Extendicare (EXE) Q4 2024 earnings summary

Executive summary

• Adjusted EBITDA (excluding out-of-period items) rose 43.5% to $33.4M in Q4 2024, with all segments showing significant NOI and margin growth.

• Home healthcare delivered a record 11 million hours of care in 2024, with Q4 average daily volume up 10.1% year-over-year and margins improving by 160 basis points.

• Opened new LTC homes in Kingston and Stittsville, adding 448 beds, and began construction on two more homes, advancing redevelopment strategy.

• Announced a 5% increase in common share dividend to $0.042 per month, reflecting strong financial performance and confidence in future growth.

• Entered agreement to acquire nine LTC homes from Revera for $60.3M, expanding the redevelopment pipeline.

Financial highlights

• Q4 2024 consolidated revenue increased 11.8% to $391.6M, driven by LTC funding, occupancy recovery, home health care volume growth, and managed services expansion.

• Q4 NOI improved by $11.0M to $53.8M; excluding out-of-period funding, NOI rose 27.1% to $47.5M.

• Q4 Adjusted EBITDA was $39.7M, up 38.5% year-over-year; net earnings reached $19.9M, up 131.2%.

• Q4 AFFO per share was $0.34, up $0.11 year-over-year; adjusted AFFO per share was $0.28.

• Ended the year with $121.8M cash and $108.5M available under a new $275M credit facility; total liquidity $230.3M.

Outlook and guidance

• Anticipates closing the Revera LTC acquisition and sale of three LTC projects to Axium JV in Q2 2025, pending regulatory approvals.

• Redevelopment pipeline includes 1,408 new beds to replace 1,097 Class C beds, with further projects advancing.

• Expects continued high single-digit growth in home healthcare demand, driven by demographic trends and limited capacity growth in other segments.

• Anticipates future rate increases to align with inflation after a period of catch-up to post-pandemic inflation.

• Dividend increases considered as part of capital allocation, with payout ratio targeted near 50% as long as growth prospects remain strong.