National HealthCare Corp., CareTrust REIT and Ventas presented second-quarter earnings results on Friday.
National HealthCare Corp. reports 4.1% increase in net operating revenues, grant income
National HealthCare Corp. reported a 4.1% year-over-year increase in net operating revenues and grant income for the second quarter — $282.6 million compared with $271.3 million a year ago.
Excluding data related to government stimulus income and the seven skilled nursing facilities in Massachusetts and New Hampshire in which the Murfreesboro, TN-based company ceased operation in September, same-facility net operating revenues increased 11.5% during the second quarter compared with the same period a year ago.
Net income was $16.3 million, compared with $3.2 million for the same period last year. Excluding the unrealized gains or losses in the marketable equity securities portfolio and other adjustments, adjusted net income for the quarter was $13.6 million, compared with $7.2 million for the same period in 2022.
“The increase in non-GAAP [Generally Accepted Accounting Principles ] earnings for the quarter ended June 30, 2023, compared to the second quarter of 2022, was primarily due to the continued occupancy increase in our skilled nursing and assisted living facilities, skilled nursing per diem increases from some of our government payors, and the continued reduction of nurse agency staffing expense within our operations,” NHC, which does not hold earnings calls, said in a press release.
The company also announced Friday that it will pay a quarterly dividend of $0.57 per common share to shareholders of record on Sept. 29. It will be payable Nov. 1.
CareTrust REIT sees ‘positive momentum’
“Q2 saw continued positive momentum on many fronts — investments, operator relationships, the existing portfolio and equity issuance,” President and CEO Dave Sedgwick said Friday.
The San Clemente, CA-based real estate investment trust invested almost $200 million in eight transactions with six operators.
“We have announced new investments every month since March, and yet we sit here today with ample dry powder to continue to grow the portfolio,” Sedgwick stated in a press release issued in conjunction with Friday’s call. “The investment pipeline today is roughly $150 million and is composed mostly of skilled nursing acquisitions.”
In the second quarter, CareTrust reported a net loss of $0.5 million, or $0.01 per diluted weighted-average common share, normalized funds from operations of $34.6 million, or $0.35 per diluted weighted-average common share, and normalized funds available for distribution of $36.1 million, or $0.36 per diluted weighted-average common share, Chief Financial Officer Bill Wagner reported..
According to Wagner, the REIT collected 96.7% of contractual rents in the quarter. Rental income was $47.7 million, compared with $46.2 million in the first quarter.
The increase of $1.6 million is due largely to $1.1 million from new investments, approximately $369,000 in Consumer Price Index bonds and tenant reimbursements, he said.
CareTrust declared a quarterly dividend of $0.28 per common share during the quarter. On an annualized basis, the payout ratio was approximately 80% based on second quarter normalized FFO, and 78% based on normalized FAD.
Ventas: ‘Outsized performance in US assisted living’
Chicago-based Ventas’ senior housing operating portfolio, or SHOP, communities “led the way as we continue to benefit from the multiyear growth and recovery cycle underway in senior housing,” Chairman and CEO Debra A. Cafaro said Friday on the real estate investment trust’s earnings call.
SHOP same-store cash net operating income grew by 14% in the second quarter, driven by revenue per occupied room growth.
Ventas’ second quarter earnings were led by “outsized performance in US assisted living,” Cafaro said in a press release.
The REIT’s US senior living communities posted net operating income growth of 18.5% year over year, with assisted living seeing 32.2% year-over-year NOI growth “driven by occupancy gains with more upside opportunity,” according to a presentation released in conjunction with Friday’s call.
The second quarter saw strong pricing in the SHOP portfolio, Ventas said, with same-store revenue per occupied room at 6.6%, led by the United States which saw 7.4% RevPOR growth.
May 1, Ventas took ownership of the properties that had secured its mezzanine loan to Santerre Health Investors by converting the outstanding principal amount of the loan to equity, with no additional consideration being paid. The portfolio, according to the REIT, includes 48 skilled nursing facilities and hospitals, representing almost 40% of the Santerre portfolio’s net operating income; 16 large-scale SHOP communities, accounting for almost 20% of NOI; and 88 medical office buildings.
Cafaro said that the REIT has increased expectations for annualized NOI from the portfolio to $404 million from approximately $93 million.
“This improved outlook is the result of our intense focus, our team’s experience and financing capabilities, certain positive operating trends and strong early returns,” she said.
For additional coverage of the Ventas earnings call, see McKnight’s Senior Living.