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Dec 31, 2022
Omega Healthcare Q4 2022 Earnings Report
Omega Healthcare reported mixed results for Q4 2022, with a decrease in revenue offset by gains on asset sales.
Key Takeaways
Omega Healthcare Investors, Inc. reported a net income of $47 million for Q4 2022, an increase compared to the same period in 2021. However, total revenues decreased due to operator restructurings and asset sales. The company completed new investments and continued to work through operator restructurings.
Net income for the quarter was $47 million, or $0.19 per common share.
Adjusted Funds From Operations (AFFO) for the quarter was $177 million, or $0.73 per common share.
Completed $89 million in real estate acquisitions and funded $15 million in capital renovation and construction-in-progress projects.
Sold 33 facilities for $321 million in cash proceeds and $105 million in seller financing, generating a $180 million gain.
Omega Healthcare
Omega Healthcare
Omega Healthcare Revenue by Segment
Revenue by Segment
Tax & Lease Income Revenue
CapyFin.comReal Estate Loan Interest Revenue
CapyFin.comNon-RE Loan Interest Revenue
CapyFin.comMiscellaneous Income Revenue
CapyFin.com Forward Guidance
Omega Healthcare's first quarter earnings are expected to be impacted by deferred rents associated with additional operator restructurings, which will result in a decline in earnings and a related increase in the dividend payout ratio. Operating performance is expected to improve as the year progresses and operator restructurings are completed. However, the risk of further operator issues remains due to facility occupancy and profitability still being meaningfully below pre-pandemic levels.
Positive Outlook
- Portfolio occupancy continues to grow, albeit modestly, as the labor market gradually improves.
- Many states have implemented much needed Medicaid reimbursement rate increases.
- Skilled nursing industry is an integral part of the healthcare continuum and an important tool in the effort to meet increasing clinical needs at a manageable price.
- The industry is well positioned to benefit from multi-decade demographic tailwinds.
- Omega will continue to work with its operators to help them meet this increased demand.
Challenges Ahead
- First quarter earnings will be further impacted by deferred rents associated with additional operator restructurings.
- Expected decline in first quarter earnings and a related increase in the dividend payout ratio.
- Risk of further operator issues remains.
- Facility occupancy and profitability are still meaningfully below pre-pandemic levels.
- Inflation is still at elevated levels which leads to a challenging cost environment for the industry.
Revenue & Expenses
Visualization of income flow from segment revenue to net income