Alexander & Baldwin(US:ALEX)2024-04-25 23:53Financial Data and Key Metrics Changes - Total NOI growth was 4.4%, with same-store NOI growth of 4.1% and 3.9% when excluding collections of previously reserved amounts [8] - Net income available to shareholders was $20 million or $0.28 per diluted share, compared to $18.6 million or $0.26 per diluted share in the same quarter last year [12] - FFO was $29.2 million or $0.40 per diluted share, an increase from $18.6 million or $0.26 per diluted share in Q1 2023 [12][13] - G&A expenses decreased by $1.5 million or 17.1% to $7.2 million compared to $8.7 million in Q1 2023 [14] Business Line Data and Key Metrics Changes - In the Land Operations segment, over 300 acres of land were sold, generating nearly $7.9 million in operating profit, compared to an operating loss of $92,000 in the same period last year [9] - The company executed 44 leases in its improved property portfolio for approximately 212,000 square feet, achieving blended spreads of 7.8% [8] Market Data and Key Metrics Changes - Unemployment in Hawaii was 3.1% at the end of February, lower than the national average of 3.9% [11] - Visitor arrivals in Hawaii were flat at 1.5 million in the first two months of 2024 compared to 2023, with arrivals from Japan more than 80% higher than the same period in 2023 [11] Company Strategy and Development Direction - The company plans to continue prioritizing the sale of non-core assets and is raising its guidance for 2024 based on strong Q1 results [9][17] - The company is focusing on internal growth initiatives and is encouraged by external investment opportunities being underwritten [20] Management's Comments on Operating Environment and Future Outlook - Management indicated that the economic environment remains favorable, with expectations for retail and industrial assets to perform consistently [17][33] - The company expects same-store NOI growth to be slightly negative in the second quarter of 2024 due to prior year rent step-ups and tenant move-outs [18][42] Other Important Information - The company is transitioning from reporting core FFO to AFFO, which was $25.5 million or $0.35 per diluted share for Q1 2024, compared to $16 million or $0.22 per diluted share in the same period last year [13] - Total debt outstanding was $458 million, with total liquidity of $470 million [15] Q&A Session Summary Question: How much was the FFO from land sales in the first quarter? - The $0.11 in revised guidance reflects the actual impact of first-quarter performance [22] Question: What are the plans for the space vacated at Waianae Mall? - Discussions are ongoing for a backfill with a high credit tenant, and the company is optimistic about finalizing a deal [25] Question: How do you view the balance of industrial and retail property types? - The company sees favorable market conditions across all asset classes and is agnostic regarding capital allocation between different property types [33] Question: What is the expected impact of the land sales on overhead expenses? - The land sales are expected to eliminate a few hundred thousand dollars in carrying costs as part of the simplification process [39] Question: What is the company's long-term target for leverage? - The long-term target for net debt-to-EBITDA is 5 to 6 times, and the company is currently in good shape from a balance sheet perspective [54]