American Realty Investors, Inc. reports Earnings for Quarter Ended September 30, 2023

Rhea-AI Summary

American Realty Investors, Inc. (NYSE:ARL) reported a significant decrease in net income for the three months ended September 30, 2023, compared to the same period in 2022. The company's financial highlights include a total occupancy of 79% at September 30, 2023, with rental revenues increasing to $11.8 million. Additionally, the company paid off a $1.2 million loan and obtained a $25.4 million construction loan for a new property in Texas.

Positive

• Rental revenues increased by $4.3 million, primarily driven by the acquisition of the VAA Holdback Portfolio in 2022. Total occupancy stands at 79%, with a strong 96% occupancy at multifamily properties. The company also secured a $25.4 million construction loan for a new property in Texas, demonstrating growth and expansion.

Negative

• Net income attributable to common shares decreased significantly, from $302.3 million in 2022 to $3.0 million in 2023, primarily due to the share of the gain from the sale of the VAA Sale Portfolio, net of income tax effect in 2022. The decrease in net income raises concerns about the company's profitability and financial stability.

DALLAS--(BUSINESS WIRE)-- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the three months ended September 30, 2023. For the three months ended September 30, 2023, we reported net income attributable to common shares of $3.0 million or $0.18 per diluted share, compared to net income attributable to common shares of $302.3 million or $18.72 per diluted share for the same period in 2022.

Financial Highlights

• Total occupancy was 79% at September 30, 2023, which includes 96% at our multifamily properties and 49% at our commercial properties.
• On August 28, 2023, we paid off the $1.2 million loan on Athens.
• On November 6, 2023, we obtained a $25.4 million construction loan to build a 216 unit multifamily property in McKinney, Texas.

Financial Results

Rental revenues increased $4.3 million from $7.6 million for the three months ended September 30, 2022 to $11.8 million for the three months ended September 30, 2023. The increase in rental revenue is primarily due to a $5.0 million increase at our multifamily properties offset in part by a decrease of $0.8 million from the commercial properties. The increase in revenue from the multifamily properties is primarily due to the acquisition of the VAA Holdback Portfolio in 2022.

Net operating loss decreased $1.1 million from $3.2 million for three months ended September 30, 2022 to $2.1 million for the three months ended September 30, 2023. The decrease in net operating loss is primarily due to a decrease in legal costs.

Net income attributable to common shares decreased $299.3 million from $302.3 million for the three months ended September 30, 2022 to $3.0 million for the three months ended September 30, 2023. The decrease in net income is primarily attributed to our share of the gain from the sale of the VAA Sale Portfolio, net of income tax effect in 2022.

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 September 30,								Nine Months Ended September 30,
			2023				2022				2023				2022
Revenues:
Rental revenues		$	11,838			$	7,570			$	34,236			$	22,310
Other income			688				749				2,217				1,925
Total revenue			12,526				8,319				36,453				24,235
Expenses:
Property operating expenses			7,443				4,701				20,580				12,541
Depreciation and amortization			3,313				2,193				9,615				6,840
General and administrative			1,579				3,042				8,424				7,956
Advisory fee to related party			2,295				1,571				6,883				7,614
Total operating expenses			14,630				11,507				45,502				34,951
Net operating loss			(2,104	)			(3,188	)			(9,049	)			(10,716	)
Interest income			9,008				7,035				25,201				19,937
Interest expense			(1,954	)			(4,044	)			(7,574	)			(13,301	)
Gain on foreign currency transactions			-				1,533				993				19,437
Loss on extinguishment of debt			-				(1,166	)			(1,710	)			(2,805	)
Equity in income from unconsolidated joint ventures			234				464,143				2,946				471,385
(Loss) gain on sale or write-down of assets, net			(32	)			1,539				156				16,580
Income tax provision			(1,127	)			(81,548	)			(2,416	)			(81,616	)
Net income			4,025				384,304				8,547				418,901
Net income attributable to noncontrolling interest			(1,037	)			(82,015	)			(2,456	)			(88,986	)
Net income attributable to the common shares		$	2,988			$	302,289			$	6,091			$	329,915
Earnings per share						.
Basic and diluted		$	0.18			$	18.72			$	0.38			$	20.43
Weighted average common shares used in computing earnings per share
Basic and diluted			16,152,043				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 is the net income attributable to common shares for American Realty Investors, Inc. (NYSE:ARL) for the three months ended September 30, 2023?

The net income attributable to common shares was $3.0 million or $0.18 per diluted share, representing a significant decrease from the same period in 2022.

What is the total occupancy at September 30, 2023, for American Realty Investors, Inc. (NYSE:ARL)?

The total occupancy was 79%, including 96% at multifamily properties and 49% at commercial properties.

What are the financial highlights of American Realty Investors, Inc. (NYSE:ARL) for the three months ended September 30, 2023?

The company reported a $4.3 million increase in rental revenues, totaling $11.8 million, and obtained a $25.4 million construction loan for a new property in Texas.

What caused the decrease in net income for American Realty Investors, Inc. (NYSE:ARL) for the three months ended September 30, 2023?

The decrease in net income is primarily attributed to the company's share of the gain from the sale of the VAA Sale Portfolio, net of income tax effect in 2022.