Transcontinental Realty Investors, Inc. Reports Earnings for Quarter Ended June 30, 2022

Rhea-AI Summary

Transcontinental Realty Investors, Inc. (NYSE:TCI) reported a net income of $16.5 million or $1.91 per diluted share for the quarter ending June 30, 2022, a significant turnaround from a net loss of $30.7 million in 2021. The company achieved a 97% rent collection rate, with multifamily tenants at 98% and office tenants at 96%. However, rental revenues fell by $2.9 million from $10.2 million in the previous year, largely due to property sales. Legal costs related to prior arbitration have decreased, contributing to a $2.4 million decline in net operating loss.

Positive

• Net income increased by $47.2 million from a loss of $30.7 million in 2021.
• Achieved a rent collection rate of 97%, with multifamily occupancy at 93%.
• Net operating loss decreased by $2.4 million, reflecting lower legal expenses.

Negative

• Rental revenues declined by $2.9 million from $10.2 million in the same period last year.
• Commercial property occupancy was only 69%, potentially impacting future revenue.

DALLAS--(BUSINESS WIRE)-- Transcontinental Realty Investors, Inc. (NYSE:TCI) 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 $16.5 million or $1.91 per diluted share, compared to a net loss of $30.7 million or $3.56 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 $2.4 million from $5.2 million for three months ended June 30, 2021 to $2.8 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 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 $47.2 million from a loss of $30.7 million for the three months ended June 30, 2021 to net income of $16.5 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 Transcontinental Realty Investors, Inc.

Transcontinental 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.

TRANSCONTINENTAL 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			511				601				817				2,068
Total revenue			7,770				10,795				15,557				22,623
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			2,061				3,090				4,592				5,736
Advisory fee to related party			2,446				4,661				5,451				6,910
Total operating expenses			10,617				16,020				22,530				30,074
Net operating loss			(2,847	)			(5,225	)			(6,973	)			(7,451	)
Interest Income			4,906				4,662				10,720				9,363
Interest expense			(5,060	)			(6,582	)			(10,087	)			(13,186	)
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			1,637				4,572				6,343				7,908
Gain (loss) on sale or write-down of assets, net			3,893				(24,445	)			15,041				(8,342	)
Income tax provision			(40	)			1,233				(68	)			1,193
Net income (loss)			16,621				(30,578	)			31,241				(7,691	)
Net income attributable to noncontrolling interest			(160	)			(155	)			(278	)			(410	)
Net income (loss) attributable to the Company		$	16,461			$	(30,733	)		$	30,963			$	(8,101	)
Earnings per share
Basic and diluted		$	1.91			$	(3.56	)		$	3.58			$	(0.94	)
Weighted average common shares used in computing earnings per share
Basic and diluted			8,639,316				8,639,316				8,639,316				8,639,316

 

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Transcontinental Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

Investor.relations@transconrealty-invest.com

Source: Transcontinental Realty Investors, Inc.

FAQ

What were the earnings results for TCI for Q2 2022?

Transcontinental Realty Investors reported a net income of $16.5 million for Q2 2022, compared to a net loss of $30.7 million in Q2 2021.

How much rent did TCI collect in Q2 2022?

TCI achieved a rent collection rate of approximately 97% in Q2 2022.

What is the occupancy rate of TCI properties as of June 30, 2022?

As of June 30, 2022, TCI's total occupancy rate was 90%, with multifamily properties at 93% and commercial properties at 69%.

What factors contributed to the increase in TCI's net income?

The increase in net income was primarily due to a $29.6 million arbitration settlement and an $18.9 million gain on foreign currency transactions.

What were the challenges faced by TCI in Q2 2022?

TCI faced a decline in rental revenues by $2.9 million due to the sale of properties, notably 600 Las Colinas and Toulon.