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, reversing a prior year loss, and significant growth in FFO and occupancy rates.

• Operational improvements included reduced staffing agency costs by 60%, completed reorganizations, and integration of new properties.

• Record acquisition and financing activity, including several new properties and announced further acquisitions closing in Q1 2025.

• Transitioned to a more agile and scalable operating platform, empowering local management teams and enhancing efficiency.

• Focused on property-specific strategies and portfolio optimization to drive occupancy and NOI growth.

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 increased 61.7% to CAD 197.5 million, and total FFO rose 48.3% year-over-year, with FFO per unit at CAD 0.76.

• Q4 2024 net income was CAD 3.5 million, reversing a net loss of CAD 13.2 million in Q4 2023; Q4 FFO from continuing operations up 46.9%.

• Same property adjusted NOI increased to CAD 244.4 million in 2024, up 18.9% year-over-year; Q4 same property adjusted NOI up 14.4%.

• Same property occupancy increased 590 bps to 88% for 2024 and 510 bps to 90.1% in Q4 2024.

Outlook and guidance

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

• Expecting rent and services rates to increase by 4% in 2025, with same property operating margins projected to reach 40%.

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

• Anticipating double-digit same property NOI growth in 2025, depending on occupancy gains.

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