Modiv Industrial (MDV) Q3 2024 earnings summary

Executive summary

• Portfolio consists of 43 properties, 77% industrial by ABR, with 98% occupancy and a 13.8-year weighted average lease term as of September 30, 2024.

• Rental income for Q3 2024 was $11.6 million, down from $12.5 million year-over-year, mainly due to property dispositions, partially offset by a new acquisition.

• AFFO for Q3 2024 was $3.7 million, or $0.34 per share, up $0.01 year-over-year and above consensus expectations, aided by share repurchases.

• Management emphasized disciplined capital allocation, focus on retail investors, and patience in a volatile market.

• Announced an increase in the annual dividend rate to $1.17 per share, paid monthly starting January 2025.

Financial highlights

• Rental income decreased year-over-year due to the sale of 16 properties, offset by one new acquisition; nine-month rental income was $34.8 million, up 1%.

• Net loss attributable to common stockholders for Q3 2024 was $1.51 million (EPS $(0.18)), improved from $(6.5) million (EPS $(0.86)) in Q3 2023.

• FFO for nine months was $11.7 million ($1.04/share), up from $7.8 million ($0.71/share) in 2023; AFFO was $10.9 million ($0.97/share), up from $10.2 million ($0.92/share).

• Interest expense rose to $6.1 million in Q3 2024 (from $2.9 million), mainly due to swap losses and higher debt balances.

• Adjusted EBITDA for Q3 2024 was $9.65 million, up from $8.47 million in Q3 2023.

Outlook and guidance

• Management expects rental income, depreciation, and interest expense to increase for full year 2024 due to recent acquisitions, partially offset by asset sales.

• No debt maturities before January 2027; 100% of $281 million debt is fixed rate at 4.52%.

• Adequate liquidity expected for the next 12 months and beyond, with $150 million available under the credit facility.

• Targeting a 100% industrial manufacturing property portfolio over the intermediate term.

• Working on an UPREIT transaction for a Jacksonville, FL property, potentially issuing $6 million in OP units at $17.00 per share for an unlevered, accretive acquisition.