Sabra(US:SBRA)2021-05-06 22:41Financial Data and Key Metrics Changes - For Q1 2021, total revenues were $152.4 million, rental revenues were $113.4 million, and NOI was $121.3 million, showing slight increases from Q4 2020 [48] - FFO for the quarter was $82.4 million, normalized FFO was $85.5 million or $0.40 per share, compared to normalized FFO of $88.4 million or $0.42 per share in Q4 2020 [50] - AFFO was $82.8 million, normalized AFFO was $83.2 million or $0.39 per share, down from normalized AFFO of $86.9 million or $0.41 per share in Q4 2020 [51] Business Line Data and Key Metrics Changes - Senior housing managed portfolio occupancy was 73.1% in Q1 2021, down from 76.4% in the prior quarter, with REVPOR declining by 1.7% to $3,718 [33] - Cash net operating income for the senior housing managed portfolio declined 33.4% sequentially, and margin decreased by 6% compared to the prior quarter [34] - The skilled operators, comprising 66% of NOI, saw occupancy increase by approximately 431 basis points since their low point in December [25] Market Data and Key Metrics Changes - Over 90% of facilities reported no positive COVID-19 cases, and over 90% of tenants reported over 90% vaccination uptake for patients and residents [12][13] - The occupancy in the wholly owned portfolio improved from a low in mid-March to 75.9% by the end of April [36] - The Enlivant joint venture saw gross move-ins in March at the highest level in 18 months, indicating a backlog of interest in senior housing [38] Company Strategy and Development Direction - The company is focusing on recovery from the pandemic, with a strong emphasis on improving occupancy as a key driver for economic recovery in senior housing [32] - There is a $1.5 billion investment pipeline primarily in senior housing, with a focus on behavioral addiction and substance activity [24] - The company plans to maintain leverage below 5.5 times and expects to close investments totaling $86 million with a weighted average initial cash yield of 9% [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery, noting that operators are speaking with an upbeat tone and occupancy is beginning to improve [12][32] - The company is cautious in its Q2 guidance due to ongoing uncertainties related to COVID-19, expecting net income of $0.13 to $0.14 per share and FFO of $0.38 to $0.39 per share [58] - Management highlighted the importance of the successful vaccine distribution as a linchpin for the turnaround in senior housing [33] Other Important Information - The company collected 99.9% of forecasted rents from February 2020 through April 2021, indicating strong rent collection performance [45] - The Board of Directors declared a quarterly cash dividend of $0.30 per share, representing a payout of approximately 77% on AFFO and normalized AFFO per share [57] - The company has over $1 billion in cash and availability on its line, positioning it well for acquisition opportunities [53] Q&A Session Summary Question: Any one-time numbers to the positive in Q1? - Management confirmed there were no one-time items affecting the results, emphasizing pure operating results [63] Question: Change in SNF portfolio occupancy year-to-date? - Management stated they do not have a reconciled number for total SNF portfolio occupancy but noted positive trends among top operators [67] Question: Any operators on the watch list? - Management indicated stability in the watch list and no material concerns with operators, highlighting one operator's exit due to personal stress rather than operational issues [68][69] Question: Concerns regarding revenue and expense visibility? - Management expressed cautious optimism, noting that while occupancy is improving, they remain vigilant about cash collections and potential volatility [90][92] Question: Opportunities in behavioral health hospital acquisitions? - Management reported increased deal flow in the behavioral health sector, particularly in addiction treatment, indicating a rapidly evolving market [97] Question: Challenges in managing the Alaska property? - Management acknowledged potential challenges but noted that asset managers are willing to travel for oversight, and there may be opportunities for expansion [99]