Sabra(US:SBRA)2024-11-01 20:04Financial Data and Key Metrics Changes - The company reported normalized FFO per share of $0.35 and normalized AFFO per share of $0.37, reflecting a year-over-year growth of 9% [20] - Cash rental income from the triple-net portfolio totaled $91.8 million, exceeding the previous quarterly run rate of $90 million [21] - The net debt to adjusted EBITDA ratio decreased to 5.3 times, indicating improved leverage [25] Business Line Data and Key Metrics Changes - Occupancy for the skilled nursing facility (SNF) portfolio increased by 130 basis points sequentially, with EBITDARM rent coverage at 1.94x [8][9] - The same store managed senior housing portfolio saw a revenue growth of 7.6% year-over-year, with cash NOI increasing by 17.8% [15][16] - The behavioral health category's coverage and occupancy remained flat, indicating stabilization [10] Market Data and Key Metrics Changes - The company noted a strong performance in Canadian communities, with cash NOI growth of 24.8% year-over-year [16] - The overall investment pipeline is seeing more activity, particularly in high-quality, well-performing assets [11] Company Strategy and Development Direction - The company is focused on high-quality investments with good yields and is not pursuing larger portfolio deals that require significant work [11][12] - There is a commitment to being selective in acquisitions, particularly in skilled nursing and senior housing, while avoiding complex deals that could introduce operational noise [39][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued improvement across primary asset classes, distancing from pandemic impacts [7] - The outlook for occupancy and revenue growth remains positive, with expectations of sustained operating leverage contributing to cash NOI growth [18][72] Other Important Information - The company declared a quarterly cash dividend of $0.30 per share, representing a payout of 81% of the third quarter normalized AFFO per share [27] - The company has ample liquidity of $947.8 million, consisting of cash and available borrowings [26] Q&A Session Summary Question: Will there be additional segment guidance for 2025? - Management indicated it is too early to discuss 2025 guidance and will address it in the fourth quarter earnings release [29] Question: What do credit rating agencies want to see for future upgrades? - Agencies focus on leverage levels and debt service coverage, with a positive outlook from Moody's being a significant step [30] Question: How did the SHOP segment perform this quarter? - The performance was in line with expectations, with mid- to high-teens growth anticipated for the fourth quarter [34] Question: What is the current acquisition landscape? - The company is seeing robust opportunities, particularly in senior housing, but remains selective due to high-quality asset requirements [36][39] Question: What are the expectations for REVPOR trends? - Management expects mid-single-digit growth for REVPOR, with no operators indicating higher than that unless turning around under-managed buildings [50] Question: What is the outlook for occupancy in the SNF portfolio? - The increase in occupancy is attributed to improved labor availability, with expectations for continued upward trends [57][58] Question: What is the current lending environment? - There is renewed interest from lenders, but pricing remains a concern, particularly with Fannie Mae's current situation [60] Question: What are the thoughts on regulatory changes? - Management believes minimum staffing mandates will eventually be reconsidered, emphasizing the need for rational decision-making in regulations [88][89]