American Realty Investors (ARL)) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $1.5 million, up $1.2 million year-over-year, driven by higher multifamily segment profit and lower general, administrative, and advisory expenses due to bond repayments in 2023.

• For the six months ended June 30, 2024, net income was $3.8 million, down $0.7 million from the prior year, mainly due to lower interest income and commercial segment profit.

• Net operating loss narrowed to $1.3 million from $3.9 million compared to Q2 2023.

• The company owns 14 multifamily properties (2,328 units), 4 office buildings, and 1,843 acres of land, with ongoing development of three new multifamily projects and land development at Windmill Farms.

Financial highlights

• Q2 2024 total revenue was $11.8 million, slightly down from $12.2 million in Q2 2023; six-month revenue was $23.7 million, nearly flat year-over-year.

• Rental revenues decreased to $11.2 million from $11.4 million year-over-year, with multifamily gains offset by commercial declines.

• Operating expenses for Q2 2024 were $13.1 million, down from $16.1 million in Q2 2023; six-month expenses were $26.5 million, down from $30.9 million.

• General and administrative expenses dropped to $1.6 million from $3.7 million year-over-year.

• Earnings per share for Q2 2024 were $0.07, up from $0.01 in Q2 2023; six-month EPS was $0.18, down from $0.19.

• Funds from Operations (FFO) for Q2 2024 was $4.4 million, down from $5.1 million in Q2 2023; six-month FFO was $9.4 million, down from $10.3 million.

• Total occupancy at June 30, 2024, was 78%, with multifamily at 93% and commercial at 48%.

Outlook and guidance

• Management expects cash and equivalents, along with receivables and short-term investments, to be sufficient to meet liquidity needs.

• Plans include selective asset sales, refinancing, and additional borrowings to support liquidity and development.