Omega Healthcare Investors (OHI) Q4 2023 earnings summary

Executive summary

• Q4 2023 net income was $56.5M, or $0.22/share, versus $46.7M, or $0.19/share, in Q4 2022; AFFO was $173.5M, or $0.68/share, versus $176.7M, or $0.73/share.

• Portfolio occupancy exceeded 80%, EBITDAR coverage reached a post-pandemic high of 1.28x, and the share of coverage below 1.0x declined from 27.5% to 13.2%.

Financial highlights

• Q4 revenue rose $94.5M YoY to $239.3M; expenses fell $82.2M to $197.9M, while other income declined $162.9M to $20.4M.

• FY 2023 revenue increased $71.5M YoY to $949.7M; expenses decreased $6.1M to $793.6M, while other income fell $258.1M to $99.5M.

• FY net income was $248.8M, or $1.00/share, versus $438.8M, or $1.80/share, in 2022; Nareit FFO rose to $591.2M, or $2.36/share, from $460.5M, or $1.89/share.

• FY AFFO was $698.7M, or $2.79/share, versus $730.2M, or $2.99/share; FAD was $656.9M, or $2.62/share, versus $677.6M, or $2.77/share.

Outlook and guidance

• FY 2024 adjusted FFO guidance is $2.70–$2.80 per diluted share; Q1 and Q2 earnings are expected to remain affected by operator restructurings, with improvement as the year progresses.

• Guidance assumes $94M in asset sales, repayment of $400M in senior unsecured debt due in 2024, timely operator restructurings and transitions, and no material market-rate changes or additional operators shifting to cash-basis revenue recognition.

• Guidance excludes additional acquisitions and asset sales, interest refinancing expense, additional capital transactions, acquisition costs, and any additional credit-loss provisions.