On August 7, 2024, Sabra Health Care REIT Inc (SBRA, Financial) released its 8-K filing for the second quarter of 2024. Sabra Health Care REIT Inc is a healthcare facility real estate investment trust. The company operates one segment that owns and invests in healthcare real estate. All of the company's revenue is generated in the United States. Sabra's operations consist of nursing facilities, assisted living centers, and mental health facilities.
Performance Overview
Sabra Health Care REIT Inc (SBRA, Financial) reported net income of $0.10 per diluted common share for Q2 2024, falling short of the analyst estimate of $0.15. However, the company exceeded revenue expectations, posting $176.14 million compared to the estimated $167.87 million. The company also reported Funds From Operations (FFO) of $0.35 per share and Adjusted Funds From Operations (AFFO) of $0.36 per share.
Key Financial Achievements
Sabra Health Care REIT Inc (SBRA, Financial) achieved significant financial milestones in Q2 2024:
- Same store managed senior housing Cash NOI increased by 17.7% year-over-year.
- Investment activity through June 30, 2024, amounted to $60.1 million at an expected initial cash yield of 8.7%.
- Closed on the $75.8 million acquisition of two managed senior housing communities operated by the Leo Brown Group, with an initial expected cash yield of 8.0%.
- Disposed of eight properties for gross proceeds of $41.6 million with trailing-twelve-month cash yields ranging from 4.0% to 5.0%.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $176.14 million | $161.17 million |
| Net Income | $23.98 million | $21.19 million |
| Net Income per Diluted Share | $0.10 | $0.09 |
Balance Sheet and Cash Flow
As of June 30, 2024, Sabra Health Care REIT Inc (SBRA, Financial) reported total assets of $5.35 billion, slightly down from $5.39 billion as of December 31, 2023. The company had approximately $906.0 million of liquidity, consisting of unrestricted cash and cash equivalents of $36.4 million and available borrowings of $869.6 million under its revolving credit facility.
Commentary and Analysis
"Sabra’s portfolio has continued to gain momentum as the year has progressed. Skilled nursing margins and rent coverage are higher than pre-pandemic levels, with the potential for further gains as occupancy continues to recover. Medicaid rate increases are anticipated to be approximately 200 basis points higher than last year’s above-average rate increases as inflation continues to be captured. Growth in the managed senior housing portfolio has accelerated, leverage has ticked down, and we are pleased to be in a position to increase guidance. Lastly, our pipeline continues to improve as evidenced by our announced investment activity. We expect to remain active as the year progresses in all our asset classes as opportunities arise." - Rick Matros, CEO and Chair.
Guidance and Future Outlook
Sabra Health Care REIT Inc (SBRA, Financial) has increased its 2024 earnings guidance ranges as follows:
- Net Income: $0.48 - $0.51 per diluted common share
- FFO: $1.33 - $1.36 per diluted common share
- Normalized FFO: $1.36 - $1.39 per diluted common share
- AFFO: $1.39 - $1.42 per diluted common share
- Normalized AFFO: $1.41 - $1.44 per diluted common share
Overall, Sabra Health Care REIT Inc (SBRA, Financial) demonstrated strong revenue growth and strategic investment activities, although it faced challenges in meeting earnings per share estimates. The company's increased guidance reflects confidence in its operational momentum and future prospects.
Explore the complete 8-K earnings release (here) from Sabra Health Care REIT Inc for further details.
