Ascott’s Q4 Net Profit Triples On Divestment Gains

Source : The Business Times, January 26, 2008

THE Ascott Group, Asia’s biggest operator of serviced apartments, yesterday said that its fourth-quarter profit more than tripled on the back of divestment gains.

Net profit for the three months ended Dec 31, 2007 rose to $45.4 million from $13.6 million a year earlier. Q4 earnings per share rose to 2.8 cents, from 0.9 of a cent a year earlier.

The company is recommending a total cash dividend of six cents a share, including a bonus dividend of 4.8 cents.

Ascott’s performance was boosted by the divestment of the Somerset Bayswater property in London, which gave it a net gain of $17.8 million. The company also saw some gains from the sale of a golf course in Guangzhou.

Q4 revenue rose 14 per cent to $116.5 million, from $102.1 million a year earlier, as Ascott benefited from increases in revenue per available unit and better fee-based income.

During the quarter, Ascott’s property portfolio also crossed the 20,000-unit mark for the first time. The company added 3,528 units to its stable, taking the total number of serviced residence units under its management to 20,449. Ascott plans to have to have 25,000 apartments in Asia, Europe and the Gulf region by 2010.

For the whole of 2007, Ascott’s net profit rose 8 per cent to $177.3 million, from $163.6 million in 2006. Revenue for the full year rose 7 per cent to $435.3 million, from $405.9 million previously.

Ascott will continue to grow its portfolio, said chief executive Jennie Chua yesterday. ‘I think crossing the 20,000-mark makes us the largest owner-operator of serviced residences in the world. We will continue to grow, in the right cities and the right locations.’

Ms Chua aims to expand Ascott’s presence in South-east Asia, China, India and Europe. For South-east Asia, Vietnam and the Philippines are particularly attractive, she said.

In a separate statement, Ascott said that it would invest A$136.2 million (S$170.4 million) to develop a 398-unit property in Melbourne’s central business district. The investment amount includes land and building costs. The property will be Ascott’s first Citadines-branded serviced residence in Australia, the company said.

Ascott’s parent company, CapitaLand, made a general offer for Ascott on Jan 7 in a deal that values the serviced residence company at $2.8 billion.

CapitaLand, South-east Asia’s largest property firm by market value, owns 66.5 per cent of Ascott and intends to pay up to $989.5 million - or $1.73 a share - for the remaining shares in Ascott to take the company private. Ascott’s shares closed one cent lower at $1.72 yesterday.