The following is a summary of the EastGroup Properties, Inc. (EGP) Q1 2024 Earnings Call Transcript:
Financial Performance:
EastGroup Properties reported an 8.8% rise in Funds From Operations, excluding a 2023 involuntary conversion.
FFO per share for Q1 2024 stands at $1.98 per share, climbing 8.8% from $1.82 for Q1 2023.
Projected Q2 2024 FFO guidance is estimated to be between $1.99 to $2.07 while FFO for the full year should lie between $8.17 to $8.37.
The quarter saw a capital raise of about $75 million in equity funding with shares settled for gross proceeds of $50 million.
The ratio of unadjusted debt-to-EBITDA decreased to 4 times and interest and fixed charge coverage increased to 10.4 times.
Financial setback due to increased bad debt observed. However, the company anticipates strong same-store results owing to significant rent bumps.
Property operating expenses have risen, offset mostly by high occupancies and costs being passed to tenants.
Anticipated decline of approximately 120 basis points in same-store occupancy for FY24.
Business Progress:
An uptick in acquisition opportunities has been noticed, enabling them to reduce legal risk and quicken development timelines.
The company has strategically entered new markets like Raleigh due to its economic stability and growth potential.
Successfully acquired Spanish Ridge in Las Vegas, moving to self-management and improving returns.
Projects earnings growth of approximately 7.5% this year.
Expansion plans slowed down as tenants extend their decision-making periods for expansions.
Continuation of the company's selective approach to M&A activity, focusing on steady growth with less risk.
Anticipates a long-term occupancy rate of around 97%, higher than the previous norm of 95%.
Revolutionary acquisition approach, focusing on individual buildings with attractive yields for long-term prospects.
The company acknowledges Amazon's expansion as a prospective enhancement in demand for its 'Shallow Bay' markets.
Continues to seek new opportunities, expecting higher interest rates to support their acquisition strategy.
More details: EastGroup Properties Inc IR
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