Sienna Senior Living Inc. Provides Operations Update and Reports 2020 First Quarter Financial Results
“I am incredibly grateful for our team who continues to demonstrate commitment, compassion and resilience amid the fight against COVID-19,” said
Sienna is singularly focused on the health and safety of residents and team members, and has been proactive and diligent in implementing extensive infection prevention and other precautionary measures to limit the spread of COVID-19 since early 2020.
- COVID-19 cases – To date, there are no confirmed COVID-19 cases in any of Sienna’s residences in
British Columbia . InOntario , 13 long-term care and 4 retirement residences have active COVID-19 cases, and 3 residences have now cleared of outbreak status. - CAPES – Sienna is a founding member of the
Canadian Alliance to Protect and Equip Seniors Living (“CAPES”), an initiative designed to ensure that seniors’ living providers have access to personal protective equipment (“PPE”) during the global supply chain disruption. CaRES Fund – Inspired by workers in the sector amid the COVID-19 crisis, Sienna participated in the launch of theSenior Living CaRES Fund (“CaRES Fund ”) together with three sector peers, to provide emergency financial assistance to sector employees facing extraordinary circumstances and to invest in future education for sector employees and their families.The CaRES Fund is further supported by the contributions by the Company’s Board of Directors.- Accreditation renewal – Sienna’s long-term care (“LTC”) portfolio in
Ontario received a three-year accreditation award, achieving exemplary status with a 99.5% conformance toCommission on Accreditation of Rehabilitation Facilities (“CARF”) quality of care standards.
First Quarter Financial Performance
- Revenue increased by 1.7% to
$166.4 million in Q1 2020, compared to Q1 2019; - Total same property NOI decreased by 6.4% to
$36.4 million in Q1 2020, compared to Q1 2019; - Average occupancy in Sienna’s LTC portfolio remained high at 97.9%;
- Average same property occupancy in Sienna’s retirement portfolio (“Retirement”) was 85.1%;
- Operating Funds from Operations (“OFFO”) per share increased by 13.4% year-over-year to
$0.365 per share; - Adjusted Funds from Operations (“AFFO”) per share increased by 8.2% year-over-year to
$0.382 per share; - Payout ratio was 61.3% for the three months ended
March 31, 2020 .
Solid Financial Position
- In
March 2020 , the Company entered into a credit agreement for a$200 million senior unsecured revolving credit facility for a five-year term; - Liquidity increased to
$222.4 million as atMarch 31, 2020 , from$144 million as atDecember 31, 2019 , comprised of cash and cash equivalents and available credit facilities; - Fair value of unencumbered asset pool increased to approximately
$540 million as atMarch 31, 2020 , from approximately$300 million as atDecember 31, 2019 ; - Debt to gross book value reduced by 90 bps to 46.9% year-over-year;
- Interest service coverage ratio improved to 4.2 times from 3.8 times year-over-year;
- Debt to adjusted EBITDA decreased to 6.8 years from 7.1 years year-over-year.
Financial and Operating Results
$000s except occupancy, per share and ratio data | Three months ended |
Three months ended |
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Retirement – Average same property occupancy(1)(2) | 85.1 | % | 90.4 | % | ||
Retirement – As at same property occupancy(1)(2) | 84.5 | % | 89.4 | % | ||
LTC – Average total occupancy | 97.9 | % | 98.2 | % | ||
LTC – Average private occupancy | 97.3 | % | 98.4 | % | ||
Revenue | $ | 166,437 | $ | 163,669 | ||
Operating expenses | $ | 129,926 | $ | 124,757 | ||
NOI(3) | $ | 36,511 | $ | 38,912 | ||
Net (loss) income | $ | (2,496 | ) | $ | 442 | |
Operating Funds from Operations (OFFO)(4) | $ | 24,418 | $ | 21,322 | ||
Adjusted Funds from Operations (AFFO)(4) | $ | 25,584 | $ | 23,383 | ||
Net (loss) income per share | $ | (0.04 | ) | $ | 0.01 | |
OFFO per share(4)(5) | $ | 0.365 | $ | 0.322 | ||
AFFO per share(4)(5) | $ | 0.382 | $ | 0.353 | ||
Dividends declared per share | $ | 0.234 | $ | 0.230 | ||
Payout Ratio | 61.3 | % | 65.2 | % |
Notes:
- Retirement same property occupancy excludes the results from the expansion at Island Park Retirement Residence, which is in a lease-up period since it opened in
July 2019 . Retirement total average occupancy is 84.2% for the three months endedMarch 31, 2020 (2019 - 90.4%). - The year-over-year decline in Retirement occupancy is primarily related to a slowdown in tours and new residents moving in due to access restrictions during the COVID-19 pandemic, the continuing oversupply in the
Ottawa market and new supply in theKingston andSouth Surrey markets. - NOI for Q1 2020 includes net expense of
$104 related to COVID-19 mainly due to timing. - OFFO and AFFO for the three months ended
March 31, 2020 include a$2,541 after-tax recovery in respect of mark-to-market adjustment on share-based compensation of (2019 – after-tax expense of$1,029 ). - OFFO and AFFO per share for the three months ended
March 31, 2020 excluding the after-tax impact of the COVID-19 net expense and the mark-to-market adjustments on share-based compensation would have decreased by$0.037 to$0.328 and$0.345 , respectively (2019 – increased by$0.016 to$0.338 and$0.369 , respectively).
Operations Update
Managing COVID-19
The management of COVID-19 is currently the foremost priority of the Company and is operationally intensive. Every residence has extensive infection prevention and control measures and protocols in place to protect residents and team members against COVID-19 and to minimize the spread.
COVID-19 Positive Cases
To date, there are no confirmed COVID-19 cases in any of Sienna’s residences in
Despite the many precautions and safeguards, we currently have 13 Ontario LTC homes and 4 Retirement residences of Sienna’s 70 owned residences, and 1 managed home of Sienna’s 13 managed residences, with active cases of COVID-19.
At some locations, there has been limited spread of the virus to a very few cases in either residents or staff. Unfortunately, some of our LTC residences in
For more information on our response to COVID-19 and affected residences, please visit Sienna’s website.
Staffing Update
Staffing challenges in the seniors’ living sector have been exacerbated by COVID-19, particularly when a residence has a positive COVID-19 case. Sienna has worked extensively to recruit and deploy staff and to expedite the hiring process, while supporting single work sites. The temporary pandemic pay for front-line workers by the governments of
Procurement of PPE and CAPES
Every Sienna residence has had an adequate supply of the required PPE to date for use in accordance with provincial directives. Sienna has sourced nearly 3.7 million pieces of PPE to date for use at our residences.
Sienna is a founding member of CAPES to ensure that all seniors’ living providers have access to PPE amid the global supply chain disruption. This initiative, together with help from various levels of government and regulatory authorities, has enabled us to procure an adequate supply of the required PPE to date for use in accordance with provincial directives.
As part of CAPES, Sienna commits to overfund its PPE requirement by 35% to allow for a reserve of supplies to be made available at cost to smaller and not-for-profit Canadian operators. To date, this collaboration of more than 25 sector operators has procured over 20 million pieces of PPE for distribution to seniors’ living providers across
Inspired by the dedication and extraordinary efforts of staff members in the seniors’ living sector, earlier this week the Company participated in the launch of the
In appreciation of the commitment of sector workers to the extraordinary fight against COVID-19, in addition to Sienna’s
Government Support
We are grateful for the provincial governments’ support for assistance in funding the extraordinary costs associated with the extensive infection prevention and safeguard measures, and single work site for team members, all of which help to limit the spread of the virus.
Government funding for direct care and resident programs in
Quality of Care
Subsequent to the end of Q1 2020, our Ontario LTC portfolio received a three-year accreditation through CARF and achieved an exemplary quality performance of 99.5% conformance to CARF standards. This highest level of accreditation is a testament to the incredible work Sienna’s team is doing each and every day, and recognizes the Company’s culture, resident centred focus, best practice programs and protocols in the sector and resident satisfaction.
In addition, in comparison to Ontario’s provincial average for the publicly reported long-term care quality indicators, Sienna has performed better than or in line with the provincial average on the quality indicators. Our LTC residences meet or exceed compliance with thousands of requirements set by regulatory authorities.
2020 First Quarter Summary
Average occupancy in LTC remained high at 97.9%. For LTC residences in both
Average same property occupancy in Retirement was 85.1%. Contributing factors to the occupancy softness are related to access restrictions during the COVID-19 pandemic, the continuing oversupply in the
NOI decreased by 6.2% (or
LTC same property NOI decreased by 2.0% to
Retirement same property NOI decreased by 11.4% to
Revenue increased by 1.7% (or
Operating expenses increased by 4.1% (or
The Company generated a net loss of
OFFO increased by 14.5% (or
AFFO increased by 9.4% (or
The Company’s average same property occupancy in the Retirement portfolio was 83.7% for the month ended
Rent collections from residents for the month ended
Conference Call
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About
Risk Factors
Refer to the risk factors on “General Business Risks” and “COVID-19 and Other Outbreaks” disclosed in the Company’s MD&A for the three months ended
Forward-Looking Statements
Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management’s current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as “anticipate,” “continue,” “could,” “expect,” “may,” “will,” “estimate,” “believe,” “goals” or other similar words and include, without limitation, statements with respect to business strategy and financial condition, and in particular in respect of the impact of COVID-19 and measures taken to mitigate the impact, supply-chain integrity and availability of PPE, the availability of various government programs, government funding and financial assistance. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Chief Financial Officer & Chief Investment Officer
(905) 489-0787
Nitin.Jain@siennaliving.ca
Source: Sienna Senior Living