24 Jul

Ascott Achieves S$8.5 Million Net Profit For First Half 2003

Half Year Financial Statement


Group 1H 2003 (S$ million) 1H 2002(S$ million) Change %
Turnover 101.2 120.5 -16
EBITDA 52.1 47.5 +10
Profit Before Tax 16.0 32.7 -51
Profit Attributable to Shareholders 8.5 22.9 -63
Earnings per share (diluted) 0.55 cents 1.48 cents  
Net asset value per share End June 2003 73.0 cents End Dec 2002 74.1 cents  

Singapore July 24, 2003 -- The Ascott Group, the largest international serviced residence operator in Asia Pacific and Europe, today reported first half 2003 net profit of S$8.5 million, and profit before tax of S$16.0 million.

Net profit was 63 per cent lower than in first half 2002, due to higher divestment gains last year. First half 2002 profit had included one-off gains of S$19.0 million from asset restructuring and divestment activities. Excluding asset sale gains, first half 2003 profit slipped S$1.4 million to S$2.5 million.

Group EBITDA increased 10 per cent or S$4.5 million, mainly due to higher growth in the serviced residence sector. The growth was despite difficult operating conditions for the hospitality industry with the Iraq war and SARS outbreak.

Ascott's serviced residence EBITDA rose 14 per cent to S$39.2 million in first half 2003. The increase included a S$11.5 million contribution from Citadines Group, which Ascott acquired at end February, and a S$3.8 million asset sale gain. The increase over the first half 2002 was also due to the improved performance of Ascott's residences in China, Thailand, Vietnam and New Zealand.

Key Markets
Mr Eugene Lai, Ascott's chief executive officer, said the Iraq war and SARS outbreak negatively impacted the group's business in UK and Singapore. Compared to the first half last year, occupancies at its UK residences fell eight percentage points. At its Singapore properties, occupancies in the second quarter dipped 12 percentage points compared to the first quarter this year.

However, by mid July, the occupancies had recovered to the first half 2002 levels in the UK, and close to the first quarter 2003 levels in Singapore.

Mr Lai added: "Overall, our serviced residence business was resilient due to the longer stay profile of our guests, our diversified portfolio and growth from new investments.

"In SARS-affected Vietnam and China, the occupancies of our properties dropped slightly in April and May. But by mid-July, our occupancies in Vietnam had recovered to 93 per cent, and in China, to 74 per cent, exceeding our first quarter levels."

Mr Lai said the outlook of the major cities in which Ascott operates is improving, and the occupancies of its properties in most countries have increased since June. The next quarter and 2003 are expected to be profitable, although profit this year will be less than last year's due to higher divestment gains in 2002.

Strategy For Next Five Years
Mr Lai added that Ascott had made significant progress in achieving its five-year plan set in 2000, and is now positioned to enter the next phase of its development.

"Our new five-year plan maps our drive to become the top international serviced residence company by 2008, in terms of financial performance and internationally recognised brands," he said.

"Our key goals include strengthening the quality of our customer base, becoming the top serviced residence operator and brand in every market we operate, and strengthening our infrastructure and team."

Mr Lai added: "Given our recent rapid growth, we will focus on consolidation in the near term. Thereafter, we aim to grow to 22,500 units by 2008, harnessing scale to improve future profitability. We target to divest our remaining S$470.0 million non-core assets by end 2005, subject to getting fair value."



The Ascott Group is a leading international serviced residence company with serviced residence units spanning the gateway cities of Europe, Southeast Asia, North Asia and Australasia.

Ascott's global presence comprises 13,500 serviced residence units in more than 110 properties across 37 cities in 15 countries. These cities include London, Paris, Brussels, Berlin and Barcelona in Europe; Singapore, Bangkok, Ho Chi Minh City, Kuala Lumpur, Tokyo, Shanghai and Beijing in Asia; and Sydney, Melbourne and Auckland in Australasia.

Headquartered in Singapore, The Ascott Group pioneered the Asia Pacific's first branded luxury serviced residence in 1984. Today, it boasts a 19-year industry track record and serviced residence brands that enjoy strong recognition worldwide.

The Group's flagship The Ascott luxury serviced residence brand projects an elegant lifestyle appealing to top executives. Its Somerset upper-tier brand offers stylish, contemporary living for senior to upper management executives. The mid-tier Oakford brand in Australia and Citadines brand in Europe provide corporate executives with comfortable city residences.

Listed on the mainboard of the Singapore Exchange, the Group is the serviced residence arm of CapitaLand Limited, one of the largest listed property companies in Asia.

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, VP, 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