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Mar 31, 2023
EastGroup Q1 2023 Earnings Report
EastGroup's Q1 2023 financial results were announced, demonstrating growth in key metrics and strategic capital allocation.
Key Takeaways
EastGroup Properties reported a solid first quarter in 2023, with FFO per share increasing by 9% and Same Property Net Operating Income (PNOI) growth. The company strategically managed its capital allocation, maintaining a strong balance sheet while navigating a period of economic uncertainty.
Net Income Attributable to Common Stockholders was $1.02 per diluted share.
Funds from Operations (FFO) increased by 9.5% to $1.84 per share.
The operating portfolio was 98.7% leased and 97.9% occupied as of March 31, 2023.
Rental rates on new and renewal leases increased an average of 48.5% on a straight-line basis.
EastGroup
EastGroup
Forward Guidance
EastGroup estimates EPS for 2023 to be in the range of $3.73 to $3.85 and FFO per share to be in the range of $7.49 to $7.61.
Positive Outlook
- FFO per share is projected to increase by 7.9% year-over-year.
- Same PNOI growth on a cash basis is expected to be between 6.5% and 7.5%.
- The average month-end occupancy for the operating portfolio is projected to be between 97.2% and 98.2%.
- Development starts are projected at 2.6 million square feet.
- The company anticipates closing $200 million in unsecured debt at a weighted average interest rate of 5.50%.
Challenges Ahead
- Reserves for uncollectible rent are estimated at $1.9 million.
- Potential risks related to economic conditions, supply chain disruptions, and construction costs.
- The company faces risks associated with tenant defaults and lease renewals.
- Interest rate increases and the availability of financing could impact future performance.
- The company is exposed to risks from natural disasters, pandemics, and other catastrophic events.