ASCOTT Residence Trust (Ascott Reit) posted a 23 per cent year-on-year drop in distributable income for the first quarter ended March 31, 2009 - from $14.2 million to $10.8 million.
In terms of distribution per unit (DPU), the fall is 24 per cent - from 2.33 cents in the corresponding quarter the year before to 1.77 cents. No distribution was declared for Q1 as Ascott Reit makes distributions to unitholders on a half-yearly basis.
Gross profit for the quarter fell 16 per cent to $19.9 million, while revenue registered an 8 per cent decrease to $42.1 million. The trust attributed the lower revenue to the weaker demand for serviced residences in China and Singapore, along with increased competition in Beijing and Shanghai.
The group's serviced residences in Singapore took a 27 per cent hit in revenue from $9.2 million to $6.7 million year-on-year with revenue per available unit (RevPAU) falling 33 per cent from $251 to $169 year-on-year.
'This decrease was due to lower occupancy as a result of reduction in demand from business travellers,' the group said yesterday. 'However, the performance of Indonesia, Vietnam and the rental housing business in Japan continues to be relatively stable,' said Chong Kee Hiong, chief executive officer of Ascott Residence Trust Management.
The group expects a maximum of $96 million to be due for refinancing in December. According to Mr Chong, Ascott Reit has already initiated discussions with banks to secure refinancing ahead of maturity.
While the group expects to remain profitable for 2009, it said that operating profit will be lower compared to the year before.
The counter closed half a cent lower yesterday, at 46.5 cents.
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