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Jun 30, 2020
Welltower Q2 2020 Earnings Report
Welltower's financial performance was impacted by the COVID-19 pandemic, particularly affecting the seniors housing and post-acute care businesses, but showed signs of recovery towards the end of the quarter.
Key Takeaways
Welltower reported a net income of $0.42 per diluted share and normalized FFO of $0.86 per diluted share for the second quarter of 2020. The company faced challenges in its seniors housing and post-acute care businesses due to the COVID-19 pandemic, but saw sequential improvement in seniors housing occupancy trends towards the end of the quarter. Welltower prioritized its balance sheet strength and completed strategic dispositions.
Net income attributable to common stockholders was $0.42 per diluted share.
Normalized FFO attributable to common stockholders was $0.86 per diluted share.
Completed $949 million of pro rata Seniors Housing Operating and Outpatient Medical dispositions at a blended yield of 5.7%.
Enhanced near-term liquidity profile to $4.3 billion, including $1.3 billion of cash and cash equivalents as of July 31, 2020.
Welltower
Welltower
Welltower Revenue by Segment
Welltower Revenue by Geographic Location
Revenue by Segment
Seniors Housing Ops Revenue
CapyFin.comRevenue by Geographic Location
United States Revenue
CapyFin.com Forward Guidance
Welltower faces continued uncertainty due to the COVID-19 pandemic, but anticipates gradual recovery and remains focused on balance sheet strength and strategic capital deployment.
Positive Outlook
- Sequential improvement in seniors housing occupancy trends observed in June and July.
- High rent collection rates from operators under Triple-net lease agreements.
- Continued strong demand and liquidity within the seniors housing and outpatient medical asset classes as demonstrated by completed dispositions.
- Enhanced near-term liquidity profile providing financial flexibility.
- Proactive measures to address the challenges posed by the COVID-19 pandemic.
Challenges Ahead
- The COVID-19 pandemic had a pronounced impact on the second quarter financial results.
- Seniors housing and post-acute care businesses endured significant challenges, resulting in steep occupancy declines.
- Move-out activity continued to outpace move-ins, resulting in occupancy losses.
- Elevated expenses associated with the COVID-19 pandemic, including higher labor costs and procurement of personal protective equipment.
- Total occupancy losses are expected to range from 125 to 175 basis points in the third quarter.