On July 24, 2024, Universal Health Realty Income Trust (UHT, Financial) released its 8-K filing for the second quarter of 2024. Universal Health Realty Income Trust is a healthcare REIT engaged in investing in and leasing healthcare and human service facilities across the United States.
Performance Overview
For the three-month period ended June 30, 2024, UHT reported a net income of $5.3 million, or $0.38 per diluted share, compared to $3.5 million, or $0.25 per diluted share, in the same period of 2023. This represents a notable increase of $1.8 million, or $0.13 per diluted share.
The increase in net income was primarily driven by a reduction in expenses related to a property in Chicago, Illinois, and an increase in income generated from various properties. However, these gains were partially offset by a rise in interest expenses due to higher average borrowing rates and outstanding borrowings.
Financial Achievements
UHT's funds from operations (FFO) for Q2 2024 were $12.4 million, or $0.90 per diluted share, up from $10.6 million, or $0.77 per diluted share, in Q2 2023. This increase in FFO is significant as it highlights the company's improved operational performance and its ability to generate cash flow from its properties.
Income Statement Highlights
| Three Months Ended | June 30, 2024 | June 30, 2023 |
|---|---|---|
| Lease revenue - UHS facilities | $8,454 | $8,236 |
| Lease revenue - Non-related parties | $14,359 | $13,668 |
| Net income | $5,276 | $3,476 |
| Basic earnings per share | $0.38 | $0.25 |
| Diluted earnings per share | $0.38 | $0.25 |
Balance Sheet and Cash Flow
As of June 30, 2024, UHT had $342.9 million of borrowings outstanding under its $375 million revolving credit agreement, with $32.1 million of available borrowing capacity. This financial flexibility is crucial for the company to manage its operations and invest in new opportunities.
Dividend Information
UHT declared a second-quarter dividend of $0.73 per share, amounting to $10.1 million in total, which was paid on June 28, 2024. This consistent dividend payout underscores the company's commitment to returning value to its shareholders.
Key Developments
In March 2023, UHT completed the construction of Sierra Medical Plaza I, an 86,000 square foot medical office building in Reno, Nevada. The building is leased under a ten-year agreement, generating an initial minimum rent of $1.3 million annually.
Analysis and Outlook
Universal Health Realty Income Trust's strong financial performance in Q2 2024, marked by significant increases in net income and FFO, reflects its effective management and strategic investments. However, the rise in interest expenses poses a challenge that the company needs to address to sustain its growth trajectory.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Universal Health Realty Income Trust for further details.
