Healthcare real estate company AHR announced its first-quarter revenue of $540.6 million, closely aligning with market predictions of $541.55 million. CEO Danny Prosky expressed confidence in the company's trajectory, noting that AHR has secured additional capital at favorable rates to back future external investments and developmental projects. He emphasized the company's robust performance despite a challenging winter, driven by strong demand for long-term care services. This demand helped maintain stable occupancy levels, countering any expected declines. AHR's regional partners were instrumental in providing high-quality care, particularly in higher-acuity long-term care facilities, during this period. Looking ahead, Prosky anticipates the demand for their healthcare services to strengthen further as the industry enters the more favorable spring and summer seasons of 2025.
AHR Key Business Developments
Release Date: February 28, 2025
- Same Store NOI Growth (Q4 2024): 21.6% year-over-year.
- Full Year Same Store NOI Growth (2024): 17.7% compared to 2023.
- Trilogy Segment Same Store NOI Growth (Q4 2024): 28% year-over-year.
- Trilogy Segment Full Year Same Store NOI Growth (2024): 23.8%.
- Shop Segment Same Store NOI Growth (Q4 2024): Over 65% year-over-year.
- Shop Segment Full Year Same Store NOI Growth (2024): 52.8%.
- Normalized Funds From Operations (NFFO) Per Share (Q4 2024): $0.40 per diluted share.
- Full Year NFFO Per Share (2024): $1.41.
- Net Debt to Adjusted EBITDA (End of 2024): 4.3 times, improved from 8.5 times at the end of 2023.
- External Growth Investment (2024): Over $650 million in managed long-term care segments.
- Capital Raised Through ATM Program (Q4 2024): Approximately $121 million at $28.05 per share.
- 2025 NFFO Per Share Guidance: $1.56 to $1.60 per fully diluted share.
- 2025 Total Portfolio NOI Growth Guidance: 7% to 10%.
- 2025 Trilogy Segment NOI Growth Guidance: 10% to 12%.
- 2025 Shop Segment NOI Growth Guidance: 18% to 22%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- American Healthcare REIT Inc (AHR, Financial) reported strong same-store NOI growth of 21.6% year-over-year in Q4 2024, with full-year growth at 17.7%.
- The Trilogy segment, the largest in AHR's portfolio, showed significant growth, contributing to 71% of total NOI by the end of Q4 2024.
- AHR's net debt to adjusted EBITDA improved significantly from 8.5 times at the end of 2023 to 4.3 times at the end of 2024, providing financial flexibility.
- The company invested over $650 million in external growth in 2024 and plans further investments in 2025, including new acquisitions and development projects.
- AHR's guidance for 2025 indicates expected double-digit NFFO per share growth, reflecting confidence in continued strong performance.
Negative Points
- Potential policy changes in the healthcare sector, particularly related to Medicaid, pose uncertainty and could impact future operations.
- The outpatient medical segment faces headwinds from expected tenant move-outs, which could affect occupancy and NOI growth.
- Seasonal factors such as higher utility costs and fewer days in Q1 are expected to impact NOI growth sequentially.
- The company anticipates modest sequential headwinds in Trilogy NOI in Q1 2025 due to compensation-related expenses and seasonal occupancy changes.
- Despite strong growth, the company acknowledges that the pace of occupancy growth in the shop segment may not match the 600 basis points increase seen in 2024.
