Investor Relations

Financial Information

Unaudited Financial Statements Announcement For the half year and full year ended 31 December 2024

Financials Archive
Financial Statement (691 KB)
Press Release (196 KB)
Presentation Slides (1812 KB)

 

Statements of Total Return and Distribution Statements

The Manager resolved to distribute S$41.9 million to Stapled Securityholders for 2H 2024, comprising taxable income of S$32.0 million; and other gains of S$9.9 million from the divestment of VRCQ. Far East H-REIT's distribution policy is to distribute at least 90.0% of its taxable income for the full financial year. For FY 2024, the Manager has resolved to distribute 100.0% of its taxable income available for distribution to the Stapled Securityholders.

Notes:

NM - Not meaningful

  1. Refer to section 8 on "Review of performance" for the explanation of variances.
  2. The increase in property tax expense is due to higher annual value assessments by Inland Revenue Authority of Singapore ("IRAS") for all properties.
  3. Higher finance expenses are mainly due to higher interest rates on the floating rate loans.
  4. The share of results of joint venture relates to the equity accounting of Fontaine Investment Pte Ltd ("FIPL")'s results. The share of losses has exceeded the carrying amount of the investment since December 2021.
  5. The unrealised foreign exchange loss arose from exchange difference on the US dollar denominated term loan. A cross currency swap ("CCS") has been entered into to hedge against any foreign exchange exposure on the principal and interest payments. This is a non-tax chargeable / deductible item and has no impact on the taxable income and distributable income to the Stapled Securityholders.
  6. This relates to net change in fair value of interest rate swap and cross currency swap contracts entered to hedge against the interest rate and foreign currency exposure of Far East H-REIT. This is a non-tax chargeable / deductible item and has no impact on the taxable income and distributable income to the Stapled Securityholders.
  7. The fair value change in investment properties of S$12.4 million for FY 2024 arose from the revaluation of 9 hotels and 3 SRs as at 31 December 2024. The independent valuations of the investment properties were carried out by Savills Valuation And Professional Services (S) Pte. Ltd. and CBRE Pte. Ltd. Please refer to Note 1(e)(3) Investment properties for more details. This is a non-tax chargeable / deductible item and has no impact on the taxable income and distributable income to the Stapled Securityholders.
  8. The gain on disposal of investment property pertains to the incentive fee received on 24 March 2023 for the divestment of VRCQ which was completed in March 2022.
  9. Included in the net distribution adjustments are the following:

    Notes:

    1. This represents 60% (2H 2023 and FY 2023: 90%) of REIT Manager's fees paid/payable in Stapled Securities.

  10. The rollover adjustment for FY 2024 relates to the difference between the taxable income previously distributed and the quantum finally agreed with the IRAS for the Year of Assessment ("YA") 2023. The rollover adjustment for FY 2023 relates to the difference between the taxable income previously distributed and the quantum finally agreed with the IRAS for the YA 2021 and YA 2022.
  11. For 2H 2024, this relates to taxable income that was not distributed in 1H 2024 due to rounding. For 2H 2023, this relates to the release of the S$2.3 million of taxable income available for distribution to Stapled Securityholders that was not distributed in 1H 2023.
  12. Other adjustments for Far East H-Trust pertains primarily to the net accounting results of Far East H-BT.
  13. Income available for distribution for 2H 2024 and FY 2024 would be 4.9% higher at S$34.3 million and 4.8% higher at S$69.8 million respectively if not for the change in proportion of REIT Manager's fee paid/payable in the form of Stapled Securities from 90% to 60%.

Balance Sheets as at 31 December 2024

Notes:

  1. The increase in investment properties was mainly attributable to the Earn-Out Amount for Oasia Hotel Downtown ("OHD") of S$15.0 million, capital expenditure capitalised for Village Hotel Albert Court, Vibe Hotel Singapore Orchard, Village Residences Robertson Quay, Orchard Rendezvous Hotel, and Rendezvous Hotel Singapore, and partially offset by the fair value change in investment properties of S$12.4 million.

    As the Earn-out Event Condition whereby the net property income of OHD is at least S$9.9 million per annum for two full consecutive years has been met, the Earn-out Amount will be payable in the form of Stapled Securities. The acquisition of OHD was completed in April 2018 with initial purchase price of S$210.0 million with a potential Earn-out Amount of S$15.0 million. As at 31 December 2024, the independent valuation was S$278.0 million carried out by Savills Valuation And Professional Services (S) Pte. Ltd.

    Please refer to the details in Note 1(e)(3) Investment properties.
  2. This relates to the 30% joint venture interest in FIPL, for which the share of losses exceeded the carrying value of investment as at 31 December 2024.
  3. This relates to the fair value of interest rate swap and CCS contracts entered to hedge against interest rate risk and foreign exchange exposure of Far East H-REIT.
  4. Cash and cash equivalents comprise cash at bank of S$3.2 million and fixed deposits of S$16.5 million. The decrease in cash and cash equivalents is mainly due to the prepayment of term loan of S$23.6 million and payment of distributions.
  5. This includes a shareholders' loan and accrued interest due from FIPL of S$38.0 million. The amount is used to finance the development of Village Hotel Sentosa, The Outpost Hotel Sentosa and The Barracks Hotel Sentosa which commenced hotel operations in 2019.
  6. The total gross borrowings as at 31 December 2024 of S$718.1 million was S$20.5 million lower compared to balances as at 31 December 2023 due to prepayment of term loan of S$23.6 million in June 2024, and partially offset by unrealised foreign exchange loss on the US dollar denominated term loan.

    On 23 December 2024, two new facilities were drawn down to early refinance S$107.2 million and S$50.0 million term loans which were due to mature on 2 April 2025 and 12 November 2025 respectively.

    As at 31 December 2024, Far East H-REIT has undrawn and uncommitted revolving credit facilities ("RCF") of S$275.0 million with 3 banks to fulfill its liabilities as and when they fall due.

    Please refer to the details of aggregate amount of borrowings as disclosed in Note 1(e)(4) Borrowings.

Review of the performance of half year ended 31 December 2024

2H 2024 vs 2H 2023

Gross revenue for 2H 2024 grew 0.2% year-on-year ("YoY") to S$54.9 million. This increase was recorded despite the absence of non-recurring revenue from hotels contracted for isolation purposes since the third quarter of the prior year. Excluding the effect of this one-off revenue, the Hotels segment would have posted an increase, and gross revenue would have risen by 4.1%.

The Hotels segment recorded a 5.2% increase in the average daily rate ("ADR") to S$180 as the hotels were able to achieve higher rate increases in tandem with the market after the last of the hotels exited the government contracts by end 2023. Average occupancy was marginally lower by 0.2 percentage points ("pp") to 81.5%, reflecting the transition from government contracts with full occupancy to market-driven performance. Overall, revenue per available room ("RevPAR") increased by 5.0% to S$147.

For the Serviced Residences ("SRs") segment, ADR rose by 3.2% to S$276, reflecting positive pricing trends from the market. However, average occupancy eased to 83.2%, due primarily to lift upgrading works at one of the apartment blocks at Village Residence Robertson Quay which affected accessibility temporarily during the fourth quarter. Consequently, revenue per available unit ("RevPAU") decreased by 1.6% to S$230.

A snapshot of the performance of the Hotel and SR segments for 2H 2024 is set out below.

The retail and office spaces in the portfolio performed well, with revenue growing 7.4% YoY to S$8.7 million. Higher rental rates and improved occupancies were achieved in the retail spaces. The retail segment saw stronger performance, supported by better leasing activities and demand, while office spaces maintained high occupancy levels overall, underpinned by steady lease renewals.

Net property income for 2H 2024 grew to S$49.9 million, improving from the same period in 2023. Finance expenses increased at a slower pace of S$2.1 million YoY in 2H 2024, compared to a S$3.1 million YoY rise in 1H 2024, stabilising around S$15.2 million in both periods.

Distribution to Stapled Securityholders for 2H 2024 decreased by 3.6% to S$41.9 million mainly due to higher finance expenses and a change in the proportion of the REIT Manager's fee paid or payable in the form of Stapled Securities, which was offset substantially by the distribution of other gains from the divestment of Central Square of S$9.9 million. This translates to a distribution per Stapled Security for 2H 2024 of 2.08 cents compared to 2.17 cents for the preceding period.

FY 2024 vs FY 2023

Gross revenue for FY 2024 increased 1.8% YoY to S$108.7 million, primarily supported by higher revenue from the retail and office spaces as well as greater contributions from master lease rentals of the Hotels and SRs. Variable rents from the combined Hotel and SR portfolio rose 2.6% YoY, reflecting improved operating performance for both segments. This growth was achieved despite the absence of non-recurring revenue from hotels contracted for isolation purposes in the prior year. Excluding the effect of this one-off revenue, gross revenue would have risen by 6.2%.

During the year, the Hotels segment recorded a 0.9 pp improvement in average occupancy to 81.0%, with ADR increasing 4.5% to S$178, reflecting the portfolio's steady recovery following the conclusion of government contracts in the prior year. The 30-day visa free waiver for Chinese travellers also contributed to a significant increase in visitors from China, further supporting hotel demand. This, along with major events and large-scale performances helped to bolster performance, particularly in first and third quarters of 2024. Overall, RevPAR increased 5.7% year-on-year to S$144.

The SRs segment recorded a 4.0% increase in ADR to S$271, supported by favourable pricing trends and a greater proportion of short-stay leisure bookings. Average occupancy remained healthy at 84.2%, comparable to the pre-pandemic level of 83.5% in 2019, keeping RevPAU stable at S$228.

A snapshot of the performance of the Hotel and SR segments for FY 2024 is set out below.

For the year, revenue from retail and office spaces amounted to S$17.3 million, reflecting a 7.3% YoY increase driven by higher retail and office rental rates and improved retail occupancies. The retail segment experienced stronger performance, supported by improved leasing activity following the exit of properties from government contracts. The office spaces maintained high overall occupancies, underpinned by steady lease renewals.

Net property income for the year grew 0.6% YoY to S$99.3 million as a result of higher revenue but partially offset by higher property tax expenses. Finance expenses increased 20.6% YoY to S$30.4 million mainly due to higher interest rates on the floating rate loans earlier in the year.

Distribution to Stapled Securityholders for FY 2024 decreased 0.6% to S$81.4 million as a result of higher finance expenses and a change in the proportion of the REIT Manager's fee paid or payable in the form of Stapled Securities, which was offset substantially by the distribution of other gains from the divestment of Central Square of S$16.1 million. This translates to a distribution per Stapled Security for FY 2024 of 4.04 cents compared to 4.09 cents for the preceding period.

Commentary on the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

Singapore's hospitality sector is expected to benefit from sustained travel demand, a healthy line up of global events, and expanding air connectivity in 2025. The Singapore Tourism Board ("STB")2 projects visitor arrivals to reach between 17.0 and 18.5 million, building on the 16.5 million recorded in 2024. In addition, the International Air Transport Association ("IATA") forecasts3 global air travel to grow by 6.7% in 2025, surpassing five billion passengers for the first time. This optimism is reflected in traveller sentiment, with a Skyscanner survey4 indicating that 80% of the respondents plan to take the same number or more trips in 2025, with 70% maintaining or increasing spending on flights and 68% on accommodations. This highlights the resilience of travel demand, supporting the sector's sustained recovery.

Singapore's expanding tourism offerings will further enhance its attractiveness as a global travel destination. In 2025, several attractions will open, reinforcing Singapore's status as a premier hub for family and leisure travel. Rainforest Wild Asia, Singapore's fifth wildlife park and Asia's first adventure-based zoological park, is set to open in March 2025. Minion Land at Universal Studios Singapore, the first of its kind in Southeast Asia, will open in February 2025, while the expanded Singapore Oceanarium, three times larger than its predecessor, is scheduled for launch in the first half of the year. Towards the end of 2025, Disney Adventure, Walt Disney's first and largest Asia-based cruise ship will set sail from Singapore, further strengthening the country's position as a key tourism hub.

On a macroeconomic front, the International Monetary Fund5 projects global GDP growth of 3.3%, with China and ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore, Thailand) expanding at 4.6% and 4.5%, respectively. However, challenges remain. Geopolitical tensions and economic uncertainties may weigh on consumer confidence while a strong Singapore dollar could impact affordability for some markets. Nonetheless, lower inflation and potential interest rate adjustments in the major markets could boost travel spending. Furthermore, the Trust has a diversified range of hotels which cater to a wide range of guests, including those from the price-sensitive mass market segment.

The REIT Manager remains positive about the future prospects of the REIT Sector and hospitality industry. The Singapore interest rate is expected to ease, which will lead to lower financing costs for Far East H-Trust. With the continued recovery in leisure and corporate travel, coupled with new attractions and policy-driven tourism initiatives, Singapore remains a premier destination for business, entertainment, cultural and culinary experiences.

Notes:

2Singapore Achieves Historical High in Tourism Receipts in 2024 (Singapore Tourism Board), 4 February 2025
3Strengthened profitability expected in 2025 even as supply chain issues persist (International Air Transport Association), 10 December 2024
42025 Horizons Report (Skyscanner), 11 October 2024, with results from a survey of 19,000 respondents
5World Economic Outlook Update (International Monetary Fund), 17 January 2025