Gordon Tang’s Acrophyte trust tumbles 13% after distribution suspended
Hospitality trust’s H1 distributable income dips 35.8% to US$1.8 million; distribution suspended until H2 2028
[SINGAPORE] The managers of Acrophyte Hospitality Trust on Thursday (Aug 6) recorded distributable income of US$1.8 million for its first half ended Jun 30, down 35.8 per cent year on year from US$2.8 million.
It will suspend distribution to its stapled securityholders from H1 till H2 2028, due to the “significant capital requirements of the stapled group and its limited funding capacity”, the managers noted.
“Distributions may recommence earlier if circumstances permit,” they added.
Investors reacted swiftly to the news announced on Thursday before trading started. By 10.30 am, the trust was down 13 per cent before recovering slightly.
For the six months, revenue declined 2.6 per cent on the year to US$76.1 million, from US$78.1 million before.
Net property income also fell 6.1 per cent to US$16.9 million for the period, from US$18 million a year prior.
Operating profit dipped 5.9 per cent to US$25.1 million, from US$26.7 million in the same year-ago period.
The trust’s managers said its rising capital expenditure stems mainly from renovations and ongoing portfolio maintenance.
“To preserve liquidity during the Covid-19 pandemic, (the) renovations were deferred, resulting in a substantial backlog of capex.
“The managers estimate that approximately US$100 million of capex will be required over FY2025 to FY2027, of which approximately US$30.5 million has incurred in FY2025, while US$26.6 million is expected in FY2026 and approximately US$45 million in FY2027,” they said.
Currently, its estimated capex has increased due to higher imported material and labour costs arising from changes in US trade and immigration policies and ongoing geopolitical conflict.
The counter ended 2.1 per cent or US$0.005 lower at US$0.23 on Wednesday.
