Q2 2024 Community Healthcare Trust Inc Earnings Call Transcript
Key Points
- Community Healthcare Trust Inc (CHCT) reported a slight increase in occupancy from 92.3% to 92.6% during the quarter, indicating positive leasing activity.
- The company acquired an inpatient rehabilitation facility for $23.5 million with an anticipated annual return of approximately 9.1%, and a medical office building for $6.2 million with expected returns of approximately 9.3%.
- CHCT has signed definitive purchase and sale agreements for seven properties with an aggregate expected investment of $169.5 million, with expected returns ranging from 9.1% to 9.75%.
- The company declared a dividend for the second quarter and raised it to $0.4625 per common share, marking a continued trend of increasing dividends every quarter since the IPO.
- CHCT maintains modest leverage levels and anticipates having enough availability on credit facilities and through banking relationships to fund acquisitions, with plans to strategically access equity markets at favorable share prices.
- CHCT faced financial challenges due to a geriatric inpatient psychiatric hospital tenant, resulting in a $3.2 million reduction in total revenue for the second quarter.
- The company recorded an $11 million credit loss reserve on the $22.7 million notes receivable from the tenant, impacting net income.
- Funds from operations (FFO) decreased from $14 million in the first quarter of 2024 to $11.6 million in the second quarter, with a decline in FFO per diluted common share from $0.53 to $0.43.
- Adjusted funds from operations (AFFO) also decreased from $15.7 million in the first quarter to $14.3 million in the second quarter, with a decline in AFFO per diluted common share from $0.59 to $0.53.
- The tenant in question has been experiencing management changes, leading to a decline in census and staff turnover, impacting their ability to consistently pay rent and interest.
Welcome to the Community Healthcare Trust's 2024 second quarter earnings release conference call. On the call today, the company will discuss its 2024 second quarter financial results. It will also discuss progress made in various aspects of its business.
(Operator Instructions) The company's earnings release was distributed last evening and has also been posted on its website, www.chct.reit.
The company wants to emphasize that some of the information that may be discussed on this call will be based on information as of today, July 31, 2024, and may contain forward-looking statements that involve risk and uncertainty.
Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the company's disclosures regarding forward-looking statements in its earnings release as well as its risk factors and MD&A in its SEC filings. The company undertakes no obligation to update forward-looking statements whether as a result of new
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