NexPoint Residential Trust(US:NXRT)2024-04-30 20:04Financial Data and Key Metrics Changes - For Q1 2024, net income was $26.3 million or $1 per diluted share on total revenue of $67.5 million, compared to a net loss of $4 million or $0.15 per diluted share in Q1 2023 on total revenue of $69.2 million [4] - Net operating income (NOI) for Q1 2024 was $41.1 million, unchanged from Q1 2023, despite a decrease in the number of properties from 40 to 37 [4] - Same-store rent decreased by 0.4%, while same-store occupancy increased by 0.3% to 94.7% [4] Business Line Data and Key Metrics Changes - The company completed 59 full and partial upgrades in Q1 2024, achieving an average monthly rent premium of $240 and a 21.8% return on investment [37] - Same-store rental revenue increased by 3.6% for the quarter, with 7 out of 10 markets averaging at least 3% growth [42] - Same-store operating expenses increased by only 1.9% year-over-year, indicating moderation in expense growth [42] Market Data and Key Metrics Changes - Five out of ten markets achieved year-over-year NOI growth of at least 5.9%, with Orlando and South Florida leading at 12.3% and 9.9% growth, respectively [9] - The portfolio registered a 94.6% occupancy rate at the end of Q1, which improved to 94.7% shortly after [43] Company Strategy and Development Direction - The company is focusing on maximizing resident retention and reducing turnover costs while maintaining occupancy [43] - A share buyback program was initiated to purchase up to $25 million of shares, with approximately 8.5 million shares bought at an average price of $31.75, representing a 40% discount to the midpoint of the Q1 NAV estimate [39] - The company remains bullish on its Sunbelt market, expecting to outpace northern and coastal cities in terms of population, job, and wage growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the first quarter's performance, noting better-than-expected absorption and occupancy rates [25] - The company anticipates modest growth in the second half of the year as supply growth begins to decline [12] - Management is cautious about guidance due to concerns over supply impacting portfolio performance, with a full-year guidance range remaining wide [24] Other Important Information - The company reported a first-quarter dividend of $0.46 per share, with a payout ratio of 56.3% [5][38] - As of March 31, 2024, the company had $37.1 million in cash and $335 million of available liquidity on its corporate credit facility [6] Q&A Session Summary Question: What does concession usage look like across the portfolio? - Concession usage in Q1 was about 24 basis points on gross potential rent, more prevalent in high supply markets [21] Question: Can you discuss the guidance for same-store NOI? - The company is cautious about guidance due to anticipated declines in GPR and is monitoring the market closely [24][25] Question: How far along are you with the various upgrade opportunities within the portfolio? - Approximately 5,000 to 5,500 units remain for upgrades, providing about 1.5 to 2 years of internal growth potential [49] Question: What drove the interest line item to decrease significantly? - Management indicated that fluctuations in interest rates and the impact of swaps contributed to the changes in the interest line item [57]