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Mar 31, 2020
KKR Q1 2020 Earnings Report
Reported a net loss due to unrealized Current Expected Credit Losses provision, but core earnings remained consistent with the previous year.
Key Takeaways
KKR Real Estate Finance Trust Inc. reported a net loss attributable to common stockholders of $35.2 million, or ($0.61) per share, due to an unrealized CECL provision of $55.3 million. Core Earnings were $25.3 million, or $0.44 per share, consistent with the previous year. The company maintained a strong liquidity position with $369.9 million in cash and committed $352.5 million to new loans.
Net loss attributable to common stockholders was $35.2 million, or ($0.61) per share, impacted by a $55.3 million unrealized CECL provision.
Core Earnings were $25.3 million, or $0.44 per share, consistent with the same period in the previous year.
The company had a strong liquidity position with $369.9 million in cash and an additional $80.1 million of undrawn commitments.
Committed $352.5 million to new floating-rate senior and mezzanine loans and funded an additional $55.7 million for previously closed loans.
Forward Guidance
CEO Matt Salem expressed confidence in the company's conservative business strategy and durable financing, emphasizing the focus on institutional quality real estate in top-tier U.S. markets and strong sponsor capitalization amidst the broader market volatility.
Positive Outlook
- Company's first priority is the health and safety of all stakeholders.
- Adapted to remote working and continue to be highly efficient.
- Increased the frequency of communication with the Board of Directors, shareholders, borrowers, and lenders to ensure transparency.
- Differentiated conservative business strategy will help the company navigate this challenging market environment.
- Over $400 million of available liquidity including $370 million of cash at quarter end.
Challenges Ahead
- Uncertainties created by the COVID-19 pandemic, including the projected impact of COVID-19 on our business, financial performance and operating results.
- Deterioration in the performance of the properties securing our investments that may cause deterioration in the performance of our investments and, potentially, principal losses to us.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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