Sienna Senior Living Inc LWSCF

RBC Price Target CAD 14.00 Sentiment: Negative

[cttglvr]

I apologize for the poor copy amd paste. It looked a lot different on the RBC site. Originally I thought the results. while not great were not horrible.

Dividends. RBC estimated dividend coverage at 101%. Actual is a beat at just under 99% coverage.

I was waiting for earnings before doubling my position. In this case I see plenty of upside but fear   where the BOC terminal interest rate will be, ability to hire and retain personel as wages are for the most part tracking inflation.

February 23, 2023 Sienna Senior Living Inc. Q4 in line; 2023 retirement outlook seems reasonable, but LTC below our call TSX: SIA | CAD 12.34 | Sector Perform | Price Target CAD 14.00 Sentiment: Negative Our view: SIA reported Q4/22 OFFOPS of $0.24 vs. $0.27 last year (-11% YoY), in-line with our $0.24E, but a bit below the Street’s $0.25E. On balance, our initial read is modestly negative. SP NOI was -4.4% (-6.7% YTD) on weakness in long-term care, partly offset by healthy growth in retirement. For 2023, SIA’s outlook for further growth in retirement NOI and margin improvements seems reasonable, albeit partly constrained by continued cost pressures. However, its outlook for flat LTC NOI growth is well below our current 2023E, although some of the variance could be made up through higher government recoveries. More clarity expected on the call (Feb-24 at 4 pm ET; 1-800-715-9871; ID 8818813). Highlights: • In line, with offsetting variances. NOI was below our forecast ($0.01/share), but offset by lower G&A. In Q4, SIA booked a $6.6MM restructuring charge tied to the pending closure of a LTC home in ON which sustained significant damage to the original design and construction predating SIA’s ownership; more colour expected on the call. • LTC SP NOI -11.3% YoY (-17.6% YTD) from higher preferred accommodation revenue and flow-through funding, offset by higher net pandemic and labour costs, and occupancy clawbacks for properties that missed the 97% occupancy threshold. • Average LTC occupancy rose to 89.9% (+20 bps QoQ, +100 bps YoY). Excl. ward beds, occupancy slipped to 96.3% (-40 bps QoQ). • 2023 LTC outlook short of our forecast: SIA expects similar NOI as 2022 ($70MM), with labour cost pressures to persist, below our current $78MM 2023E (-$0.11/share variance). SIA’s forecast includes $2-3MM of net pandemic costs in Q1/23. • Retirement SP NOI +4.6% YoY (+11.1% YTD) driven by higher occupancy and higher rents, partly offset by higher net pandemic, labour, food, maintenance, and property tax costs. • Average SP retirement occupancy increased to 88.6% (+20 bps QoQ, +440 bps YoY). Occupancy in the 12 properties acquired in Q2/22 is 85.3% (+310 bps since acquisition). • 2023 retirement outlook: SIA expects 1) Q1/23 SP retirement occupancy to be in line with Q4/22, but increase through 2023 to >90% (>87% in the acquisition portfolio); 2) rate increases of ~5%, 3) continued cost pressures, particularly labour (agency staffing), 4) similar operating margins in Q1/23 as 2022 (35.7%), but improving 150-200 bps YoY for the full year. • Debt/GBV at 43.9% (+60 bps QoQ, -80 bps YoY), with debt/EBITDA at 8.9x (-0.1x QoQ, +1x YoY). At Q4, available liquidity is $287MM from cash and undrawn lines. • Additional funding should help with LTC redevelopments. Following the ON govt’s increased funding announced last December, SIA expects to have 480 beds under construction in mid-2023 (unchanged from Q3/22).

[newcoin]

'On balance, our initial read is modestly negative.' These analysts kill me. They should be more resposible than to put out garbage like this.