As one of the last companies in our sector to report second quarter earnings results, the wait was worth it. Sonida Senior Living continues to deliver results that top its peers and puts them in an increasingly better position to grow.
Where do we start? Perhaps the most impressive stat was the sequential increase in same-community NOI margin. The second quarter’s margin jumped by 360 basis points in one quarter, to 28.2%, and this was on just a 30-basis point increase in occupancy to 86.2%. It jumped by 440 basis points year over year. That occupancy level is above the national average, and way above what Brookdale Senior Living has reported, and above the SHOP census of both Welltower and Ventas. And these two REITs have been reporting some pretty good numbers of late.
Year-over-year RevPOR increased by 8.4% to $4,263, and the sequential increase was a solid 3.0%. That will drive a good portion of increased margin, not to mention raw profits. Although we don’t like this stat (somewhat meaningless), same-community RevPAR increased by 11.3% year over year.
On the balance sheet side of things, the company has a $28.7 million loan outstanding on two communities in Texas, with maturities of April 2025 and October 2031. Management negotiated a loan modification agreement, revising the maturity dates to December 2025 for both of them, but with the option to make a discounted payoff of $18.5 million by November 1, 2024. That represents a 36% discount if paid off 14 months before the new due date. That seems to be a no-brainer to us. The company has also been raising equity in small chunks through its at-the-market (ATM) sales agreement.
While all this news did not move the share price in an otherwise negative day for the market, the high return over the past two years makes up for it, and we don’t hear shareholders complaining.
