10:12 AM EST, 02/24/2023 (MT Newswires) -- Sienna Senior Living Inc. (SIA.TO) was down more than 5% at last look on Friday after overnight Thursday reporting Q4 net loss of $6.7 million, or $0.092 per basic and diluted share, compared with net income of $4.7 million, or $0.070 per share, a year earlier.
Adjusted funds from operations for the quarter ended Dec. 31, 2022 was $0.237 per share, compared with $0.247 per share a year earlier. Analysts polled by Capital IQ expected adjusted FFO of $0.24 per share.
Total adjusted revenue for the fourth quarter increased by 10.9% to $193.2 million from $174.2 million a year earlier. However, same-property net operating income decreased by 4.4% to $31.2 million from $32.6 million.
"In 2023, we intend to capture the growth potential inherent in our retirement segment, advance our long-term care redevelopment initiatives, and continue with our platform enhancements," said Nitin Jain, President and CEO.
Sienna said it expects to have a total of 480 beds under construction in its long-term care projects by mid-2023. In addition, over 1,000 beds are in the planning stages in the Greater Toronto Area, it said.
The company said it expects average Q1 2023 occupancy in the retirement segment to remain at a similar level as Q4 2022. For the full year ending Dec. 31, 2023, Sienna expects average same-property occupancy to exceed 90%.
The operating margin in the retirement segment in Q1 2023 is expected to be similar to the full-year margin of 35.7% in 2022. Sienna expects the 2023 operating margin for the full year to improve by about 150 to 200 basis points compared to 2022. It also expects its 2023 net operating income for the full year in the long-term care segment to be similar to 2022 level.
Separately, National Bank of Canada noted Sienna reported Q4 operating funds from operations per share of $0.24, down 11% year on year, below consensus at $0.25 and above the bank's $0.22 forecast.
Retirement NOI was worse than the bank's forecast and long-term care NOI was better than forecast due to retroactive funding recorded in Q4. Interest expenses were also higher than expected, the bank noted.
The bank said the company's 2023 retirement outlook looks a little softer than what it forecast. It said Sienna expects consistent NOI year-over-year in its long-term care operations, which is in line with its view.
The bank said that, assuming revenue growth in the mid-single-digit range, its 2023 NOI forecast looks "somewhat aggressive". "And if we need to true up our interest expenses higher as well, we may need to revise 2023 downward. Taxes and G&A will also play a part in these revisions too and could swing numbers around some," the bank said.
The bank noted that retirement segment's same-property NOI was up 4.6% on improved occupancy and higher rental rates, offset by lower margins, but long-term care's same-property NOI remained challenged and fell 11.3% on higher unfunded pandemic expenses and lower occupancy funding.
National Bank maintained its Outperform rating on Sienna and the price target of $14.00.
Price: 11.67, Change: -0.67, Percent Change: -5.43