On February 19, 2025, Sabra Health Care REIT Inc (SBRA, Financial) released its 8-K filing detailing the financial results for the fourth quarter of 2024. Sabra Health Care REIT Inc is a real estate investment trust focused on healthcare facilities, operating primarily in the United States. The company specializes in nursing facilities, assisted living centers, and mental health facilities.
Performance Overview
Sabra Health Care REIT Inc reported a net income of $0.19 per diluted common share for Q4 2024, surpassing the analyst estimate of $0.16. The company's funds from operations (FFO) per diluted share stood at $0.36, while the normalized FFO was $0.35. These figures indicate a robust performance, reflecting the company's strategic initiatives and market recovery.
The company's total revenues for the quarter reached $182.35 million, exceeding the estimated $177.96 million. This revenue growth is crucial for Sabra, as it underscores the effectiveness of its investment strategies and operational efficiencies.
Strategic Achievements and Challenges
During the fourth quarter, Sabra completed the acquisition of a managed senior housing community for $24.0 million, with an initial expected cash yield of 8.6%. Additionally, the company disposed of nine skilled nursing facilities and one behavioral health facility, generating gross proceeds of $56.5 million. These strategic moves are vital for optimizing the company's portfolio and enhancing cash flow.
However, challenges such as increased operating expenses in the senior housing-managed portfolio, which rose to $55.76 million from $45.19 million in the previous year, could pose potential risks. Managing these costs effectively will be crucial for maintaining profitability.
Financial Highlights
Sabra's EBITDARM coverage ratios were strong, with skilled nursing/transitional care at 2.09x and behavioral health at 3.66x. The company's same-store managed senior housing Cash NOI increased by 17.9% year-over-year, highlighting operational improvements.
As of December 31, 2024, Sabra's net debt to adjusted EBITDA was 5.27x, indicating a stable financial position. The company declared a quarterly cash dividend of $0.30 per share, reinforcing its commitment to returning value to shareholders.
Income Statement and Cash Flow Analysis
Sabra's total expenses for the quarter were $143.14 million, slightly lower than the previous year's $144.28 million. The company reported a net gain of $6.06 million from real estate sales, contributing positively to its income before tax.
Net cash provided by operating activities was $310.54 million for the year, reflecting strong cash generation capabilities. However, net cash used in investing activities was $109.00 million, primarily due to real estate acquisitions and loan originations.
CEO Commentary
Rick Matros, CEO and Chair, stated, "We are proud of our results for the year, which reflect the strategy we articulated prior to 2024 and have since executed on. Our operators turned in a strong performance reflecting the recovery of the industry, the support we provided during the pandemic and the transitions we deemed necessary during that difficult time."
Conclusion
Sabra Health Care REIT Inc's Q4 2024 results demonstrate a solid financial performance, driven by strategic acquisitions and effective portfolio management. While challenges remain, particularly in managing operating expenses, the company's strong revenue growth and strategic initiatives position it well for future success. Investors and stakeholders will be keenly watching how Sabra navigates these challenges and capitalizes on growth opportunities in the healthcare real estate sector.
Explore the complete 8-K earnings release (here) from Sabra Health Care REIT Inc for further details.
