The Australian Dollar, Chinese Renminbi, Japanese Yen and Singapore Dollar are defined herein as AUD, RMB, JPY and SGD or S$, respectively. Any discrepancies in the figures included herein between the individual amounts and total thereof are due to rounding. 2
Contents 3 1 Key Highlights 2 Financial Review 3 Portfolio Performance 4 Capital Management 5 Looking Ahead
1 Key Highlights
2Q FY2017/18 Financial Highlights 2Q FY2017/18 1 1H FY2017/18 1 Gross Revenue S$58.4m 5.2% y-o-y S$111.9m 3.7% y-o-y Net Property Income ( NPI ) S$24.5m 0.8% y-o-y S$46.8m 0.3% y-o-y Income available for distribution S$17.2m 5.3% y-o-y S$33.0m 4.8% y-o-y Adjusted Income available for S$16.1m 3.7% y-o-y S$30.8m 2.8% y-o-y distribution 2 Distribution per Stapled Security ( DPS ) 2 1.42 cents 2.9% y-o-y 2.73 cents 2.2% y-o-y Notes: 1. Save for DPS, percentage changes are based on figures rounded to nearest thousands 2. After retaining distributable income for working capital purposes 5
2Q FY2017/18 Portfolio Highlights AOR 1 ADR 1 RevPAR 1 Australia 87.6% 3.4pp y-o-y AUD 169 Stable AUD 148 4.2% y-o-y China 91.1% 0.4pp y-o-y RMB 427 4.9% y-o-y RMB 389 4.6% y-o-y Japan Applies to Oakwood Apartments only Mainly driven by higher room rates JPY 9,974 1.6% y-o-y Singapore Marginal improvement in rental income contribution from Park Hotel Clarke Quay Note: 1. AOR: Average Occupancy Rate; ADR: Average Daily Rate; RevPAR: Revenue per Available Room 6
Distribution Details Distribution for the period 1 April 2017 to 30 September 2017: 2.73 Singapore cents per stapled security 6 November 2017 Notice of Books Closure Date November 2017 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 10 November 2017, 9.00 am 14 November 2017, 5.00 pm 12 December 2017 Ex-Distribution Date Books Closure Date Date of Distribution December 2017 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 7
2 Financial Review
Results Summary 2Q FY2017/18 2 nd Quarter S$ million FY2017/18 FY2016/17 Change 2 Gross Revenue Net Property Income 58.4 55.6 5.2% 24.5 24.3 0.8% Overall improvement in underlying performance from the portfolio while appreciation of AUD against SGD lifted revenue in SGD term NPI Margin (%) 42.0 43.8 (1.8)pp Income available for distribution 17.2 16.3 5.3% Adjusted Income available for 16.1 15.5 3.7% distribution 1 DPS (cents) 1 1.42 1.38 2.9% Notes: 1. Net of retention of distributable income for working capital purposes. Retention of income for 2Q FY2017/18 was based on 6.4% of distributable income, while retention of income for 2Q FY2016/17 was based on 5.0% of distributable income. 2. Save for DPS, percentage changes are based on figures rounded to nearest thousands Compared to same quarter last year, net finance cost was lower by S$0.7 million Partially offset by higher amount of retention of income; 6.4% compared to 5.0% same quarter last year Assuming retention of income was 5.0%, DPS for 2Q FY2017/18 would have been 1.44 cents, an increase of 4.9% y-o-y 9
Results Summary 1H FY2017/18 1 st Half S$ million FY2017/18 FY2016/17 Change 2 Gross Revenue Net Property Income 111.9 107.9 3.7% 46.8 46.9 (0.3)% NPI Margin (%) 41.8 43.5 (1.7)pp Income available for distribution 33.0 31.5 4.8% Adjusted Income available for 30.8 30.0 2.8% distribution 1 DPS (cents) 1 2.73 2.67 2.2% Notes: 1. Net of retention of distributable income for working capital purposes. Retention of income for 1H FY2017/18 was based on 6.7% of distributable income, while retention of income for 1H FY2016/17 was based on 4.9% of distributable income. 2. Save for DPS, percentage changes are based on figures rounded to nearest thousands Overall underlying portfolio performance improved by S$1.7 million, augmented by stronger AUD while partially offset by weaker JPY NPI was affected by lower contribution from the Australia portfolio, partially mitigated by stronger performance from China hotels Net finance cost was S$1.5 million lower than corresponding period last year Partially offset by higher amount of retention of income; 6.7% compared to 4.9% same quarter last year 10
Distributable Income (S$ million) DPS (Singapore cents) Distribution History 25.0 1.64 1.80 20.0 1.28 1.38 1.45 1.30 1.29 1.38 1.37 1.31 1.42 1.60 1.40 15.0 14.2 15.5 16.2 14.6 14.5 15.5 18.5 15.4 14.7 16.1 1.20 1.00 0.80 0.60 10.0 0.40 0.20 5.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY15/16 FY16/17 FY17/18 Distributable Income DPS 0.00 11
3 Portfolio Performance
S$ million S$ million Performance by Country Stronger AUD boost NPI contribution from Australia portfolio while weaker JPY resulted in a lower contribution from Japan portfolio Gross Revenue Net Property Income 50.0 40.0 37.9 8.4% 41.0 15.0 12.6 2.2% 12.9 30.0 10.0 20.0 6.3 4.9% 6.0 10.0 5.6 3.7% 5.8 8.9 6.0% 8.4 3.2 1.5% 3.2 5.0 2.3 7.9% 2.4 3.2 1.6% 3.2 0.0 Australia China Japan Singapore 0.0 Australia China Japan Singapore 2Q FY16/17 2Q FY17/18 2Q FY16/17 2Q FY17/18 13
NPI Breakdown by Country and Contract Type Well diversified portfolio with good mix of master lease arrangements and management contracts 2Q FY16/17 Net Property Income 2Q FY17/18 Net Property Income Master Lease: 39% Master Lease: 38% Singapore 13% Singapore 13% Japan 26% 2Q FY16/17 Net Property Income: S$24.3m Australia 52% Japan 24% 2Q FY17/18 Net Property Income: S$24.5m Australia 53% China 9% China 10% Management Contract: 61% Management Contract: 62% 14
AUD million S$ million AUD/SGD Stronger AUD boosted NPI in SGD term 2 nd Quarter AUD FY17/18 FY16/17 Change AOR (%) 87.6 84.2 3.4pp ADR 169 169 RevPAR 148 142 4.2% Novotel Sydney Central leveraged on its aircrew business to drive performance, while CMNR 1 improved as it was undergoing room refurbishment last year NPI lower mainly due to higher land tax related to Melbourne hotel, and higher operating expenses Brisbane hotel 1. Courtyard by Marriott Sydney-North Ryde Net Property Income in AUD Net Property Income in S$ 15.0-2.6% 20.0 AUD/SGD: +2.2% 1.200 12.3 12.0 1.024 2 AUD/SGD: 1.074 2 (+5%) 15.0 0.800 10.0 12.6 12.9 10.0 0.400 5.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 5.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 0.000 FY15/16 FY16/17 FY17/18 FY15/16 FY16/17 FY17/18 2. Based on average rate used for the respective quarter 15
RMB million S$ million RMB/SGD China portfolio continued to improve 2 nd Quarter RMB FY17/18 FY16/17 Change AOR (%) 91.1 91.5 0.4pp ADR 427 407 4.9% RevPAR 389 372 4.6% Benefitted from healthy public demand to maintain high occupancy rate and drive higher room rates Ibis Beijing Sanyuan continued to see strong demand from members of China Lodging Group s loyalty programme Both hotels also benefitted from cost savings Net Property Income in RMB Net Property Income in S$ 15.0 10.0 11.1 +7.1% 11.9 3.5 3.0 2.5 2.0 RMB/SGD: +7.9% 0.25 0.203 1 RMB/SGD: 0.204 1 (+1%) 0.20 2.3 2.4 0.15 5.0 1.5 1.0 0.5 0.10 0.05 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 0.00 FY15/16 FY16/17 FY17/18 FY15/16 FY16/17 FY17/18 1. Based on average rate used for the respective quarter 16
JPY million S$ million JPY/SGD Improvement for Japan portfolio negated by weaker JPY 2 nd Quarter JPY FY17/18 FY16/17 Change RevPAR 1 9,974 9,819 1.6% Posted marginal improvement as the portfolio continued to benefit from strong inbound arrivals. However, the better performance was negated by weaker JPY against SGD. 1. Applies to Oakwood Apartments Ariake Tokyo only Net Property Income in JPY Net Property Income in S$ 700.0 +2.3% 8.0 JPY/SGD: 0.013 2-4.9% 0.015 600.0 500.0 475.4 486.4 6.0 6.3 6.0 JPY/SGD: 0.012 2 (-7%) 0.010 400.0 300.0 4.0 0.005 200.0 100.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 0.000 FY15/16 FY16/17 FY17/18 FY15/16 FY16/17 FY17/18 2. Based on average rate used for the respective quarter 17
y-oy RevPAR Growth (%) How our hotels performed Comparing of A-HTRUST s hotels performance against peers during the quarter Australia China 20.0 12.3 10.0 7.4 10.4 5.2 5.2 4.4 4.1 0.0 1.8 2.0 1.2 0.1 1.7 1.2 2.0-3.1-1.3-1.6-1.5-10.0 Pullman Sydney Hyde Park Novotel Sydney Central Novotel Sydney Parramatta Courtyard by Marriott Sydney- North Ryde Pullman Melbourne Albert Park Mercure Melbourne Albert Park Pullman Brisbane KGS Mercure Brisbane KGS Novotel Beijing Sanyuan STR Comp Set A-HTRUST 's Portfolio Note: 1. Source: STR (Smith Travel Research) Global Report. STR Global Report tracks a hotel s occupancy, ADR and RevPAR performance against its selected comparable competitors. STR Competitive Set ( STR Comp Set ) refers to the average performance of the hotel and its competitors. 18
4 Capital Management
Healthy balance sheet As at 30 September 2017 As at 30 June 2017 Borrowings S$551.6m S$551.3m Total Assets S$1,692.5m S$1,688.1m A-HTRUST Gearing 1 32.6% 32.7% - A-HREIT Gearing 25.6% 25.8% - A-HBT Gearing 36.3% 36.4% Weighted average interest rate 2.9% 2.8% Weighted average debt to maturity 2.3 years 2.5 years Net asset value per stapled security S$0.89 S$0.89 Note: 1. Gearing is computed based on total debt over total assets 20
S$ million Balanced debt profile and prudent capital management Debt Maturity Profile Debt Currency Profile 250 Weighted average debt to maturity as at 30 September 2017: 2.3 years RMB 5.4% 200 209 JPY 37.0% Total Debt as at 30 Sep 2017 AUD 45.1% 150 75 SGD 12.5% 100 70 Interest Rate Profile 50 62 91 49 Floating 22.1% Total Debt as at 30 Sep 2017 0 2017 2018 2019 2020 2021 2022 Fixed 77.9% Bank Loans MTN 21
5 Looking Ahead
Australia In general, performance of Sydney CBD hotels are expected to remain strong on the back of limited supply, while hotels in suburban Sydney may be affected by increased competition. While the Melbourne hotel market is expected to remain positive in the near term, upcoming supply may moderate growth. More intense competition is also expected for meeting and conference facilities in Melbourne following the reopening of the International Convention Centre Sydney. The oversupply situation continues to persist in the Brisbane market, although the upcoming Commonwealth Games to be held in April 2018 in Gold Coast may provide a lift to the hotel market in the city. 23
China While international arrivals into Beijing remained on the downtrend, domestic travelling is expected to continue supporting the hotel market in Beijing. As business and leisure demand continues to improve, the outlook of hotel market in Beijing is expected to remain healthy in the near term. 24
Japan Inbound arrivals to Japan continued to be robust as the number of international visitors YTD September posted growth of 17.9% y-o-y 1. Looking ahead, the hotel markets in Tokyo and Osaka are expected to continue trading at a healthy level in the near term. However, performance improvement in these markets is expected to be moderate amidst increasingly competitive operating environment. Note: 1. Source: Japan National Tourism Organisation 25
Singapore Inbound arrivals continued to grow, increasing by 4.0% y-o-y YTD August 2017 1 and Singapore remained a premium destination for MICE. Singapore was awarded 2016 s top international association meetings city in Asia Pacific and Middle East by International Congress and Convention Association for the 15th consecutive years, and has secured large congresses in the coming years 1, which will benefit the hotel market in Singapore. While the performance of hotel market in the near term is likely to remain subdued due to the large inventory of rooms, the sector is expected to improve in the longer term as demand and supply begin to balance out. Note: 1. Source: Singapore Tourism Board 26
Ascendas Hospitality Fund Management Pte. Ltd. Ascendas Hospitality Trust Management Pte. Ltd. Managers of A-HTRUST 1 Fusionopolis Place #10-10 Galaxis Singapore 138522 Tel: +65 6774 1033 Email: info-aht@ascendas-singbridge.com www.a-htrust.com