Welltower Inc Reports Robust Growth in Q4 2023 Earnings
Net Income: $0.15 per diluted share for Q4 and $0.66 for the full year.
Normalized FFO: Increased to $0.96 per diluted share in Q4, up 15.7% year-over-year.
Same Store NOI Growth: Total portfolio SSNOI grew by 12.5% with the SHO portfolio leading at 23.7%.
Investments: Completed $3.0 billion of pro rata gross investments in Q4, totaling $5.9 billion for 2023.
Liquidity: Approximately $6.1 billion available, including $2.1 billion in cash and full capacity under a $4.0 billion credit line.
Debt Management: Improved net debt to Adjusted EBITDA ratio to 5.03x and reduced variable rate debt exposure.
Dividend: Declared a quarterly cash dividend of $0.61 per share, marking the 211th consecutive payout.
On February 13, 2024, Welltower Inc (NYSE:WELL) released its 8-K filing, announcing its financial results for the fourth quarter ended December 31, 2023. The company, a leading real estate investment trust (REIT) specializing in healthcare infrastructure, reported a net income attributable to common stockholders of $0.15 per diluted share and a significant increase in normalized funds from operations (FFO) to $0.96 per diluted share, marking a 15.7% rise from the previous year.
Welltower owns a diversified healthcare portfolio of over 2,000 properties, including senior housing, medical office buildings, and skilled nursing/post-acute care facilities, with a presence in Canada and the United Kingdom. The company's strategic investments and partnerships with top-tier operators have been central to its growth trajectory.
Financial Performance and Strategic Investments
The company's total portfolio same store net operating income (SSNOI) exhibited a robust year-over-year growth of 12.5%, propelled by a 23.7% increase in the Seniors Housing Operating (SHO) portfolio. This growth was attributed to a 9.7% rise in SHO portfolio same store revenue and a 330 basis points improvement in average occupancy. Additionally, the SHO portfolio's SSNOI margin expanded by 290 basis points, driven by strong revenue per occupied room (RevPOR) growth, which significantly outpaced the expense per occupied room (ExpPOR) growth.
Welltower's financial achievements also included the completion of $3.0 billion in pro rata gross investments during the fourth quarter, with $2.8 billion in acquisitions and loan funding and $277 million in development funding. Over the entire year, the company completed $5.9 billion of pro rata gross investments, emphasizing property acquisitions at substantial discounts to replacement cost and highly-structured debt and equity investments with significant downside protection.
Liquidity, Debt Management, and Dividends
Welltower's liquidity position remains strong, with approximately $6.1 billion available, inclusive of $2.1 billion in cash and restricted cash, and full capacity under a $4.0 billion line of credit. The company has made significant strides in debt management, improving its net debt to Adjusted EBITDA ratio to 5.03x from 6.31x the previous year and reducing its share of variable rate debt to 8.7% from 16.0%.
The Board of Directors declared a cash dividend for the quarter ended December 31, 2023, of $0.61 per share, to be paid on March 7, 2024. This dividend represents Welltower's 211th consecutive quarterly cash dividend, underscoring the company's consistent performance and commitment to shareholder returns.
Outlook and Conference Call
Looking ahead, Welltower has introduced its 2024 earnings guidance, projecting net income attributable to common stockholders in the range of $1.21 to $1.37 per diluted share and normalized FFO in the range of $3.94 to $4.10 per diluted share. The company anticipates average blended SSNOI growth of 8.25% to 11.50%, with the Seniors Housing Operating segment expected to grow approximately 15% to 21%.
Welltower will host a conference call on February 14, 2024, to discuss the fourth quarter 2023 results, industry trends, and portfolio performance. The call will provide an opportunity for investors and analysts to gain further insights into the company's strategic direction and operational focus.
In summary, Welltower's Q4 2023 earnings report reflects a strong financial position, strategic investment activity, and a positive outlook for the future. The company's focus on healthcare infrastructure and partnerships with leading operators positions it well for continued growth in the evolving healthcare real estate market.
Explore the complete 8-K earnings release (here) from Welltower Inc for further details.
This article first appeared on GuruFocus.
