Omega Healthcare's earnings slide on acquisition costs

The Baltimore Sun
Omega Healthcare slips as acquisition costs erode revenue gains

Omega Healthcare Investors Inc., the Hunt Valley-based health care real estate investment trust, announced Monday that it earned $43.5 million in the quarter ended June 30, a 7 percent drop compared to the same period last year.

Earnings per share fell to 22 cents from 37 cents. However, the trust's quarterly revenue soared 62 percent to $197.7 million as it completed the acquisition of Aviv REIT on April 1, which added 348 properties in 31 states to Omega's portfolio.

The revenue growth was offset by a $41.7 million of acquisition-related costs as well as other increased expenses associated with its growth.

Omega's "funds from operations," a more closely watched measure for real estate investment trusts, was $100.7 million in the April-to-June period, up from $79.7 million a year earlier.

In addition to its $3.8 billion all-equity acquisition of Aviv, Omega also completed a $178 million acquisition of 23 assisted-living facilities in the United Kingdom during the second quarter.

In the earnings announcement Monday, Omega said it has completed another $184 million in new investments in July, including the purchase of five buildings in New York City for $112 million. The buildings on Manhattan's Upper East Side are to be developed into a senior housing community.

Omega also increased its quarterly common stock dividend rate to 55 cents a share last month.

Omega's investment portfolio now includes 936 properties, including nursing homes, assisted living facilities and senior housing, in 41 states and the United Kingdom.

Shares in Omega, which closed up 1 percent Monday at $36.64 each, were off 11 cents in after-hours trading Monday evening.

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