Global Net Lease(GNL) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q1 2022, adjusted EBITDA increased to $75.7 million from$ 68.1 million in Q1 2021 [15] - Revenue rose by 8.7% to $97.1 million, up from$ 89.4 million [15] - Net income attributable to common stockholders was $5.5 million [15] - Cash NOI for the first quarter increased by over 7% to$ 87.2 million, and AFFO increased by over 9% to $44.3 million [8] Business Line Data and Key Metrics Changes - The portfolio's occupancy rate was 98.7% with 100% rent collection [6] - The weighted average remaining lease term increased to 8.4 years, with 70% of leases expiring after 2026 [10][11] - The portfolio is now comprised of 55% industrial and distribution assets, up from 46% a year ago [12] Market Data and Key Metrics Changes - The company has a diversified portfolio with 137 tenants across 50 industries, with no single industry exceeding 12% of total annual straight-line rent [11] - 94% of leases feature annual rental increases, with 59% fixed rate and 28% linked to the consumer price index [11] Company Strategy and Development Direction - The company is focusing on increasing its portfolio concentration in industrial and distribution assets while evaluating strategic disposition opportunities [6][14] - The acquisitions pipeline totals$ 111.9 million, with a focus on high-quality properties [13] - The company aims to generate superior risk-adjusted returns through domestic and international sale-leaseback transactions [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding acquisitions despite rising interest rates, focusing on high-quality properties [25] - There has been no negative impact from geopolitical issues in Eastern Europe on Western European tenants, with 100% rent collection maintained [28][29] - The company is proactive in lease renewals and expects continued success in this area [31] Other Important Information - The company ended the quarter with net debt of $2.3 billion at a weighted average interest rate of 3.4% [16] - Liquidity was approximately$ 225.9 million, with $41.6 million distributed in dividends to common shareholders [18] Q&A Session Summary Question: Impact of capital market conditions on acquisition appetite - Management remains cautiously optimistic and focuses on acquiring high-quality properties at accretive prices [25] Question: Criteria for potential dispositions - The company reviews its portfolio regularly and has not publicly listed any properties for sale, but remains proactive in maintaining portfolio quality [26][27] Question: Impact of geopolitical issues on Western European tenants - There has been no adverse effect on rent collection or tenant relations due to geopolitical tensions [28][29] Question: Leasing activity and tenant renewals - The company is proactive in lease renewals and has been successful in negotiating early renewals with tenants [31] Question: Price trends and acquisition yields - Rising interest rates are beginning to affect cap rates, with a trend towards increased prices and cap rates observed [35][36] Question: Funding investments and leverage outlook - The company has sufficient liquidity and expects to maintain leverage in the low 7s range for net debt to adjusted EBITDA [40]