MARKHAM, Ontario, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Sienna Senior Living Inc. (“Sienna” or the “Company”) (TSX: SIA) today provided an update on its operations and announced its financial results for the three and six months ended June 30, 2021. The Consolidated Financial Statements and accompanying Management’s Discussion and Analysis (“MD&A”) are available on the Company’s website at www.siennaliving.ca and on SEDAR at www.sedar.com.
Launch of New Retirement Platform “Aspira”
“Over the past year, we conducted an in-depth assessment of our retirement operations and identified opportunities that will set us apart in a competitive market,” said Nitin Jain, President and Chief Executive Officer of Sienna. “Under the Aspira brand, our goal is to provide residents with a wider range of choices. At the centre of our new brand is the conviction that seniors should be able to live the life they desire and deserve, with an increased emphasis on being a vital part of the local community.”
- Repositioning of retirement platform to distinguish service offerings and provide a wider range of choices for residents.
- The new platform will be launched in late 2021/early 2022, supported by a wide-spread communications and marketing campaign and a designated website for the Aspira brand.
Growing the Company
- Retirement – Construction commenced at Sienna’s joint venture development in Niagara Falls in May 2021. The estimated capital investment is approximately $50 million, with an expected development yield of approximately 7.5%. Sienna’s share of this 150-suite greenfield joint venture development is 70%.
- Long-term Care – The Company hosted a ground breaking ceremony at its 160-bed redevelopment site in North Bay that was attended by senior government officials, including the Premier of Ontario. Sienna’s estimated capital investment for this redevelopment to be named “Northern Heights Care Community” is approximately $55 million, with an expected development yield of approximately 8.0%.
Environmental, Social & Governance (“ESG”) Update
The Company has provided an interim update with additional disclosures related to Sienna’s human capital management practices, including:
- Diversity & Inclusion
- Approximately 80% of the Company’s management positions are held by women;
- Approximately 50% of Sienna’s senior executive team is female;
- One third of Sienna’s senior executive team identifies as Black, Indigenous or People of Colour (BIPOC);
- Sienna’s workforce is equally distributed between the age groups of under 35, 35 to 50, and over 50.
- Fair Compensation & Gender Pay Equity
- Over 95% of Sienna’s frontline team members earn more than minimum wage;
- Approximately 80% of Sienna’s frontline team members are compensated at 50% or higher than minimum wage;
- There is no gender wage gap between male and female frontline team members for similar positions.
Operations Update
- Improving Occupancy – With the easing of restrictions, resulting in the resumption of in-person tours at Sienna’s retirement residences and increased admissions to its long-term care communities, occupancy has started to improve:
- Retirement – Same property occupancy up 240 basis points to 80.6% as at June 30, 2021 from March 31, 2021;
- Long-term Care – Average occupancy up 130 basis points to 81.6% in Q2 2021 compared to Q1 2021;
- High Resident and Team Member Vaccinations – According to most recent vaccination data, approximately
- 96% of Sienna’s residents have received at least one dose of vaccine, with 95% fully vaccinated;
- 88% of Sienna’s team members have received at least one dose of vaccine, with 79% fully vaccinated.
- No COVID-19 Case Counts – As of August 10, 2021, none of Sienna’s 83 owned or managed residences had active cases of COVID-19.
- Capital Upgrades – To elevate the experience of our residents and the work environment for team members, Sienna is investing
- Approximately $2.0 million in capital upgrades at Sienna’s C Class long-term care communities in 2021, independent of their timing of redevelopment and on top of regular annual maintenance capital expenditures; and
- Approximately $1.7 million to date, to upgrade and install new air conditioning units in resident rooms with approximately 1,800 new units being installed at 30 long-term care communities in 2021. While most of the cost is expected to be funded by the government, Sienna committed to the purchase and installation of air conditioning prior to mandatory regulations coming into effect.
Second Quarter Operating and Financial Performance
- Revenue has remained stable at $162.7 million in Q2 2021, compared to $162.9 million in Q2 2020;
- Operating expenses, net were $131.6 million in Q2 2021, a modest increase of 0.5% compared to $131.6 million in Q2 2020;
- Net Operating Income (“NOI”) of $34.4 million in Q2 2021, excluding net pandemic expenses of $3.4 million, decreased by 12.9% (or $5.1 million) compared to Q2 2020, mainly due to lower Retirement occupancy levels, lower LTC preferred accommodation revenue from lower occupancy in private and semi-private rooms, higher labour cost and higher property expenses, partially offset by annual rental rate increases in Retirement and annual inflationary funding increases in LTC;
- Net income of $1.3 million increased by $8.1 million year-over-year, primarily due to lower amortization on intangible assets and lower interest expense on long-term debt, partially offset by lower NOI and higher income tax expense.
- Average occupancy in Sienna’s Long-Term Care (“LTC”) portfolio was 81.6%;
- Average same property occupancy in Sienna’s Retirement portfolio was 78.1%;
- Operating Funds from Operations (“OFFO”) per share decreased by $0.023 year-over-year to $0.226 per share; excluding net pandemic expense, OFFO per share decreased by 26.8% year-over-year to $0.268 per share;
- Adjusted Funds from Operations (“AFFO”) per share decreased by $0.038 year-over-year to $0.210 per share; excluding net pandemic expense and net pandemic capital recovery, AFFO per share decreased by 31.8% year-over-year to $0.249 per share;
- Payout ratio was 111.4% for the three months ended June 30, 2021; excluding net pandemic expenses and net pandemic capital recovery, the payout ratio was 94%.
Financial Position
The Company maintained a strong financial position during Q2 2021:
- Maintained high liquidity of $235 million, representing an increase of $18 million from $217 million as at December 31, 2020, and increased its unencumbered asset pool to approximately $1.1 billion as at June 30, 2021, representing an increase of $247 million from $840 million as at December 31, 2020;
- Decreased debt to gross book value by 270 basis points to 45.5% as at June 30, 2021, from 48.2% at December 31, 2020; and,
- Weighted average cost of debt increased to 3.4% as at June 30, 2021, from 3.2% as at December 31, 2020.
Financial and Operating Results
The following table represents key performance indicators for the periods ended June 30:
| $000s except occupancy, per share and ratio data | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | ||||
| Retirement - Average same property occupancy(1)(2) | 78.1 | % | 83.0 | % | 78.1 | % | 84.1 | % |
| Retirement - As at same property occupancy(1)(2) | 80.6 | % | 81.6 | % | 80.6 | % | 81.6 | % |
| Retirement - As at total occupancy(1)(2) | 80.1 | % | 80.8 | % | 80.1 | % | 80.8 | % |
| LTC - Average total occupancy(3) | 81.6 | % | 92.6 | % | 80.9 | % | 95.3 | % |
| LTC - Average private occupancy | 79.3 | % | 91.6 | % | 78.8 | % | 94.4 | % |
| Revenue | $162,668 | $162,922 | $323,896 | $328,549 | ||||
| Operating expenses, net | $131,643 | $131,031 | $248,604 | $260,147 | ||||
| Same property NOI(4) | $30,857 | $31,771 | $74,958 | $68,207 | ||||
| Total NOI(4) | $31,025 | $31,891 | $75,292 | $68,402 | ||||
| EBITDA(5) | $22,947 | $20,678 | $58,895 | $54,415 | ||||
| Net income (loss) | $1,318 | $(6,778 | ) | $11,461 | $(9,274 | ) | ||
| OFFO(6) | $15,126 | $16,699 | $40,469 | $41,117 | ||||
| AFFO(7) | $14,102 | $16,623 | $40,532 | $42,207 | ||||
| Total assets(8) | $1,592,009 | $1,834,675 | $1,592,009 | $1,834,675 | ||||
| OFFO per share(6) | $0.226 | $0.249 | $0.604 | $0.614 | ||||
| AFFO per share(7) | $0.210 | $0.248 | $0.605 | $0.630 | ||||
| Dividends per share | $0.234 | $0.234 | $0.468 | $0.468 | ||||
| Payout ratio(9) | 111.4 | % | 94.4 | % | 77.4 | % | 74.3 | % |
Notes:
- Retirement same property occupancy excludes the results from the expansion at Island Park Retirement Residence, which opened in July 2019 and is in the lease-up period. Retirement total average occupancy for the three months and six months ended June 30, 2021 was 77.7% and 77.7%, respectively (2020 - 82.2% and 83.2%, respectively).
- The year-over-year declines in Retirement occupancy are primarily related to a decline in new residents moving in due to the general impact of the COVID-19 pandemic, including access restrictions during outbreaks or provincial lockdowns.
- Long-term care residences are receiving occupancy protection funding for vacancies caused by temporary closure of admissions due to an outbreak, including COVID-19, and for capacity limitations of two beds per room as residents cannot be placed in rooms with three or four beds.
- NOI for the three and six months ended June 30, 2021 includes net pandemic expenses (recovery) of $3,409 and $(7,618), respectively (2020 - $7,661 and $7,765, respectively).
- EBITDA for the three and six months increased by $2,269 to $22,947 and $4,480 to $58,895, respectively, compared to comparative periods primarily due to lower net pandemic expenses, offset by lower revenues primarily due to lower occupancy levels and increase in mark-to-market expense on share-based compensation.
- OFFO for the three and six months ended June 30, 2021 includes an after-tax net pandemic expense (recovery) of $2,800 and $(45,475), respectively, (2020 - $7,814 and $7,914, respectively) and mark-to-market expense (recovery) on share-based compensation of $313 and $288, respectively (2020 - $(1,296) and $(3,836), respectively). OFFO per share for the three and six months ended June 30, 2021 excluding after-tax net pandemic expense (recovery) and mark-to-market expense (recovery) on share-based compensation was $0.273 and $0.541, respectively (2020 - $0.346 and $0.675, respectively).
- AFFO for the three and six months ended June 30, 2021 includes net pandemic capital (recovery) expenditures of $(186) and $232, respectively (2020 - $nil and $nil, respectively), after-tax net pandemic (recovery) expense of $2,800 and $(4,475), respectively (2020 - $7,814 and $7,914, respectively) and mark-to-market expense (recovery) on share-based compensation of $313 and $288, respectively (2020 - $(1,296) and $(3,836), respectively). AFFO per share for the three and six months ended June 30, 2021 excluding net pandemic capital expenditures (recovery) and after-tax net pandemic expense (recovery) and mark-to-market expense (recovery) on share-based compensation was $0.254 and $0.546, respectively (2020 - $0.345 and $0.691, respectively).
- Property and equipment and intangible assets included in total assets are measured at cost less accumulated depreciation and amortization.
- Payout ratio for the three and six months ending June 30, 2021, excluding after-tax net pandemic impact and mark-to-market on share-based compensation after tax, would be 94.0% and 86.3%, respectively (2020 - 64.1% and 62.6%, respectively).
Financial and Operating Results, excluding net pandemic expenses
The following table represents key performance indicators excluding net pandemic expenses (recovery) for the periods ended June 30:
| $000s except occupancy, per share and ratio data | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | ||||
| Operating expenses, excluding net pandemic expenses (recovery)(1) | $128,234 | $123,370 | $256,222 | $252,382 | ||||
| Same property NOI, excluding net pandemic expenses (recovery)(1) | $34,266 | $39,432 | $67,340 | $75,972 | ||||
| Total NOI, excluding net pandemic expenses (recovery)(1) | $34,434 | $39,552 | $67,674 | $76,167 | ||||
| EBITDA, excluding net pandemic expenses (recovery)(2) | $26,760 | $31,320 | $52,801 | $65,192 | ||||
| Net income (loss), excluding net pandemic expenses (recovery)(3) | $4,118 | $1,036 | $6,986 | $(1,360 | ) | |||
| OFFO, excluding net pandemic expenses (recovery) (3)(5) | $17,925 | $24,513 | $35,993 | $48,912 | ||||
| AFFO, excluding net pandemic expenses (recovery) (4)(5) | $16,715 | $24,437 | $36,287 | $50,002 | ||||
| OFFO per share, excluding net pandemic expenses (recovery)(3)(5)(6) | $0.268 | $0.366 | $0.537 | $0.732 | ||||
| AFFO per share, excluding net pandemic expenses (recovery) and net pandemic capital expenditures (recovery)(4)(5)(7) | $0.249 | $0.365 | $0.542 | $0.748 | ||||
| Payout ratio, excluding net pandemic expenses (recovery) and net pandemic capital expenditures (recovery)(8) | 94.0 | % | 64.1 | % | 86.3 | % | 62.6 | % |
Notes:
- Operating expenses, same property NOI and total NOI for the three and six months ended June 30, 2021 exclude net pandemic (recovery) expenses of $3,409 and $(7,618), respectively (2020 - $7,661 and $7,765, respectively).
- EBITDA for the three and six months ended June 30, 2021 excludes net pandemic expenses (recovery) of $3,813 and $(6,094), respectively, (2020 - $10,642 and $10,777, respectively).
- Net income (loss) and OFFO for the three and six months ended June 30, 2021 exclude after-tax net pandemic expenses (recovery) of $2,800 and $(4,475), respectively (2020 - $7,814 and $7,914, respectively).
- AFFO for the three and six months ended June 30, 2021 excludes net pandemic capital (recovery) expenditures of $(186) and $232, respectively (2020 - $nil and $nil, respectively) and after-tax net pandemic expenses (recovery) of $2,800 and $(4,475), respectively (2020 - $7,814 and $7,914, respectively).
- OFFO and AFFO for the three and six months ended June 30, 2021 include an after-tax mark-to-market expense (recovery) on share-based compensation of $313 and $288, respectively (2020 - $(1,296) and $(3,836), respectively).
- OFFO per share for the three and six months ended June 30, 2021 excluding after-tax net pandemic expense (recovery) and mark-to-market expense (recovery) on share-based compensation was $0.273 and $0.541, respectively (2020 - $0.346 and $0.675, respectively).
- AFFO per share for the three and six months ended June 30, 2021 excluding net pandemic capital expenditures and after-tax net pandemic recovery and net mark-to-market recovery on share-based compensation was $0.254 and $0.546, respectively (2020 - $0.345 and $0.691, respectively).
- Payout ratio for the three and six months ending June 30, 2021, excluding after-tax net pandemic impact and mark-to-market on share-based compensation after tax, would be 94.0% and 86.3%, respectively (2020 - 64.1% and 62.6%, respectively).
Second Quarter 2021 Summary
Average same property occupancy in Retirement was 78.1% in Q2 2021 compared to 83% in Q2 2020. The decrease in occupancy was primarily related to a decline in new residents moving in due to the impact of the COVID-19 pandemic, including access restrictions. Subsequent to Q2 2021, monthly average same property occupancy improved modestly from 78.9% in June to 79.7% in July, reflecting numerous marketing and sales initiatives. Rent collections remained high and consistent with pre-pandemic levels.
The following table provides an update on the monthly average same property occupancy and rent collections in Sienna’s Retirement portfolio during and subsequent to the end of Q2 2021:
| For the one month ended | ||||
| April 2021 | May 2021 | June 2021 | July 2021 | |
| Retirement same property occupancy (average) | 77.9% | 77.6% | 78.9% | 79.7% |
| Retirement rent collection (%) | 98.8% | 98.8% | 98.9% | 98.9% |
Average occupancy in LTC was 81.6% in Q2 2021. Long-term care communities are fully funded for vacancies caused by temporary closure of admissions due to an outbreak, including COVID-19, and for capacity limitations of two beds per room as residents cannot be placed in rooms with three or four beds. The Government of Ontario has announced that the occupancy protection funding will be in place for long-term care residences until August 31, 2021. Effective September 1, 2021, as new admissions gradually resume, occupancy targets of 97% for long-stay beds and 90% for interim short-stay beds, excluding unavailable beds as a result of capacity limitations in multi-bed rooms and the provision of isolation rooms, will be reinstated.
Net Pandemic Expenses decreased by $9.9 million to $3.8 million in Q2 2021, compared to Q2 2020. The decrease was mainly due to additional government assistance to support pandemic expenses and moderation of pandemic costs.
There are various programs and financial assistance provided by the governments to support pandemic expenses. The following table summarizes the government assistance provided to Sienna and expenses recognized related to COVID-19 included in operating expenses in the Company's consolidated statements of operations for the three and six months ended June 30, 2021:
| Three Months Ended | Six Months Ended | ||||||||||
| June 30, 2021 | June 30, 2021 | ||||||||||
| Thousands of Canadian dollars | RET | LTC | Admin | Total | RET | LTC | Admin | Total | |||
| Government assistance - temporary pandemic pay | 236 | 5,589 | — | 5,825 | 756 | 10,414 | — | 11,170 | |||
| Government assistance | 520 | 15,682 | — | 16,202 | 1,957 | 50,967 | — | 52,924 | |||
| Total government assistance | 756 | 21,271 | — | 22,027 | 2,713 | 61,381 | — | 64,094 | |||
| Pandemic labour - temporary pandemic pay | 236 | 5,589 | — | 5,825 | 756 | 10,414 | — | 11,170 | |||
| Pandemic labour | 1,239 | 15,240 | — | 16,479 | 2,831 | 34,500 | — | 37,331 | |||
| Personal protective equipment | 157 | 1,178 | — | 1,335 | 534 | 2,882 | — | 3,416 | |||
| Other | 80 | 1,717 | 404 | 2,201 | 280 | 4,279 | 1,524 | 6,083 | |||
| Total pandemic expense | 1,712 | 23,724 | 404 | 25,840 | 4,401 | 52,075 | 1,524 | 58,000 | |||
| Total net pandemic expenses (recovery) | 956 | 2,453 | 404 | 3,813 | 1,688 | (9,306 | ) | 1,524 | (6,094 | ) | |
In addition to the government assistance and pandemic expenses listed in the table above for the three and six months ended June 30, 2021, the Company has recognized pandemic capital expenditures in its interim consolidated statements of financial position of $0.2 million and $9.7 million, respectively (2020 - $nil and $nil, respectively), offset by government assistance of $0.4 million and $9.4 million, respectively (2020 - $nil and $nil, respectively), which have not been included in the table above.
Pandemic expenses are mainly related to additional staffing, temporary pandemic pay programs for team members and PPE. Other pandemic expenses for the Retirement and LTC communities include investments in cleaning supplies for IPAC, meals and accommodations to support team members. Furthermore, other pandemic expenses recorded in administrative costs include advisory fees to support the management of the pandemic.
NOI decreased by 2.7% in Q2 2021, or $0.9 million, to $31.0 million, compared to Q2 2020, mainly due to lower Retirement occupancy levels, lower LTC preferred accommodation revenue from lower occupancy in private and semi-private rooms, higher labour costs and property expenses, partially offset by annual rental rate increases in Retirement, annual inflationary funding increases in LTC and lower net pandemic expenses.
LTC NOI increased by $1.4 million to $18.1 million, compared to Q2 2020, primarily due to annual inflationary funding increases and lower net pandemic expenses, partially offset by lower preferred accommodation revenues, annual inflationary labour cost increases and timing of repairs and maintenance. Excluding net pandemic expenses, LTC's NOI for Q2 2021 decreased by $2.4 million to $20.5 million, compared to Q2 2020.
Retirement same property NOI for Q2 2021 decreased by $2.4 million to $12.8 million, compared to Q2 2020, primarily due to lower occupancy, higher labour costs and an increase in property expenses, partially offset by annual rental rate increases. Excluding net pandemic expenses, Retirement's same property NOI for Q2 2021 decreased by $2.8 million to $13.7 million, compared to Q2 2020.
Revenue decreased by 0.2% in Q2 2021, or $0.3 million, to $162.7 million, compared to Q2 2020. In the Retirement segment, the decrease of $1.4 million in Q2 2021 compared to Q2 2020 was mainly a result of lower occupancy, partially offset by annual rental rate increases in line with market conditions. LTC's revenues for Q2 2021 increased by $1.2 million compared to Q2 2020, primarily due to annual inflationary funding increases, partially offset by lower preferred accommodation revenue from lower occupancy in private and semi-private rooms.
Operating Expenses, net increased by 0.5% in Q2 2021, or $0.6 million, to $131.6 million, compared to Q2 2020. Excluding net pandemic expenses of $3.4 million, operating expenses increased by $4.8 million to $128 million, compared to Q2 2020. Retirement's operating expenses, excluding net pandemic expenses of $0.9 million, increased by $1.2 million to $22.1 million, mainly due to higher labour costs and property expenses. LTC's operating expenses, excluding net pandemic expenses of $2.5 million, increased by $3.6 million to $105.9 million, mainly due to annual inflationary labour cost increases and timing of repairs and maintenance.
Net income was $1.3 million for Q2 2021, representing an increase of $8.1 million compared to Q2 2020. The increase was primarily related to lower amortization on intangible asset and lower interest expense on long-term debt, partially offset by lower NOI and higher income tax expense. Excluding after-tax net pandemic expenses, net income was $4.1 million for Q2 2021, representing an increase of $3.1 million compared to Q2 2020.
OFFO decreased by 26.8% in Q2 2021, or $1.6 million, to $15.1 million compared to Q2 2020. OFFO per share decreased by 9.2% in Q2 2021, or $0.023, to $0.226. The decrease was primarily due to lower NOI and lower recovery of current income taxes, partially offset by lower interest expense on long-term debt. Excluding after-tax net pandemic expense, OFFO would be lower by 26.9% in Q2 2021, or $6.6 million, to $17.9 million. OFFO per share, excluding after-tax net pandemic expense, would be lower by 26.8% in Q2 2021, or $0.098 to $0.268.
AFFO decreased by 15.2% in Q2 2021, or $2.5 million, to $14.1 million compared to Q2 2020. AFFO per share decreased by 15.3% in Q2 2021, or $0.038, to $0.210. The decrease was primarily related to the decrease in OFFO noted above and higher maintenance capital expenditures, partially offset by timing of government assistance related to the funding of pandemic capital recovery. Excluding after-tax net impact from pandemic expenses and net pandemic capital recovery, AFFO would be lower by 31.5% in Q2 2021, or $7.7 million compared to $16.7 million in Q2 2020. AFFO per share, excluding net pandemic recovery and net pandemic capital expenditures, would decrease by 31.7% in Q2 2021, or $0.116, to $0.249.
Six Months Summary for period ended June 30, 2021
NOI increased by 10.1%, or $6.9 million, to $75.0 million compared to the six months ended June 30, 2020, driven by $15.3 million retroactive pandemic funding received in Q1 2021 related to pandemic expenses incurred in excess of available funding during the year ended December 31, 2020. Excluding net pandemic expenses, NOI for the period decreased by 11.2%, or $8.5 million, to $67.7 million mainly due to lower occupancy in the Retirement segment, lower preferred accommodation revenue from lower occupancy in private and semi-private rooms, higher labour costs and property expenses, partially offset by annual rental rate increases.
LTC NOI increased by 37.7%, or $12.2 million, compared to the six months ended June 30, 2020, primarily due to the $15.3 million retroactive pandemic funding received in Q1 2021 and annual inflationary funding increases, partially offset by lower preferred accommodation revenue, annual inflationary labour cost increases, increase in property expenses and timing of repairs and maintenance.
Retirement same property NOI decreased by 17.5%, or $5.4 million, compared to the six months ended June 30, 2020, mainly due to lower occupancy, higher labour costs and property expenses, partially offset by annual rental rate increases. Excluding net pandemic expenses, Retirement's same property NOI for the period decreased by $5.1 million to $27.2 million.
Revenue decreased by 1.4%, or $4.7 million, to $323.9 million compared to the six months ended June 30, 2020. In the Retirement segment, the decrease of $3.2 million was due to lower occupancy, partially offset by annual rental rate increases in line with market conditions. LTC’s revenues decreased by $1.4 million primarily due to lower LTC preferred accommodation revenue, partially offset by annual inflationary funding increases.
Operating expenses, net decreased by 4.4%, or $11.5 million, to $248.6 million compared to the six months ended June 30, 2020. Excluding net pandemic recovery of $7.6 million during the period, operating expenses increased by $3.8 million to $256.2 million. Retirement's operating expenses, excluding net pandemic expenses of $1.7 million, increased by $1.8 million to $44.7 million, mainly due to higher labour costs and property expenses. LTC's operating expenses, excluding net pandemic recovery of $9.3 million, increased by $2.1 million to $211.5 million, mainly due to annual inflationary labour cost increases, increase in property expenses and timing of repairs and maintenance.
OFFO decreased by 1.6%, or $0.6 million, to $40.5 million compared to the six months ended June 30, 2020. The decrease was primarily attributable to the higher share-based compensation from mark-to-market adjustments and higher income taxes, partially offset by increase in NOI. Excluding net pandemic recovery, OFFO would decrease by 26.4%, or $12.9 million, to $36 million.
AFFO decreased by 4%, or $1.7 million, to $40.5 million compared to the six months ended June 30, 2020, mainly due to decrease in OFFO as noted above, higher maintenance capital expenditures and timing of government assistance related to the funding of pandemic capital expenditures. Excluding net pandemic recovery, AFFO would decrease by 27.4%, or $13.7 million, to $36.3 million.
Outlook
Sienna’s forecast for its retirement operations includes continued gradual occupancy improvements during the second half of the year, based on the assumption that residences will remain open for in-person tours, supported by pent-up demand and our continued investment in sales, marketing and repositioning initiatives.
In Sienna's LTC portfolio, occupancy is expected to continue to improve in the second half of the year as admissions accelerate. Effective September 1, 2021, occupancy targets required for full funding will be reinstated, although these targets will exclude unavailable beds resulting mainly from capacity limitations in multi-bed rooms. We anticipate we will continue to receive funding for the unavailable beds. Given the long waiting list of approximately 38,500 for LTC beds across Ontario and the resumption of admissions of residents, we anticipate the achievement of occupancy targets required for full funding at the majority of our residences.
Excluding the impact of net pandemic expenses, we expect the financial performance of the Company’s LTC portfolio in 2021 to be slightly below 2020. Sienna’s internal forecasts are based on the impact of earlier access restrictions on preferred accommodation revenues, the possibility of not achieving the required occupancy targets for full funding at all of our long-term care residences, and additional investments to elevate resident experience.
Conference Call
The conference call will be on Thursday August 12, 2021 at 9:30 a.m. (ET). The toll-free dial-in number for participants is 1-844-543-5234, conference ID: 7883106. A webcast of the call will be accessible via Sienna's website at: www.siennaliving.ca/investors/events-presentations. The webcast of the call will be available for replay until August 13, 2022 and archived on Sienna's website.
About Sienna Senior Living
Sienna Senior Living Inc. (TSX:SIA) offers a full range of seniors' living options, including independent living, assisted living, long-term care, and specialized programs and services. Sienna's approximately 13,000 employees are passionate about helping residents live fully every day. For more information, please visit www.siennaliving.ca.
Risk Factors
Refer to the risk factors disclosed in the Company’s MD&A for the three and six months ended June 30, 2021, and its most recent Annual Information Form for more information.
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, without limitation, statements with respect to the impact of COVID-19 and measures taken to mitigate the impact including the effectiveness of the vaccine, availability of government funding, the availability of various government programs, government funding, and financial assistance. 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. 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:
Karen Hon
Chief Financial Officer and Senior Vice President
(905) 489-0254
karen.hon@siennaliving.ca
Nancy Webb
Senior Vice President, Public Affairs and Marketing
(905) 489-0788
nancy.webb@siennaliving.ca
