Q2 2024 Omega Healthcare Investors Inc Earnings Call Transcript
Key Points
- Second-quarter FAD of $0.68 per share exceeded expectations and is projected to improve further.
- Dividend payout ratio has dropped below 100% and is expected to continue decreasing.
- AFFO guidance for 2024 has been increased to a range of $2.78 to $2.84 per share.
- Successful acquisition of the remaining 51% joint venture interest in 63 UK facilities, now fully owned by Omega Healthcare Investors Inc (OHI).
- Occupancy for the core portfolio has increased from 74.6% in January 2022 to 80.8% as of mid-July 2024.
- The interest rate on the assumed debt from the UK acquisition is significantly above market rates at 10.38%.
- LaVie filed for Chapter 11 bankruptcy protection, indicating financial instability among some operators.
- The staffing mandate finalized in April poses challenges for facilities to meet requirements, with ongoing lawsuits to overturn it.
- Revenue increase for the second quarter was modest, from $250 million in Q2 2023 to $253 million in Q2 2024.
- The Guardian portfolio required a transition to a new operator due to non-payment in Q1, indicating operational challenges.
Greetings, and welcome to the Omega Healthcare Investors second-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to Michele Reber. Thank you. You may begin.
Thank you, and good morning. With me today is Omega's CEO, Taylor Pickett; COO, Dan Booth; CFO, Bob Stephenson; and Megan Krull, Senior Vice President of Operations.
Comments made during this conference call that are not historical facts may be forward-looking statements, such as statements regarding our financial projections, potential transactions, operator prospects, and outlook generally. Factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company's filings with the SEC.
During the call today, we will refer to some non-GAAP financial measures, such as Nareit FFO, adjusted FFO, FAD, and EBITDA. Reconciliations of these non
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