UMH Properties(US:UMH)2024-08-07 18:45Financial Data and Key Metrics Changes - Normalized FFO per share for Q2 2024 was $0.23, up from $0.21 in Q2 2023, representing a 10% increase [5][17] - Sequentially, normalized FFO increased from $0.22 in Q1 2024 to $0.23 in Q2 2024, a 5% increase [6][17] - Rental and related income for Q2 2024 was $51.5 million, compared to $47.1 million a year ago, a 9% increase [18] - Community NOI increased from $27.9 million in Q2 2023 to $30.9 million in Q2 2024, an 11% increase [18] Business Line Data and Key Metrics Changes - Overall occupancy increased by 64 units to 87% during the quarter, with year-over-year occupancy up by 430 units or 195 basis points [7] - Same property income increased by 9% year-over-year, while expenses grew by 6%, resulting in an 11% increase in same property NOI [8] - The company sold 105 homes during the quarter, generating approximately $8.8 million in gross home sales revenue, a 7% increase from the previous year [9] Market Data and Key Metrics Changes - The rental home occupancy rate improved to 95% compared to 94% last year [10] - The company financed approximately 66% of home sales, with a 2% repossession rate on an annual basis [9] Company Strategy and Development Direction - The company aims to fill its 3,300 vacant sites and develop its expansion land over the next five years, which is expected to significantly increase profitability [25] - UMH is focused on addressing the affordable housing crisis by innovating housing solutions, including the development of duplex units [24] - The company is on track to add approximately 300 expansion sites this year, with significant investments in capital improvements [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued earnings growth, citing strong demand for home sales and rentals [6][15] - The company is well-positioned to capitalize on the current housing shortage, which is estimated at 4 million units [24][49] - Management anticipates increased sales and profits due to expansions in favorable locations [34] Other Important Information - The company has a strong balance sheet with a net debt-to-total market capitalization of less than 30% [16] - UMH has initiated guidance for the remainder of 2024, projecting normalized FFO in a range of $0.91 to $0.95 per diluted share [23] Q&A Session Summary Question: Can you provide a rough range of how much of the $110 million to $120 million capital needs will be from refinancing? - Management expects approximately 50% debt to equity in their internal expansion plan, estimating $110 million to $140 million of internal investments [27] Question: Will there be non-refinancing of mortgages in 2024? - Management confirmed that refinancing will not start until 2025 [28] Question: How do home sales impact rental pace? - Management clarified that they are always adding rental homes while selling older homes, impacting the net increase in rental units [30] Question: What is the expected same store NOI growth trajectory for the second half of 2024? - Management expects high double-digit and likely low double-digit same property NOI growth, assuming continued demand and rent increases [33] Question: How are interest rates affecting the acquisition market? - Management believes higher interest rates may lead to more sellers in the market, which could benefit the company [40][41] Question: What is the potential size of the Vineland, New Jersey joint venture? - Management hopes for 150 lots, potentially generating $30 million for UMH if all goes as planned [47][49]