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Mar 31, 2020
UHT Q1 2020 Earnings Report
Reported net income and FFO increased, but vacancies at two hospital facilities and the impact of COVID-19 created uncertainty.
Key Takeaways
Universal Health Realty Income Trust reported an increase in net income and FFO for the first quarter of 2020 compared to the same period in 2019. The company's net income was $4.6 million, or $0.33 per diluted share, compared to $4.2 million, or $0.31 per diluted share, in Q1 2019. FFO was $11.2 million, or $0.82 per diluted share, compared to $11.0 million, or $0.80 per diluted share, in Q1 2019. However, vacancies at two hospital facilities and the emerging impact of COVID-19 created some financial headwinds.
Net income increased to $4.6 million, or $0.33 per diluted share, compared to $4.2 million, or $0.31 per diluted share, in Q1 2019.
FFO increased to $11.2 million, or $0.82 per diluted share, compared to $11.0 million, or $0.80 per diluted share, in Q1 2019.
A decrease in interest expense of $383,000 favorably impacted net income and FFO.
Vacancies at two hospital facilities in Corpus Christi, Texas, and Evansville, Indiana, unfavorably impacted net income and FFO, resulting in a combined net operating loss of $198,000.
Revenue by Segment
Forward Guidance
The COVID-19 pandemic is expected to have a material adverse impact on future financial results due to factors beyond the company's control.
Positive Outlook
- Most tenants in hospitals, MOBs, and ambulatory care centers are permitted to continue operating.
- A new, 122-month lease was fully executed with a third-party tenant for approximately 26,000 rentable square feet on the first floor of the MOB in Denison, Texas.
- The master flex lease commitment was reduced to 20,000 of rentable square feet on the third floor of the MOB.
- Construction of the behavioral health care hospital in Clive, Iowa, is expected to be completed in late 2020 or early 2021.
- The credit agreement has an option to extend the maturity date for up to two additional six-month periods.
Challenges Ahead
- Patient volumes at acute care hospitals and other healthcare properties were significantly reduced in the second half of March due to COVID-19.
- Tenants representing approximately 13% of the aggregate rentable square feet under lease at MOBs had not yet paid their April rent.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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