25 Apr

Ascott Achieves S$9.3 Million First Quarter Profit

First Quarter Financial Statement ended 31 March 2002


The Ascott Group
  1Q2002 1Q2001 Change (%)
Turnover (S$ million) 69.1 61.9 12
EBITDA (S$ million) 27.0 29.6 -9
Profit attributable to shareholders (S$ million) 9.3 (8.5) nm
Earnings per share (cents) 0.60 (0.55) nm



Core Serviced Residence Sector
  1Q2002 1Q2001 Change (%)
Turnover (S$ million) 38.8 33.2 17
EBITDA (S$ million) 19.5 12.6 54

The Ascott Group, Asia Pacific’s largest serviced residence company, reported a first quarter profit of S$9.3 million, and strong growth in its core serviced residence business.

Its first quarter group turnover of S$69.1 million was a 12 per cent increase over the first quarter 2001, and three per cent higher than the previous quarter. This was due to higher contributions from its serviced residence business.

Group EBITDA rose 64 per cent over the previous quarter. But this was nine per cent less than the first quarter 2001, due to the company’s divesting its non-core businesses.

At Ascott’s core serviced residence sector, EBITDA grew a robust 54 per cent to S$19.5 million over the first quarter last year, while turnover rose 17 per cent to S$38.8 million.

Compared to the previous quarter, the serviced residence turnover grew seven per cent and EBITDA rose 375 per cent.

The better performance was partly due to higher occupancies in most of Ascott’s properties in Vietnam, New Zealand and China, and new contributions from its Oakford serviced residences in Australia and recently opened properties.

The large EBITDA rise over the previous quarter was also due to one-off items. Ascott saw a S$5.8 million gain in the first quarter this year from the sale of The Ascott Mayfair in London to its UK joint venture company. Earnings in the previous quarter saw a deduction of S$4.9 million in one-off charges for the group’s new ventures in Australia and the UK.

Mr Liew Mun Leong, Ascott’s deputy chairman, and its parent company CapitaLand Limited’s president, said: "The first quarter 2002 marks a milestone in Ascott’s transformation into a pure play serviced residence company.

"For the first time, contributions from its core serviced residence business to group turnover and EBITDA was higher than the other non-core sectors combined. Ascott is on track in executing its strategy to become a leading international serviced residence company with well recognised brands."

Ascott’s chief executive officer, Mr Kee Teck Koon, said: "The first quarter is usually the serviced residence industry’s weakest. This year, there was the added challenge of the aftermath of the September 11 incident. Yet Ascott’s performance has been resilient. We have continued to strengthen the quality of our earnings stream, and consolidate our market leadership in key cities.

"We expect the second quarter to be profitable. The group should benefit from the recovery of the London and Singapore serviced residence markets, and the improved economic outlook of many cities we operate in."

He added: "Going forward, our serviced residence business will increasingly contribute the bulk of group earnings, as our new residences stabilise their operations and we divest more non-core assets."

Mr Kee added that Ascott plans to divest another S$50 million to S$100 million non-core assets over the next two quarters. Together with the completed sale of its interest in Tampines Finance Park in early April, the disposal will raise up to S$200 million in cash. Ascott will use the proceeds to pare down debts and fund earnings accretive investments in its core serviced residence business.



Ida Lim, Vice President, Investor Relations & Corporate Communications
Tel: (65) 6586 7230 Hp: (65) 9628-8339 Fax: (65) 6586 7202
Email: ida.lim@the-ascott.com

Tay Cheng Cheng, Assistant Manager
Tel: (65) 6586 7231 Hp: (65) 9010-0627 Fax: (65) 6586 7202
Email: tay.chengcheng@the-ascott.com