MARKHAM, Ontario, Aug. 14, 2019 (GLOBE NEWSWIRE) -- Sienna Senior Living Inc. (“Sienna” or the “Company”) (TSX: SIA) today announced its financial results for the three and six months ended June 30, 2019. The Unaudited Condensed Interim Consolidated Financial Statements and accompanying Management’s Discussion and Analysis are available on the Company’s website at www.siennaliving.ca and on SEDAR at www.sedar.com.
“Our team delivered solid operating results in the second quarter, with the results highlighting the benefits of having a balanced portfolio of high quality retirement and long-term care residences,” said Lois Cormack, President and CEO of Sienna Senior Living. “This quarter, we further strengthened our balance sheet, continued to harmonize our operating and sales platform and generated same property growth. Further, I am pleased to announce that we are increasing the monthly dividend to our shareholders for the second consecutive year, starting with the September payment.”
Financial and Operating Highlights
Solid financial performance
Improved balance sheet
Enhanced operating platform
Dividend increase
Financial and Operating Results:
$000s except occupancy, per share and ratio data | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 |
Retirement Same Property – Average occupancy | 88.4% | 91.6% | 89.7% | 91.8% |
Retirement Acquisitions – Average occupancy | n/a | n/a | 88.4% | n/a |
Retirement – Average total occupancy | 88.4% | 91.6% | 89.4% | 91.8% |
LTC – Average total occupancy | 98.3% | 98.3% | 98.3% | 98.1% |
LTC – Average private occupancy | 98.1% | 98.0% | 98.2% | 98.0% |
Revenue | $165,957 | $162,124 | $329,626 | $307,481 |
Operating expenses | $126,028 | $122,734 | $250,785 | $235,687 |
NOI(2) | $39,929 | $39,390 | $78,841 | $71,794 |
Net income | $2,230 | $3,548 | $2,672 | $4,581 |
Operating Funds from Operations (OFFO)(1)(2)(3) | $23,602 | $24,343 | $44,924 | $42,952 |
Adjusted Funds from Operations (AFFO)(1)(2)((3)4) | $24,428 | $26,137 | $47,811 | $46,911 |
Net income per share, diluted | $0.034 | $0.055 | $0.040 | $0.074 |
OFFO per share, diluted(2)(3) | $0.356 | $0.374 | $0.678 | $0.683 |
AFFO per share, diluted(2)(3)(4) | $0.368 | $0.400 | $0.721 | $0.744 |
Dividends declared per share | $0.230 | $0.225 | $0.459 | $0.450 |
Payout Ratio(5) | 62.5% | 55.6% | 63.7% | 59.4% |
Notes:
2019 Second Quarter Summary
Occupancy decreases in Retirement resulted from a combination of higher resident attrition rates in the portfolio acquired last year and ongoing oversupply in the Ottawa market. Additional factors, including disruption associated with property upgrades, including a renovation at a retirement residence in British Columbia and ongoing harmonization of the retirement platform in all residences, contributed to the year-over-year occupancy decline of 3.2%.
Occupancy in LTC remained high at 98.3%.
NOI increased by 1.4% (or $0.5 million) to $39.9 million in Q2 2019, compared to Q2 2018.
Retirement achieved a 1.6% same property NOI growth in Q2 2019, compared to Q2 2018, largely driven by rental rate increases and lower labour expenses due to lower occupancy.
LTC delivered a 1.2% same property NOI growth in Q2 2019, compared to Q2 2018, predominantly resulting from inflationary funding increases. Average occupancy in LTC remained high at 98.3% in Q2 2019, consistent with Q2 2018.
Revenue increased by 2.4% (or $3.8 million) to $166.0 million in Q2 2019, compared to Q2 2018. The increase was driven by additional funding revenues and inflationary funding increases in LTC, as well as in-place annual rent increases and higher market rates in Retirement.
Operating expenses increased by 2.7% (or $3.3 million) to $126.0 million in Q2 2019, compared to Q2 2018. The increase is mainly due to additional expenses associated with additional funding revenues and inflationary increases in LTC, partially offset by lower labour expenses in Retirement.
The Company generated net income of $2.2 million in Q2 2019, representing a decrease of $1.3 million compared to Q2 2018. The decrease was primarily related to a higher fair value loss on interest rate swap contracts in Q2 2019 and an increase in mark-to-market adjustments on share-based compensation, partially offset by same property NOI contributions, lower transaction costs and lower income taxes.
OFFO decreased by 3.0% (or $0.7 million) to $23.6 million in Q2 2019, compared to Q2 2018. The decrease was primarily related to an increase in mark-to-market adjustments on share-based compensation, partially offset by same property NOI contributions and lower income taxes. Excluding the mark-to-market adjustments, basic and diluted OFFO would be $23.9 million or $0.360/share in Q2 2019. Basic OFFO would be $23.8 million or $0.372/share and diluted OFFO would be $24.1 million or $0.366/share in Q2 2018.
AFFO decreased by 6.5% (or $1.7 million) to $24.4 million in Q2 2019, compared to Q2 2018. The decrease was primarily related to the decrease in OFFO noted above and timing of maintenance capital expenditures.
2019 Six Months Summary
NOI increased by 9.8% (or $7.0 million) to $78.8 million over the comparable prior year period. The increase is driven by same property NOI growth and contributions from acquisitions.
Retirement had a solid operating performance and achieved a 3.8% year-over-year same property NOI growth, largely driven by rental rate increases and lower labour expenses which correlated with the occupancy decline in Retirement of 2.4% to 89.4% over the comparable prior year period.
LTC delivered 2.7% year-over-year same property NOI growth, predominantly resulting from inflationary funding increases. Average occupancy in LTC remained high at 98.3% year-over-year, a 0.2% increase over the comparable prior year period.
Revenue increased by 7.2% (or $22.1 million) to $329.6 million over the comparable prior year period. The increase is mainly due to revenues generated from the 2018 acquisitions, as well as strong same property results from market rate adjustments and annual rate increases in Retirement, and additional funding revenues and inflationary funding increases in LTC.
Operating expenses increased by 6.4% (or $15.1 million) to $250.8 million over the comparable prior year period, which included a tax refund of $1.3 million in Q1 2018. The increase is mainly due to expenses incurred by the 2018 acquisitions and inflationary increases.
The Company generated net income of $2.7 million year-over-year, representing a decrease of $1.9 million over the comparable prior year period. The decrease was primarily related to a higher fair value loss on interest rate swap contracts, incremental interest expense and depreciation and amortization incurred from the 2018 acquisitions and an increase in mark-to-market adjustments on share-based compensation, partially offset by NOI growth, lower transaction costs and lower income taxes.
OFFO increased by 4.6% (or $2.0 million) to $44.9 million over the comparable prior year period. The increase is mainly due to income generated from the 2018 acquisitions, as well as strong organic growth, partially offset by incremental interest expense on the properties acquired in 2018 and an increase in mark-to-market adjustments on share-based compensation. Excluding the mark-to-market adjustments, basic and diluted OFFO for the six months ended June 30, 2019 would be $46.6 million or $0.703/share. Basic OFFO would be $42.3 million or $0.685/share and diluted OFFO would be $42.9 million or $0.672/share for the six months ended June 30, 2018.
AFFO increased by 1.9% (or $0.9 million) to $47.8 million over the comparable prior year period. The increase is mainly related to the increase in OFFO noted above, partially offset by timing of maintenance capital expenditures.
Conference Call
The conference call will be on Thursday, August 15, 2019 at 9:30 a.m. (ET). The toll-free dial-in number for participants is 1-844-543-5234, conference ID: 3039737. A webcast of the call will be accessible via Sienna's website at: www.siennaliving.ca/Investors/Events-Presentations.aspx. The webcast of the call will be available for replay until August 15, 2020 and archived on Sienna's website.
About Sienna Senior Living
Sienna Senior Living Inc. (TSX:SIA) is a leading seniors' living provider with 87 seniors' living residences in key markets in Canada. Sienna offers a full range of seniors' living options, including independent living, assisted living, long-term care, and specialized programs and services. Sienna also provides expert management services. Sienna is committed to national growth, while driving long-term value for shareholders. The Company's approximately 12,000 employees are passionate about helping residents live fully every day, and were the driving force behind Sienna being named one of Canada's Most Admired Corporate Cultures in 2017. For more information, please visit www.siennaliving.ca.
Forward-Looking Statements
Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as "anticipate," "continue," "could," "expect," "may," "will," "estimate," "believe," “goals” or other similar words and include, among other things, statements related to the Company's financial results or strategic plans. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions, including the funding of long-term care/residential care facilities by government entities. Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting the Company's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity and government regulations.
Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of the Company as at the date of this news release and speak only as at the date of this news release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Nitin Jain
Chief Financial Officer & Chief Investment Officer
(905) 489-0787
Nitin.Jain@siennaliving.ca