25 Jul

Ascott Achieves Higher Profits For First Half 2002

Half Year Financial Statement ended 30 June 2002

  1H 2002
S$ million
1H 2001
S$ million
Change %
Turnover 122.3 141.6 -14
EBITDA 60.9 56.9 +7
Attributable Profit 22.9 4.1 +461
Earnings Per Share 1.48 cents 0.26 cents +469
Net Tangible Assets Per Share 74.7 cents 82.0 cents - 9


Serviced Residence Sector    
  1H 2002
S$ million
1H 2001
S$ million
Change %
Turnover 77.9 68.0 +15
EBITDA 30.8 27.1 +14

The Ascott Group reported a profit rise of S$18.8 million to S$22.9 million for the first half of this year, compared to the first half of last year.

Group EBITDA for the first half of the year went up seven per cent to S$60.9 million, due to higher contributions from its core serviced residence business

The EBITDA for Ascott's serviced residence sector jumped 14 per cent to S$30.8 million. This was due to a S$5.8 million gain from the sale of a subsidiary owning The Ascott Mayfair in London, and improved occupancy and rental rates at its residences in China, Auckland and Vietnam.

The Ascott Group's chief executive officer, Mr Kee Teck Koon, said that the September 11 terrorist attacks and general global economic slowdown had negatively impacted a few of the group's serviced residence markets.

However, Ascott expects improved operational performance from its serviced residence business in the third quarter.

"The economic outlook of the cities we operate in are improving. Our performance in the third quarter should particularly benefit from the recovery of the London and Singapore markets, which we are already seeing now in increased reservations. Earnings from our retail properties should be stable," said Mr Kee.

He added that a S$2.5 million gain from the sale of Ascott's subsidiaries owning Somerset Grand Shanghai serviced residence and a plot of land in Shanghai will be recognised in the third quarter.

Mr Kee said that Ascott expects a profitable 2002. However, attributable profit this year is expected to be lower than for 2001, as last year's profit was underpinned by S$85.7 million in divestment gains from the sale of Funan The IT Mall and Junction 8 shopping centres.

Global Serviced Residence Chain
Mr Kee said that the group will continue to focus on building its presence in Europe and North Asia in the second half of the year. It will also continue its strategy to achieve high capital productivity by securing more serviced residence management contracts and leases.

He added that Ascott is on-target in its transformation into a pure play global serviced residence company. Its core serviced residence business today contributes 64 per cent of its total turnover compared to 48 per cent in the first half of last year.

"This trend will accelerate as we grow our serviced residence portfolio, stabilise the operations of our new properties, and dispose non-core assets," said Mr Kee.

He added that Ascott's gearing has also decreased from 0.81 to 0.42, placing the group in a strong financial position to capitalise on international investment opportunities.

As part of its restructuring, Ascott has divested S$148 million non-core properties in the first six months of the year. It now has S$586 million non-core assets in its books, a decrease of S$670 million from the first half last year.

At the same time, Ascott has added 2,200 operational serviced apartments to its portfolio, and substantially expanded its presence beyond Asia to Australasia and the UK since mid-last year.

In line with its asset light strategy, the group has also secured six more serviced residence management contracts and leases since January.

Non-Core Sectors
EBITDA for Ascott's non-core 'residential and others' sector increased by S$26.5 million in the first half of the year to S$18.3 million, compared to a loss of S$8.2 million in the first half last year.

This was due to a net gain of S$16.8 million from the divestment of its non-core subsidiaries York Road Limited, LC Ventura Tampines and Costa Sands resorts.

As part of the planned restructuring, the EBITDA for Ascott's non-core retail business dropped 69 per cent to S$11.8 million. This was due to reduced rental income following the divestments of its Orchard Point, Junction 8 and Funan The IT Mall shopping centres in 2001.









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