Chartwell Retirement Residences (CSH-UN) Q4 2024 earnings summary

Executive summary

• Achieved a strong turnaround in 2024, with net income of CAD 22.4 million versus a loss of CAD 60.9 million in 2023, and significant growth in FFO and occupancy rates.

• Achieved strong improvements in employee engagement, resident satisfaction, occupancy, and cash flow, with record acquisition and financing activity.

• Operational improvements included reduced staffing agency costs, completed reorganizations, and integration of new properties.

• Management highlights operational excellence, portfolio growth, and capital management as drivers for continued strong results.

• Acquired several new properties and announced further acquisitions closing in Q1 2025.

Financial highlights

• 2024 net income was CAD 22.4 million, down from CAD 128.3 million in 2023, which included a CAD 178.7 million gain on sale from LTC transactions.

• FFO from continuing operations rose to CAD 197.5 million in 2024 from CAD 122.2 million in 2023; Q4 FFO was CAD 57.7 million, up 46.9% year-over-year.

• FFO per unit for 2024 was CAD 0.76, up from CAD 0.51 in 2023.

• Same property adjusted NOI increased CAD 38.8 million or 18.9% to CAD 244.4 million in 2024; Q4 same property adjusted NOI was CAD 63.4 million, up CAD 8 million year-over-year.

• Same property occupancy rose 590 bps to 88% in 2024; Q4 2024 occupancy was 90.1%, up 5.1 percentage points year-over-year.

Outlook and guidance

• Forecasting same property occupancy of 91.1% by March 2025 and targeting 95% by year-end.

• Expecting rent and service rates to increase by approximately 4% in 2025, with same property operating margins growing to about 40%.

• General and administrative expense growth expected to remain below inflation due to efficiency initiatives.

• Industry fundamentals remain strong, with demand for seniors housing projected to double over 20 years and a significant supply gap expected.

• Strong demand fundamentals and positive leasing activity expected to support continued momentum in 2025.