23 Oct

Ascott Achieves Increased Profits

3rd Quarter Financial Statement ended 30 September 2002

                                                   FINANCIAL HIGHLIGHTS
                                     For Nine Months Ended September 30, 2002

  First Nine Months Third Quarter
2002 2001 Change
Q3 2002
Q3 2001
   Turnover (S$million) 182.0 215.2 - 15 59.8 73.6 - 19
   EBITDA (S$million) 80.5 83.5 - 4 19.7 26.6 - 26
   Attributable Profit (S$million) 25.7 7.6 237 2.8 2.7 3.7
   Earnings per share (cents) 1.66 0.49 - 0.18 0.17 -
   Net tangible assets per share (cents) 75.3 81.2 - - - -


Serviced Residence Sector
  First Nine Months Third Quarter
2002 2001 Change
Q3 2002
Q3 2001
   Turnover (S$million) 117.1 102.6 14 39.2 34.6 13
   EBITDA (S$million) 43.5 36.5 19 12.7 9.4 35

The Ascott Group achieved S$25.7 million profit for the first nine months of the year. This is a 237 per cent increase over the same period last year.

Its third quarter profit rose by S$0.1 million to S$2.8 million, compared to last year’s third quarter profit of S$2.7 million.  The profit would have been S$2.3 million higher, if not for a reversal of prior years' interest cost recovery for its The Ascott Beijing serviced residence.

Due to the planned winding down of Ascott's non- core retail and residential trading sectors, group turnover for the first nine months dropped 15 per cent to S$182.0 million, and third quarter turnover dipped 19 per cent to S$59.8 million, compared to the same periods last year.

Strong Serviced Residence Growth
However, growth in Ascott’s core serviced residence business was vigorous. Serviced residence turnover rose 14 per cent in the first nine months of the year to S$117.1 million. In the third quarter, serviced residence turnover grew 13 per cent to S$39.2 million, compared to the third quarter 2001.

The higher turnover was mainly due to new contributions from the Oakford serviced residences in Australia, and The Ascott Pudong and Somerset Fortune Garden residences in China. This was partly offset by lower contributions from the Singapore properties.

Serviced residence EBITDA for the first nine months of the year rose 19 per cent to S$43.5 million. This was due largely to a gain of S$5.8 million from the sale of a wholly owned subsidiary owning The Ascott Mayfair to a joint venture, and higher occupancy and rental rates achieved in China, Vietnam and New Zealand.

Serviced residence EBITDA for the third quarter increased by a healthy 35 per cent to S$12.7 million. This was due to higher contributions from the group’s residences in China, Vietnam and New Zealand, offset by losses at its Oakford residences in Australia and the weaker performance of its Singapore properties.

Group profit for the first nine months of the year was boosted by gain of S$21.5 million from asset sales, largely from the disposal of a piece of land in the UK and The Ascott Mayfair to a joint venture.

Ascott’s chief executive officer, Mr Kee Teck Koon, said that for the first nine months of the year, the aftermath of the September 11 incident and general economic slowdown depressed Ascott's performance in Singapore and the UK. Elsewhere in Asia, such as in China, Thailand and Vietnam, growth was robust.

Contributions from Ascott’s non-core retail sector remained steady while the residential trading sector is being phased out.

Mr Kee added that based on Ascott’s current occupancy and forward bookings, he expects the fourth quarter and 2002 to be profitable.  However, profit will not be as high as last year’s, which had included S$85.7 million in divestment gains from the sale of Funan and Junction 8 retail malls in the fourth quarter.

He said: The slower global economic recovery, threat of the Gulf war and Bali terrorist incidents will impact cross border movements of the business community.

However, our business in Singapore has begun to recover, showing improved performance over the first half year. Our newly acquired UK and Australian portfolios are stabilising and we expect our business in China, Thailand and Vietnam to remain strong. Rental income at our retail properties should also be stable in the short term.

Focused Serviced Residence Company
Mr Kee added that for the first nine months of the year, the group had continued its drive to transform itself into a pure play serviced residence company.  It divested S$183 million non-core assets, and by end September, had only S$531 million remaining non-core properties. Ascott had disposed S$705 million non-core assets since end September 2001.

Proceeds from the asset sales were used to pare down debt and fund growth in the serviced residence sector. Ascott’s debt / equity ratio was reduced to 0.33 at end September, from 0.85 a year ago.

During the period, the group also expanded its serviced residence business with new investments in Australia and the UK, and new management contracts in Japan, China and the Philippines. The number of operational serviced apartments increased by 2,300 to 7,000 units.

The serviced residence business now accounts for 64 per cent of group turnover compared to 48 per cent a year ago, making it the largest contributor to Ascott's revenue.

Mr Kee added that Ascott has put in place an international marketing infrastructure and its customer base today comprises many of the world's largest multinational companies. The group is also working to transform its The Ascott and Somerset brands, which are market leaders in Asia, into global brands.

Ascott has also set new benchmarks in the industry with its ‘enriched living experience’ programme which aims to provide guests with a nurturing home and support community. It organises activities to facilitate guests’ business networking, community integration and family recreation in a city.

These range from the serviced residences' building links with the leading business associations in a city to enable its guests to network more easily, to organising innovative social gatherings, adventure trips and recreational events, and providing practical advice on living successfully in the city.

Mr Kee added that Ascott is on target in its plans to increase its portfolio from its current 8,300 serviced residence units to 15,000 by 2005, and boost its presence in North Asia, Europe and the US.

Today, The Ascott Group is one of the world’s leading serviced residence chains, with properties in 20 cities in 11 countries spanning Southeast Asia, North Asia, Australasia and the UK.



The Ascott Group is a leading international serviced residence company.  It manages a portfolio of 8,300 serviced residence units in 20 cities in 11 countries across Asia, Australasia and the United Kingdom.

In its drive for international leadership in the serviced residence industry, the group today commands pole positions in many gateway cities such as Singapore, London, Beijing, Shanghai, Jakarta, Hanoi, Ho Chi Minh City, Sydney and Melbourne.

The Ascott Group pioneered the Asia Pacific's first branded luxury serviced residence in 1984.  Today, it boasts an 18-year industry track record and serviced residence brands that are market leaders in the Asia Pacific.

The group's luxury The Ascott brand projects an elegant lifestyle appealing to top executives.  The Somerset brand offers stylish, contemporary living for senior to upper management executives.

Headquartered in Singapore, The Ascott Group's shares trade as 'Ascott' on the Singapore Exchange. It is the serviced residence arm of CapitaLand Limited, one of Asia’s largest listed property companies.

For reservations on Ascott properties, call Central Reservations on (65) 6272-7272 or visit the group’s website at www.the-ascott.com.


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