CAPE TOWN - Hospitality Property Fund, which owns 54 hotel and resort properties in South Africa valued at R10 billion, said on Thursday that its board had decided not to declare a dividend for the six months to March 31, the company’s year end.
Shareholders had received an interim dividend of 35.40 cents in December 2019. This dividend, however, was well down from the 105.39 cents per share declared for the 12 months ended March 31, 2019.
The group said in a trading statement on Thursday that due to the impact of the Covid-19 pandemic and effect on the economy, all capital expenditure had been placed on hold, with the exception of essential maintenance.
Various cost savings measures had been implemented and the group would continue to conserve cash resources.
Hospitality’s annual results were expected to be published on May 29.
The value of the properties was R2.2bn lower than the R12.2bn value as at March 31, 2019.
Higher exit bond yields and higher discount rates across the portfolio resulted in a negative fair value adjustment of R2.5bn on the fair value of the fund’s property portfolio, after capex at March 31, 2020.
Rental income forecasts for the 2021 and 2022 financial year had been reduced due to the uncertainty of future trading conditions, due to the impact of Covid-19 on the hospitality industry.
The group said measures imposed by the government to minimize the spread of Covid-19 would continue to have a significantly negative economic impact on the hospitality industry and all other business sectors.
The share price was unchanged at R2.80 on the JSE on Thursday morning.