American Realty Investors, Inc. reports Earnings for Quarter Ended June 30, 2022

Rhea-AI Summary

American Realty Investors (NYSE:ARL) reported a net income of $16.3 million or $1.01 per diluted share for Q2 2022, a significant recovery from a net loss of $27.3 million in Q2 2021. The company collected approximately 97% of rents, with 93% occupancy in multifamily properties. However, rental revenues dropped $2.9 million due to property sales. The net operating loss decreased to $3.0 million, mainly due to reduced legal costs, while net income benefitted from a $29.6 million arbitration settlement and currency gains.

Positive

• Net income of $16.3 million for Q2 2022 compared to a net loss of $27.3 million in Q2 2021.
• 97% of rents collected, with 98% from multifamily tenants.
• Net operating loss improved to $3.0 million from $8.8 million year-over-year.
• Increase of $29.6 million attributed to arbitration settlement.

Negative

• Rental revenues decreased by $2.9 million compared to the same quarter last year due to property sales.

DALLAS--(BUSINESS WIRE)-- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended June 30, 2022. For the three months ended June 30, 2022, we reported net income attributable to the Company of $16.3 million or $1.01 per diluted share, compared to net loss of $27.3 million or $1.69 per diluted share for the same period in 2021.

Financial Highlights

• We collected approximately 97% of our rents for the three months ended June 30, 2022, comprised of approximately 98% from multifamily tenants and approximately 96% from office tenants.
• Total occupancy was 90% at June 30, 2022, which includes 93% at our multifamily properties and 69% at our commercial properties.

Financial Results

Rental revenues decreased $2.9 million from $10.2 million for the three months ended June 30, 2021 to $7.3 million for the three months ended June 30, 2022. The decrease in rental revenue is primarily due to the sale of 600 Las Colinas in 2021 and the sale of Toulon in the first quarter of 2022.

Net operating loss decreased $5.7 million from $8.8 million for three months ended June 30, 2021 to $3.0 million for the three months ended June 30, 2022. The decrease in net operating loss is primarily due to a reduction of legal costs related to the Clapper litigation and arbitration settlement in 2021 offset in part by net operating profit from the sale of 600 Las Colinas in 2021.

Net income attributable to the Company increased $43.6 million from a net loss $27.3 million for the three months ended June 30, 2021 to net income of $16.3 million for the three months ended June 30, 2022. The increase in net income is primarily attributed to the $29.6 million arbitration settlement of the Earn Out Obligation in 2021 and $18.9 million increase in gain on foreign currency transactions due to the improved exchange rate of the U.S. Dollar to the New Israeli Shekel.

About American Realty Investors, Inc.

American Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The Company also holds mortgage receivables. The Company’s primary asset and source of its operating results is its investment in Transcontinental Realty Investors, Inc. (NYSE:TCI). For more information, visit the Company’s website at www.americanrealtyinvest.com.

AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
				Three Months Ended June 30,								Six Months Ended June 30,
				2022				2021				2022				2021
Revenues:
Rental revenues				$	7,259			$	10,194			$	14,740			$	20,555
Other income					870				909				1,176				2,376
Total revenue					8,129				11,103				15,916				22,931
Expenses:
Property operating expenses					3,812				5,058				7,840				10,890
Depreciation and amortization					2,298				3,211				4,647				6,538
General and administrative					2,194				5,866				4,914				9,101
Advisory fee to related party					2,858				5,739				6,043				8,175
Total operating expenses					11,162				19,874				23,444				34,704
Net operating loss					(3,033	)			(8,771	)			(7,528	)			(11,773	)
Interest Income					9,419				5,616				16,201				11,260
Interest expense					(6,389	)			(7,681	)			(12,556	)			(15,419	)
Gain (loss) on foreign currency transactions					14,132				(4,793	)			17,904				2,824
Loss on extinguishment of debt					-				-				(1,639	)			-
Equity in income from unconsolidated joint venture					2,048				4,572				7,242				7,908
Gain (loss) on sale or write-down of assets, net					3,893				(24,445	)			15,041				(7,047	)
Income tax provision					(40	)			1,841				(68	)			1,801
Net income (loss)					20,030				(33,661	)			34,597				(10,446	)
Net income (loss) attributable to noncontrolling interest					(3,718	)			6,333				(6,971	)			1,186
Net income (loss) attributable to the Company				$	16,312			$	(27,328	)		$	27,626			$	(9,260	)
Earnings per share
Basic and diluted				$	1.01			$	(1.69	)		$	1.71			$	(0.57	)
Weighted average common shares used in computing earnings per share
Basic and diluted					16,512,043				16,152,043				16,152,043				16,152,043

 

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American Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

Investor.relations@americanrealtyinvest.com

Source: American Realty Investors, Inc.

FAQ

What were the earnings results for American Realty Investors for Q2 2022?

American Realty Investors reported a net income of $16.3 million or $1.01 per diluted share for Q2 2022.

How much rent did American Realty Investors collect for the quarter ended June 30, 2022?

The company collected approximately 97% of rents, with 98% from multifamily tenants.

Did American Realty Investors experience any significant losses in Q2 2022?

While rental revenues decreased by $2.9 million, the company reported a net operating loss improvement to $3.0 million.

What contributed to the increase in net income for American Realty Investors in Q2 2022?

The increase was primarily due to a $29.6 million arbitration settlement and favorable currency transactions.

What was the occupancy rate for American Realty Investors' properties as of June 30, 2022?

Total occupancy was 90%, with multifamily properties at 93% and commercial properties at 69%.