Omega Healthcare Investors’ first-quarter financial performance resulted in “higher-than-expected interest income as well as earlier-than-anticipated cash payments received related to a turnaround asset,” CEO Taylor Pickett stated in a press release issued in conjunction with Friday’s first-quarter earnings call.
Additionally, he said, operating fundamentals are improving. Both occupancy and agency labor usage are trending favorably, according to the Hunt Valley, MD-based real estate investment trust
Omega has completed $240 million in new investments so far this year. In the first quarter alone, the REIT completed $75 million in new investments, including $41 million in real estate loans, $21 million in capital renovation and construction projects and $13 million in real estate acquisitions.
The company repaid $42 million in HUD mortgage loans related to expected facility transitions and sold four facilities for $10 million in cash proceeds. Additionally, Omega repaid $400 million of senior unsecured notes on April 1.
Revenues for the first quarter totaled $243.3 million, for an increase of $25.1 million over the same period in 2023.
“The increase primarily resulted from (i) the timing and impact of operator restructurings and transitions and (ii) revenue from new investments completed throughout 2023 and 2024,” the company reported. “The increase was partially offset by a decrease in revenue from asset sales completed throughout 2023 and 2024.”
Expenses for the first quarter totaled $174.1 million, a decrease of $25.8 million over the same period in 2023.
Net income for the first quarter was $69 million, or $0.27 per common share, compared with $37 million, or $0.15 per common share, for the first quarter of 2023.
“The decrease primarily resulted from (i) a decrease in impairment on real estate properties, (ii) a decrease in depreciation and amortization expense and (iii) a decrease in interest expense, partially offset by (i) an increase in provision (recovery) for credit losses, (ii) an increase in acquisition, merger and transition related costs and (iii) an increase in stock-based compensation expense,” the company said.
Nareit funds from operations came to $153 million, or $0.60 per common share, on 257 million weighted-average common shares outstanding. During the first quarter of 2023, by comparison, Nareit FFO were $146 million, or $0.60 per common share, on 243 million weighted-average common shares outstanding.
Adjusted funds from operations were $176 million, or $0.68 per common share, compared with $160 million, or $0.66 per common share, for the same quarter in 2023.
Funds available for distribution for the quarter were $168 million, or $0.65 per common share, compared with FAD of $147 million, or $0.60 per common share, for the first quarter of 2023.
For additional coverage of the earnings call, see McKnight’s Senior Living.
