Kimco Realty (KIM) Beats on Q2 FFO, Collects 82% of July Rent
Kimco Realty Corp.’s KIM second-quarter 2020 funds from operations (FFO) came in at 24 cents per share, marginally surpassing the Zacks Consensus Estimate of 23 cents.
Results reflect healthy rental rate leasing spreads on new lease and renewals. However, same-property net operating income (NOI) was affected mainly due to a charge for potentially uncollectible accounts receivable.
The FFO per share, however, came in lower than the year-ago quarter’s number of 36 cents.
The retail REIT generated revenues of $238.9 million, which slipped 16.1% year over year and also missed the Zacks Consensus Estimate of $250 million.
Notably, at the end of July, all of the company’s shopping centers were open and operational with around 94% of tenants, based on the annualized base rent currently open, including some that are operating on a limited basis. Moreover, the company collected roughly 70% of the total pro-rata base rents billed for second-quarter 2020 and 82% for July. It also granted rent deferrals approximating 18% of pro-rata minimum base rent for the reported quarter.
Quarter in Detail
Pro-rata portfolio occupancy at the end of the second quarter was 95.6%. The company attained pro-rata anchor occupancy of 98.2%, flat year on year but shrunk 40 basis points (bps) mainly because of the vacates of four 24 Hour Fitness locations, one Lucky’s Market,two Pier 1 leases and the closing of three A.C. Moore stores during the June-end quarter.
Yet, small-shop occupancy at the end of the reported quarter was 88%. This marks a sequential contraction of 80 bps and a year-over-year decline of 250 bps.
The company signed 52 new leases and executed 180 lease renewals & options during the April-June quarter. Pro-rata rental-rate leasing spreads on comparable spaces increased 12%, with rental rates for new leases and renewals/options climbing 22.9% and 10.7%, respectively.
Same-property NOI declined 13.6% year over year, primarily reflecting a charge for potentially uncollectible accounts receivable.
During the second quarter, the company recognized a $51.7-million charge for potentially uncollectible accounts receivable due to the pandemic’s adverse economic impact.
Balance Sheet Position
Kimco exited second-quarter 2020 with cash and cash equivalents of $201.7 million, up from the $123.9 million recorded at the end of 2019. Moreover, the retail REIT had more than $2.2 billion of immediate liquidity at quarter end. This included full availability under its $2-billion unsecured revolving credit facility and consolidated weighted-average debt maturity profile of 10.6 years. Also, it had approximately 320 unencumbered properties. Further, it maintains $628.2 million of Albertsons Companies Inc. ACI common stock, subject to certain lock-up provisions.
Kimco currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kimco Realty Corporation Price, Consensus and EPS Surprise
Kimco Realty Corporation price-consensus-eps-surprise-chart | Kimco Realty Corporation Quote
We, now, look forward to the earnings releases of other retail REITs like Simon Property Group, Inc. SPG, Taubman Centers, Inc. TCO and The Macerich Company MAC, all of which are scheduled to release quarterly numbers next week.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Kimco Realty Corporation (KIM) : Free Stock Analysis Report
Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report
Macerich Company The (MAC) : Free Stock Analysis Report
Taubman Centers, Inc. (TCO) : Free Stock Analysis Report
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
