26 Oct

Ascott's Third Quarter Profit Jumps 300 Per Cent to S$28.9 million

Third Quarter Financial Statement

Group Q3 04 S$ m Q3 03 S$ m change 9 Mths 04
S$ m
9 Mths 03
S$ m
Revenue 51.2 46.6 10% 156.6 147.8 6%
Profit Before Tax 35.9 12.2 194% 65.6 36.2 81%
Net Profit 28.9 7.2 301% 46.5 21.7 115%
Earnings Per Share (diluted) 1.85 cts 0.46 cts -- 2.98 cts 1.40 cts --
Net Asset Value Per Share --   --  -- 80.3 cts
at end Sep 2004
80.1 cts
at end Dec 2003

Ascott's third quarter net profit surged 300 per cent to S$28.9 million compared to a year ago. Ascott's third quarter net profit surged 300 per cent to S$28.9 million compared to a year ago.

This was due to a net gain of S$24 million from the sale of Scotts Shopping Centre and The Ascott Singapore, after offsetting one-off provisions mainly for certain non-core investments in China.

Third quarter group revenue rose 10 per cent to S$51.2 million, driven by higher sales from the core serviced residence business. This core serviced residence revenue was up 14 per cent to S$42.8 million, from growth in the group's Singapore, Asia and Europe markets, and new Australian properties.

First Nine Months
The group's net profit, for the first nine months this year, jumped 115 per cent to S$46.5 million from a year ago.

This included S$36.9 million gains from the sale of its interest in properties in Singapore, Malaysia and Thailand, in line with its strategy to increase its capital productivity, partly offset by one-off provisions of S$6.9 million.

Net profit for the core serviced residence business increased by S$3.2 million to S$7.6 million, in the first nine months, due to the stronger performance of its serviced residences in Singapore, China, Vietnam and Europe.

Group revenue for the first nine months went up six per cent to S$156.6 million. Revenue from the core serviced residence business rose 15 per cent to S$125.9 million, and more than offset the lower revenues from the non-core retail and residential segments, which are being phased out.

The winding down of the non-core segments is in line with the group's strategy to redeploy resources and focus on growing its global serviced residence business.

Stronger Platform For Earnings Growth
Ascott's chairman, Mr Lim Chin Beng, said that the business outlook for the global hospitality industry remains positive for the fourth quarter this year. The group's profit for 2004 is expected to be higher than last year's.

He added: "Once Ascott completes the acquisition of the Citadines serviced residence chain at end October, it will have a ready operational infrastructure across 18 cities in Europe, and a stronger platform for earnings growth."

Citadines is Europe's largest branded serviced residence chain with 5,000 apartments in France, Belgium, Germany, Spain and UK.

Mr Liew Mun Leong, Ascott's deputy chairman and president and CEO of its parent company, CapitaLand Limited, said: "Ascott has embarked on a programme to rationalise its assets and to actively improve its capital productivity.

"In line with its asset light strategy, Ascott will focus on securing more management contracts to increase its fee-based income and grow its portfolio. Over the last quarter, Ascott's management has been on target in securing three new management contracts, entered into new markets, namely the Seoul and Suzhou markets, and introduced the Citadines brand into China."

In September, Ascott clinched the contracts for a 348-unit Somerset serviced residence in Seoul, the 167-unit Somerset Chongrui in Suzhou, and 239-unit Citadines Jinqiao in Shanghai, its first Citadines property in Asia.

Improved Performance in Asia and Europe
Mr Cameron Ong, Ascott's chief executive officer, said: "The serviced residences in Singapore, China, Vietnam and Europe have achieved stronger performance mainly through revenue growth from vigorous sales and marketing activities. We will also launch the mid-tier Citadines brand to tap new customer segments in China and soon Southeast Asia, while leveraging on our substantial operational and marketing infrastructure in these countries.

"In Australia, occupancies at the group's three start-up properties in Sydney and Melbourne were low earlier in the quarter, dragging the overall country performance. The properties have since improved their occupancies."

The Ascott Sathorn Bangkok Opened Today
The group's luxury The Ascott Sathorn serviced residence in Bangkok was opened today (Oct 26) by Thailand's Deputy Prime Minister, Mr Chaturon Chaisang, and Singapore's Minister of National Development, Mr Mah Bow Tan.

The 177-unit residence boasts prime location in the central business district, close to Silom and Sukhumvit, and two skytrain stations.

Purpose-built to be one of Ascott's finest flagship residences in Asia Pacific and to set new industry benchmarks, the property features some of the most luxurious interior fittings and facilities in serviced residences.

In the hospitality industry, it is the first in Bangkok to offer wireless internet connectivity throughout, and features one of the largest health centres in Asia Pacific at 3,500 sq metres.

Ascott's fourth property in Bangkok, The Ascott Sathorn will reinforce the group's leadership in the city's serviced residence market, where it is already the largest international operator.




About The Ascott Group 

The Ascott Group is a leading international serviced residence company with 13,800 serviced residence units in the key cities of Europe and Asia Pacific.

Ascott's global presence spans 40 cities in 17 countries. These include London, Paris, Brussels, Berlin and Barcelona in Europe; Singapore, Bangkok, Hanoi, Kuala Lumpur, Tokyo, Seoul, Shanghai and Beijing in Asia; Sydney and Auckland in Australia and New Zealand; and Dubai in the Gulf region.

Through its marketing alliance with Equity Corporate Housing, the group also offers upper-tier serviced apartments throughout the US. Headquartered in Singapore, The Ascott Group pioneered the Asia Pacific's first branded luxury serviced residence in 1984. Today, it boasts a 20-year industry track record and serviced residence brands that enjoy 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 Citadines brand provides corporate executives with comfortable city residences.

Recent awards the group has clinched include the 2004 Business Traveller Best Serviced Residence Brand and Best Serviced Residence property in Asia Pacific awards. Earlier this year, it took the Number One position in the 2004 China's Top 100 Serviced Residences ranking for its eight properties in China. Ascott also won the 2004 Vietnam Economic Times' Best Service in Serviced Apartments awards in Hanoi and Ho Chi Minh City, and Best Annual Report and Best Operating & Financial Review awards at Singapore's 2004 Annual Report Awards.

Listed on the mainboard of the Singapore Exchange, Ascott is the serviced residence arm of CapitaLand Limited, one of Asia's largest listed property companies. Headquartered in Singapore, CapitaLand's core businesses in property, hospitality, property services and real estate financial services are focused in gateway cities in Asia, Australia and Europe. The company's hospitality businesses in hotels and serviced residences span more than 60 cities around the world.

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



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

Lilian Goh, Manager
Tel: (65) 6586 7231         Hp: (65) 9795 5225    Email: lilian.goh@the-ascott.com