Sabra Health Care REIT Inc (SBRA) Q2 2024 Earnings Call Highlights: Strong NOI Growth and ...

GuruFocus News
4 min read

In This Article:

  • Shop Cash NOI Growth: 17.7% increase.

  • Medicaid Rate Increase: Estimated at roughly 7%, 200 basis points higher than last year.

  • Medicare Market Basket Increase: Finalized at 4.2%.

  • Normalized FFO per Share: $0.35, up $0.01 from the first quarter.

  • Normalized AFFO per Share: $0.36, up $0.01 from the first quarter.

  • Net Debt to Adjusted EBITDA Ratio: 5.45x as of June 30, 2024.

  • Liquidity: $906 million, consisting of $36 million in unrestricted cash and $870 million in available borrowings.

  • Quarterly Cash Dividend: $0.30 per share, representing 83% payout of second-quarter normalized AFFO per share.

  • Same-Store Portfolio Revenue Growth: 6.8% year over year.

  • Canadian Communities Cash NOI Growth: 23.9% year over year.

  • RevPOR Increase: 3.1% year over year.

  • Net Income Guidance: $0.48 to $0.51 per share for full-year 2024.

  • FFO Guidance: $1.33 to $1.36 per share for full-year 2024.

  • Normalized FFO Guidance: $1.36 to $1.39 per share for full-year 2024.

  • Adjusted FFO Guidance: $1.39 to $1.42 per share for full-year 2024.

  • Normalized Adjusted FFO Guidance: $1.41 to $1.44 per share for full-year 2024.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Sabra Health Care REIT Inc (NASDAQ:SBRA) reported a 17.7% growth in shop cash NOI, indicating strong operational performance.

  • Senior housing and skilled nursing occupancy increased, with EBITDARM rent coverage improving for both asset classes.

  • The company announced approximately $136 million in new investments, showcasing active growth and expansion efforts.

  • Medicaid rate increases are estimated to be roughly 7%, with the top 5 SNF tenants experiencing a 10.6% increase, enhancing revenue potential.

  • Labor costs, including contract labor, are at their lowest level since March 2021, with agency costs down 50% from a year ago, improving cost efficiency.

Negative Points

  • Behavioral segment rent coverage was down, indicating volatility and unpredictability in this business line.

  • Cash G&A expenses increased by $2 million due to performance-based compensation adjustments, impacting overall cost structure.

  • Cash interest expense rose by $900,000 due to higher borrowings under the revolving credit facility, affecting financial leverage.

  • The company recognized $900,000 of non-recurring business interruption insurance income last quarter, which did not recur this quarter.

  • The investment impact on 2024 earnings is muted, with most benefits expected in 2025, delaying immediate financial gains.

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