The following is a summary of the Chartwell Retirement Residences (CWSRF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Chartwell Retirement Residences reported a net income of $23.6 million in Q3 2024, a decrease from $158.2 million in Q3 2023 primarily due to a prior gain on sale.

• FFO from continuing operations increased by 54.8%.

• Same-property adjusted NOI increased by $9.3 million or 17.1%.

• Strong financial improvements were supported by higher adjusted NOI from continuing operations and lower G&A expenses, partially offset by higher finance costs and negative changes in fair value of financial instruments.

Business Progress:

• Chartwell has enhanced occupancy by 610 basis points to 88.5% in the same-property portfolio during Q3 2024.

• They announced transactions valued at over $1.2 billion, aiming for portfolio growth and renewal through acquisitions of high-quality properties and divesting older, non-core assets.

• Strategic expansions into high-demand retirement destinations like Vancouver Island and high-quality assets in Quebec, improving their market footprint.

• Implemented property-specific pricing strategies and reduced staffing agency costs significantly, attributing to better financial health and operational efficiency.

Opportunities:

• Continued growth in operational scale and market penetration with the acquisition of high-quality properties well below replacement cost.

• Development and integration of properties like those in Quebec and Vancouver Island to build a strong presence in key markets, aiming for higher market rate growth.

• Utilizing targeted incentives and improved operational efficiencies to support rapid occupancy growth, expected to reach 90.2% by December 2024.

Risks:

• Faced risks associated with changes in market rates and increased finance costs.

• Operational challenges including maintaining occupancy rates and managing higher operational costs due to financial instruments and tax expenses.

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