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Jun 30, 2022
Ventas Q2 2022 Earnings Report
Ventas reported strong Q2 2022 results, with performance at the high end of expectations, driven by SHOP portfolio growth.
Key Takeaways
Ventas delivered strong results in Q2 2022, driven by attractive year-over-year top and bottom-line growth in its SHOP portfolio. The company's performance benefited from strong demand and expanding pricing power, offsetting anticipated expense growth caused by broad inflationary pressures. Ventas continues to find compelling investment opportunities, with $1.3 billion of investment activity year to date.
Net Income (Loss) Attributable to Common Stockholders per share was ($0.11).
Normalized Funds from Operations per share was $0.72.
Total Company year-over-year same-store cash Net Operating Income growth was 3.5%, above the high end of the guidance range.
Senior Housing Operating Portfolio segment year-over-year same-store cash NOI growth of nearly 9%, at the high end of the guidance range, driven by same-store revenue growth exceeding 10%.
Ventas
Ventas
Ventas Revenue by Segment
Revenue by Segment
Triple-net leased properties Revenue
CapyFin.comResident fees and services Revenue
CapyFin.comIncome from loans & investments Revenue
CapyFin.comInterest and other income Revenue
CapyFin.com Forward Guidance
The Company currently expects to report third quarter 2022 Attributable Net Income (Loss), Nareit FFO and Normalized FFO per share within the following ranges, which include $20 million (or $0.05 per share) of HHS grants received to date in the third quarter 2022.
Positive Outlook
- SHOP same-store cash NOI is expected to grow in the range of 9% to 15% year-over-year.
- Ventas anticipates year-over-year revenue growth of approximately 8% at the midpoint of the same-store cash NOI guidance range, driven by the expected combination of 250 to 300 basis points of occupancy growth and improved rates.
- Year-over-year revenue growth is expected to be partially mitigated by continued broad inflationary expense pressure.
- Sequential SHOP cash NOI is expected to outperform pre-pandemic seasonal patterns.
- Office: Same-store cash NOI growth year-over-year is expected to be driven by contractual escalators and new leasing partially offset by expense growth and frictional vacancy in R&I.
Challenges Ahead
- Triple-Net: Same-store cash NOI growth year-over-year is driven by previously announced lease resolutions with senior housing triple-net tenants who were materially affected by the COVID-19 pandemic.
- Interest Rates and Foreign Exchange: Rising interest rates on floating rate debt and a strengthening U.S. Dollar are expected to reduce Normalized FFO by approximately ($0.02) per share in the third quarter versus the second quarter 2022.
- The Normalized FFO impact of third quarter general and administrative expenses is expected to range from approximately $36 million to $38 million.
- The guidance does not assume any new or unannounced material acquisitions or capital markets activities.
- The guidance assumes no material changes in the impact of COVID-19 on the Company’s business. The trajectory and future impact of COVID-19 on various aspects of the business remain highly uncertain and may change rapidly.
Revenue & Expenses
Visualization of income flow from segment revenue to net income