Sonida Senior Living (NYSE: SNDA) is nearing pre-pandemic occupancy levels, and outgoing CEO Kim Lody is confident that the company will return to those levels by the end of the year.
Lody’s confidence is underscored by occupancy gains made in the second quarter of 2022. Weighted average occupancy for the operator’s owned community portfolio rose to 83.2% in the second quarter of the year, representing a gain of 460 basis points over the same time in the previous year; and just 50 basis points away from where the operator was at the end of 2019.
Sonida Senior Living manages 76 communities across 18 states. The operator’s share price gained 4.3% Friday, ending the day at $18.20.
Some of the company’s leading indicators are now stronger than they were before the pandemic, with leads up 18%, tours up 32% and move-ins up 33% since the period right before the pandemic began.
At the same time, the company’s resident revenue grew to $52.0 million in the second quarter, amounting to an 11.6% gain over the prior year. The company’s net operating income (NOI) margins increased 40 basis points from that time, to 20.6% in the second quarter of this year.
Many senior living operators increased resident rates by a relatively large percentage this year, and Lody believes that trend will continue.
“Just like many in the industry, we’re very optimistic about the pricing power in senior living, not only through the rest of this year but into 2023,” she said.
Another tailwind for Sonida is the fact that the company is having continual success trimming agency labor use, and Lody noted that the operator has expanded its community workforce by about 6% since the start of the year.
Helping to drive those results, Lody said, is the execution of three main operational “pillars”: prioritizing health and wellness of staff, a “people-centric” corporate culture and creating new and unique programming for residents.
“Continuing our unwavering focus on these three pillars will enable us to achieve pre-pandemic occupancy in our portfolio by the end of 2022, while also continuing to expand NOI margin sequentially throughout the year,” she said Friday during the company’s second-quarter earnings call with investors and analysts.
For Lody, who is due to leave her post as CEO at the beginning of September and hand the reins over to current-COO Brandon Ribar, the recent positive results are a good send-off. They are also a sign that her SING recovery strategy — which stands for stabilize, invest, nurture and grow — is paying off after years of steady execution.
The outdoing CEO highlighted several achievements during her four-year tenure, including pruning the company’s portfolio to “a core set of high-performing assets,” overhauling the company’s sales and marketing practices and guiding the operator through its rebranding from Capital Senior Living to Sonida Senior Living.
“Brandon and I have celebrated the achievements and persevered through the troughs while working shoulder to shoulder these last three years on many key operational and financial items that have transformed the company and set the foundation for future growth,” Lody said. “Brandon’s leadership skills, operational expertise and business acumen will serve the company and the industry very well in the future.”
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