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Financial Highlights

Consolidated statements of net income for 2Q FY2019 and 2Q FY2018/19

Consolidated statements of comprehensive income for 2Q FY2019 and 2Q FY2018/19

Consolidated statements of net income for six months ended 30 September 2019 and 2018

Consolidated statements of comprehensive income for six months ended 30 September 2019 and 2018

Balance Sheet

Review of Performance

Revenue and Net Property Income 2Q FY2019 vs. 2Q FY2018/19

1 Computation is based on the financials rounded to the nearest dollar. Any differences between the individual amounts and total thereof are due to rounding

Group

Gross revenue and net property income ("NPI") for 2Q FY2019 were S$47.5 million and S$21.2 million, an increase of S$1.1 million and S$0.7 million respectively as compared to 2Q FY2018/19. The better performance was due to full quarter contributions from the new Japan and Korea hotels, partially offset by refurbishment of rooms in Novotel Sydney Parramatta, weaker earnings from Melbourne hotels and the unfavourable FX movement in AUD (-4.1%) and KRW (-2.7%).

Australia

The decrease in NPI of S$1.4 million was mainly attributable to impact from refurbishment of rooms in Novotel Sydney Parramatta, weaker performance from our Melbourne hotels, exacerbated by the unfavourable foreign exchange movement (S$0.4 million).

Although market conditions remained challenging in Australia, we remain positive on the longer term prospects and invested in the refurbishment of rooms in Novotel Sydney Parramatta. Revenue and NPI was therefore lower y-o-y.

Pullman & Mercure Melbourne Albert Park's room performance continued to be affected by soft market conditions but was mitigated by stronger conferencing demand.

Pullman & Mercure Brisbane King George Square achieved y-o-y growth in occupancy as a result of well-executed strategies in driving higher volume production across most segments and stronger conference and food & beverage performance.

Japan

Ariake Hotel's performance was in line with last year while Namba Hotel's performance was affected by the political tension between Japan and Korea which resulted in the decline in Korean tourists.

With the completion of acquisition of WBF East and WBF West in September 2018 and WBF Honmachi in December 2018, these three hotels contributed S$1.35 million of earnings for 2Q FY2019 to the Japan portfolio.

Korea

Splaisir Dongdaemun and ibis Insadong started contributing to the Group following the completion of the acquisition in May 2018 and December 2018 respectively.

Singapore

Income from Park Hotel Clarke Quay for 2Q FY2019 was in line with last year.

Income available for distribution

Income available for distribution for the quarter was S$16.9 million. With the retention of S$1.2 million for working capital in the quarter, income to be distributed for the quarter would be S$15.7 million, a decrease of S$0.8 million (5.1%) over the same period last year. The decrease was mainly due to absence of China sale proceeds distribution of S$1.8 million, higher net finance cost of S$1.2 million from refinancing of AUD loan and new loans taken up for acquisition of Japan and Korea hotels, higher tax expense of S$0.9 million and mitigated by higher NPI of S$0.7 million, lower foreign exchange rate loss of S$0.4 million, and net other trust income of S$2.0 million.

Revenue and Net Property Income 6 months ended 30 September 2019 and 2018

1 Computation is based on the financials rounded to the nearest dollar. Any differences between the individual amounts and total thereof are due to rounding
2 Sale of China assets was completed on 18 May 2018

Gross revenue and NPI for 6 months ended 30 September 2019 were S$94.0 million and S$42.4 million, a decrease of S$0.6 million (0.7%) and an increase of S$1.8 million (4.3%) respectively as compared to 6 months ended 30 September 2018. The lower revenue was due to weaker performance of Australia portfolio and the disposed China Group, partially offset by contribution from new hotels in Japan and Korea. The increase in NPI was lifted by the half yearly contributions from the new hotels, partially offset by the absence of earnings from China Group, impacts from refurbishment of rooms in Novotel Sydney Parramatta and Pullman & Mercure Melbourne Albert Park, weaker earnings in Melbourne hotels and unfavourable FX movement in AUD (-4.5%) and KRW (-3.6%).

After retention of S$2.3 million, income to be distributed for 6 months ended 30 September 2019 stood at S$30.3 million, a decrease of S$1.6 million (4.9%) as compared to 6 months ended 30 September 2018, primarily due to higher net finance cost of S$1.0 million from new loans taken up for acquisition of Japan and Korea hotels, higher tax expense of S$0.7million, and absence of S$3.6 million partial distribution from China sale proceeds. This was partially mitigated by higher NPI of S$1.7 million, lower retention of S$0.1 million and net other trust income of S$1.9 million.

Commentary

The demand for hotel accommodation in Australia is expected to grow as both international arrivals and domestic overnight trips continued to improve for the year ended 30 June 20191. However, the hotel market conditions in Sydney and Melbourne are expected to remain competitive in the near term due to increase in supply of hotel rooms. The hotel market in Brisbane is expected to continue its recovery, further buoyed by upcoming attractions in the city over the next few years, including the on-going development of an integrated resort in Queen's Wharf and the proposed 'Brisbane Live' entertainment precinct.

The Tokyo hotel market is expected to benefit from major international events held in the city such as the 2020 Tokyo Olympics. The hotel market in Osaka is expected to experience weaker market conditions due to a decrease in South Korean visitors against the backdrop of ongoing tension between the two countries, compounded by increase in supply of hotel rooms. However, the new attraction at Universal Studios Japan and hosting of the 2025 World Expo will provide a boost for the Osaka hotel market in the medium term. The proposed development of two integrated resorts in Japan will also benefit the tourism sector of the country in the longer term.

International arrivals into South Korea continued to be robust with a y-o-y growth of 16.1% to 12.9 million visitors year-to-date ("YTD") September 20192. Its top three source markets posted strong growth, with the number of Chinese visitors increasing by 27.1% y-o-y for the period YTD September 20192 . With upcoming supply of hotel rooms expected to be relatively moderate, the general performance hotel market is expected to improve as inbound arrivals continue to grow.

The growth trend in international arrivals continued as Singapore welcomed 12.9 million international visitors during the first eight months of 2019, an increase of 1.9% y-o-y3, and the new developments such as expansion of the two integrated resorts are expected to continue driving inbound over the longer term. Singapore was also recently ranked as world's most competitive economy, reinforcing its position as a key global economic centre which is expected to drive corporate demand. As inbound arrivals continue to grow, this will support the hotel market amidst the expected modest increase in supply.

Proposed Combination

The proposed combination between A-HTRUST and Ascott Residence Trust ("Combination") was approved by stapled securityholders of A-HTRUST at the extraordinary general meeting and scheme meeting held on 21 October 2019. Subject to the Combination being sanctioned by the Court, the last day of trading of the stapled securities of A-HTRUST is expected to be 16 December 2019 with the expected delisting of A-HTRUST on 3 January 2020.

The abovementioned dates are indicative and may be subject to change. Please refer to future announcement(s) for the exact dates of these events and further details of the Combination.

In connection with the Combination, the Managers will continue to engage the various lenders of the existing borrowings of A-HTRUST to discuss provisions in the various loan documents that may be triggered as a result of the completion of the Combination.

1 Source: Tourism Australia Research.
2 Source: Korea Tourism Organisation.
3 Source: Singapore Tourism Board.