Equity Lifestyle Properties Inc (ELS) Q3 2024 Earnings Call Highlights: Strong FFO Growth ...

In This Article:

  • Normalized FFO Growth: 5.3% for the third quarter.

  • RV Annual Revenue Growth: 6.9% year-to-date.

  • Third-Quarter FFO and Normalized FFO: $0.72 per share.

  • NOI Growth: 5.8% for the third quarter.

  • Core Community-Based Rental Income Increase: 6.2% for the quarter.

  • Core RV and Marina Annual Base Rental Income Increase: 6.2% in the third quarter and 6.9% year-to-date.

  • Core Utility and Other Income Increase: 7.1% for the September year-to-date period.

  • Core Operating Expenses Increase: 2.8% for the third quarter.

  • Full-Year 2024 Normalized FFO Guidance: $2.92 per share at the midpoint.

  • Full-Year Core Property Operating Income Growth Projection: 6.3% at the midpoint.

  • Debt-to-EBITDAre: 4.6 times on a pro forma basis.

  • Interest Coverage: 5.5 times on a pro forma basis.

  • Weighted Average Interest Rate: 4.05% on a pro forma basis.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Equity Lifestyle Properties Inc (NYSE:ELS) reported strong normalized FFO growth of 5.3% for the third quarter.

  • The company's RV annual revenue showed a robust growth of 6.9% year-to-date.

  • Over 95% of new homebuyers in ELS properties were cash buyers, indicating strong financial commitment from residents.

  • ELS's digital marketing efforts and partnerships have significantly expanded their reach, achieving 38.7 million impressions in their summer campaign.

  • The company has a strong balance sheet with a projected debt-to-EBITDAre of 4.6 times and interest coverage of 5.5 times after recent financial maneuvers.

Negative Points

  • Hurricane Milton caused damage to several properties in Florida, leading to cleanup and restoration efforts.

  • Seasonal rent decreased by 4.4% and transient rent decreased by 4.3% year-to-date, indicating challenges in these segments.

  • The company experienced a 5% favorability in payroll due to competitive job markets affecting staffing levels, particularly in RV properties.

  • There is a noted normalization of demand in the RV space, which could impact future growth.

  • The transaction market for institutional quality assets remains slow, limiting acquisition opportunities for ELS.

Q & A Highlights

Q: Could you remind us about the 2025 preliminary rate growth guidance and the uplift from new customers? A: Paul Seavey, CFO, explained that the rent charged to new residents after turnover is 13%, which has moderated from 16% earlier in the year. The preliminary rate growth estimate includes adjustments for residents who received notices on January 1, similar to last year.

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