Weingarten Realty (NYSE: WRI) Reports Fourth Quarter Results And Provides COVID-19 Update
If you were unable to listen to the earnings conference call, we have you covered. Below is the link to the transcript to read, a link to the recording of the earnings call, or you can watch the highlight video.
Fourth Quarter Operating and Financial Highlights
- Net income attributable to common shareholders (“Net Income”) for the fourth quarter was $0.18 per diluted share (hereinafter “per share”) compared to $0.20 per share in the third quarter of 2020 and $0.58 per share in the same quarter of 2019;
- Core Funds From Operations Attributable to Common Shareholders (“Core FFO”) for the quarter was $0.43 per share compared to $0.44 per share in the third quarter of 2020 and $0.53 per share in the same quarter of 2019;
- Common dividend per share will increase 67% to $0.30 per quarter;
- Cash collections of rent and billable expenses were 94% of the total billed for the fourth quarter;
- Leasing production was the highest fourth quarter production in annualized base minimum rents since 2015. The Company executed 81 new leases and 91 renewals representing $14.6 million in base minimum rent;
- Dispositions in the quarter were $96 million bringing the year-to-date total to $248 million; and,
- Acquisition of the remaining 42% of the Village Plaza at Bunker Hill center not previously owned, which is one of the best properties in the portfolio.
- The coronavirus pandemic continues to impact the Company’s operations, however the transformed portfolio of quality properties posted improved collection metrics in the fourth quarter.
- Cash collections of prorata base rent and expense recoveries totaled 94% for the fourth quarter compared to 93% for the third quarter. Cash collections in January remain consistent with 93% collected to-date.
- Deferrals of rent payments to future periods executed in the fourth quarter represent an additional 2%, down from 4% in the third quarter.
- Abatements of rent during the fourth quarter were 1%.
“We are extremely pleased with the continued improvement in cash collections in the quarter as it reflects the strength of our transformed portfolio of quality properties. While we continue to work our way through issues with our tenants, there are several categories where our tenants are healthy, thriving and expanding. We are also very excited with the strength of our leasing activity as the number of deals we completed in the fourth quarter is the highest we have produced in a fourth quarter since 2015. Leasing activity continues to accelerate in 2021 with approximately $10 million of annualized revenue from leases that are signed but not yet paying rent. Additionally, we have a robust pipeline of over 60 new leases that are under letter of intent and negotiating in our legal department with annualized rents greater than $7 million that makes us optimistic as we look to the future,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.
Balance Sheet, Liquidity and Dividends
With low leverage, the absence of any material maturities until the fourth quarter of 2022 and the full availability of its revolving credit facility, the Company is in a solid liquidity position.
The Board of Trust Managers declared a quarterly cash dividend of $0.30 per common share payable on March 16, 2021 to shareholders of record on March 9, 2021. This represents an annualized dividend of $1.20 per share which results in a payout ratio of approximately 70% of the Company’s projected 2021 NAREIT FFO based upon the mid-point of the Company’s FFO guidance. Management is comfortable with this 67% increase based on continued strong cash collection metrics, signed new leases that have not commenced and a strong leasing pipeline.
Accordingly, the Company repurchased approximately 832,000 of its common shares in the fourth quarter at an average price of $16.66 per share.
“With full availability under our revolver, cash collections trending at higher levels than originally projected, proceeds from additional dispositions and access to numerous other sources of capital, we remain comfortable with our ability to meet all liquidity needs going forward and are positioned to take advantage of all opportunities that come available,” said Steve Richter, Executive Vice President and Chief Financial Officer.
There remains significant uncertainty regarding the impact of the pandemic going forward and the related economic outlook for the year.
Net Income (per share) $0.68 – $0.81
NAREIT FFO (per share) $1.65 – $1.75
Core FFO (per share) $1.65 – $1.75
Acquisitions $50 – $100 million
Dispositions $100 – $150 million
Fourth Quarter Resources