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Dec 31, 2023
Kennedy-Wilson Q4 2023 Earnings Report
Kennedy Wilson reported mixed results with a strong investment management platform growth offset by non-cash losses.
Key Takeaways
Kennedy Wilson's Q4 2023 results showed a significant GAAP loss primarily due to non-cash items related to unrealized declines in real estate values within their co-investment portfolio. Despite these losses, the investment management platform experienced substantial growth, and the company is implementing strategic asset recycling and cost reduction plans to enhance future cash flow.
Investment Management fees grew by 44% to $16 million in Q4-23.
Fee-Bearing Capital reached a record $8.4 billion in Q4-23.
The company sold or is under contract to sell assets that are expected to generate approximately $320 million in net proceeds since Q3-23.
Originated $220 million in new construction loans, completed $281 million in additional fundings on existing loans, and realized $84 million in repayments in the Debt Investment Platform.
Kennedy-Wilson
Kennedy-Wilson
Kennedy-Wilson Revenue by Segment
Revenue by Segment
Rental Revenue
CapyFin.comHotel Revenue
CapyFin.comInvestment Management Fees Revenue
CapyFin.comLoan Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
Kennedy Wilson is focusing on strategic asset recycling and cost reduction to improve cash flow and seek opportunities in the current market environment.
Positive Outlook
- Asset sales are expected to generate $550-$750 million of cash.
- Cost efficiency plan targeting $15-20 million in annual overhead reductions.
- Expects to add 3,800 multifamily units and Produce $43 million in Est. Annual NOI at Stabilization by YE-25.
- Company expects apartment developments in Dublin are expected to produce $13 million of Est. Annual NOI at stabilization.
- The Company has approximately $5.2 billion in incremental non-discretionary capital with certain strategic partners that is currently available for investment.
Challenges Ahead
- There can be no assurance that the Company will close the sales under contract as described above or the described originations under non-binding term sheets in part or at all.
- The Company is subject to withholding taxes to the extent we repatriate cash from certain of our foreign subsidiaries.
- Under the KWE Notes covenants we have to maintain certain interest coverage and leverage ratios to remain in compliance.
- Due to these covenants, we evaluate the tax and covenant implications before we distribute cash, which could impact the availability of funds at the corporate level.
- The Company drew an additional $75 million on its revolving credit facility.