The Ascott Group reports 8% rise in full-year net profit

The Ascott Group has reported an 8 percent increase in full-year earnings, in line with market forecasts.

Net profit came in at S$177.3 million.

The jump was due to an increase in rental rates as well as higher portfolio gains from asset divestment and revaluation.

The owner-cum-operator of serviced residences said it is looking to further grow its portfolio in the next two years.

The Ascott Group now has 20,618 units worldwide, crossing its 20,000 target in December.

It aims to add another 5,000 more units by 2010 – pushing its portfolio up to 25,000.

Over the past year, Ascott said it saw strong revenue growth, both in new as well as its more established markets.

Chong Kee Hiong, Deputy CEO, Finance and Investment, The Ascott Group, said, “Europe has been a great contributor, contributing about close to 50 percent of our revenue. And the growth has been very good, more than 10 percent in all the regions within Europe. And over than above that, Singapore grew well (with) double digit growth as well as Philippines.”

Net portfolio gains, including revaluation, came in at S$154.6 million.

Net gains from the divestment of properties came in at S$112.8 million, while revaluation gains from the Ascott Residence’s Trust’s properties was S$41.8 million.

Ascott opened nearly 1,500 units in nine properties last year, mostly in China.

It is looking to expand its footprint even more – with an eye on cities attracting strong foreign investment.

Mr Chong said, “What is most important to us is grow in cities where it makes economic sense for us and grow it well. In Asia, we are looking at China, India and Vietnam, In Europe we’re looking at the established cities like Paris, London.”

Ascott on Friday announced that it was pumping in more than S$170 million to grow its presence in Australia.

It is developing Citadines Melbourne on Bourke, a new serviced residence in Melbourne.

CapitaLand – which owns 66.5 percent of Ascott – has announced plans to take the serviced residence operator private.

Ascott plans to release a circular to shareholders later next month after all the details of CapitaLand’s offer comes next week.

For the whole year, Ascott is proposing a dividend of 6 cents per share, which includes a first and final dividend of 1.2 cents and a bonus dividend of 4.8 cents. – CNA/ms

Source : Channel NewsAsia – 25 Jan 2008

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