Sienna Senior Living Inc.

Ladies and gentlemen, welcome to Ciena Senior Living Inc's Q4 2024 conference call. Today's call is hosted by Nitin Jain, President and Chief Executive Officer, and David Hung, Chief Financial Officer of Ciena Senior Living Inc. Please be aware that certain statements or information discussed today are forward-looking and actual results could differ materially. The company does not undertake to update any forward-looking statement or information. Please refer to the forward-looking information and risk factor sections in the company's public filing, including its most recent MDA and A, MD&A, and AIF for more information. You will also find more fulsome discussion of the company's results in its MD&A and financial statements for the period, which are posted on CDAR Plus and can be found on the company's website, cnliving.ca. Today's call is being recorded and a replay will be available. Instructions for accessing the call are posted on the company's website and the details are provided in the company's news release. The company has posted slides which accompany the host's remarks on the company website under events and presentations. With that, I will now turn the call over to Mr. Jain. Please go ahead, Mr. Jain.

Thank you. Good morning, everyone, and thank you for joining us today. We had a great start to 2025. We maintained our growth momentum, which is reflected in our financial results. So far, we are also on track to add nearly $600 million of assets through acquisitions and developments by the third quarter, and we see significant potential for future growth throughout the balance of the year. Our increasing scale comes at a time when demand for senior living is accelerating and supply remains highly constrained. This positions us extremely well for continued growth. With respect to Ciena's operating results, our key performance indicators continue to trend in a positive direction in the first quarter. At just the same property, NOI increased by 16.7% in the retirement segment and 2.2% in the long-term care segment. On retirement, increasing occupancy and rental rate growth were the key drivers of the double-digit increase. Average same-property occupancy was up 260 basis points year-over-year, and it reached 92.5% in the first quarter, and we remain confident to reach a stabilized occupancy target of 95% by Q1 2026. Our robust sales platform and focused marketing campaigns continue to generate strong interest in our residences. Our call center leads remain strong, and our recent national open house had significant higher attendance and tours than in recent years. In addition, we remain focused on maintaining excellent relationships with healthcare and business partners in the local communities of our residences. On long-term care, our fully occupied homes with growing wait lists added to the continued stability of this segment, which reinforces the strength of our operating platform. Moving to slide six, 2025 is shaping up to be the year of considerable growth through acquisitions and developments. By the third quarter, our platform will exceed 100 properties, and we will not end there. To date, we have closed $250 million of acquisitions in British Columbia, Alberta, and Ontario, and just yesterday announced an $85 million acquisition of a Class A retirement residence in Ottawa with an anticipated closing date this summer. The residence is currently 93% occupied and we feel confident with our platform we will get it to stabilize occupancy of 95% within the next 12 months. With closing of our portfolio acquisition in Alberta at the beginning in April, we established a platform in one of Canada's fastest growing provinces. This acquisition of four properties has provided immediate scale and positions as well for continued growth in Alberta. Each acquisition is expected to be immediately accretive to Ciena's AFFO per share, and we remain very active in the acquisition market and see strong potential to create long-term value as we continue to scale our business. On the development side, we are ahead of schedule to complete Ciena's first two long-term care redevelopment projects in North Bay and Brantford. Both projects remain on budget and will be completed this summer. With no lease-up risk, the redevelopments would immediately contribute to CNA's financial performance upon opening. Each project is expected to grow CNA's AFFO per share by about 3%. At our Brantford location, we are also nearing the completion of a new 147 retirement residence. By developing a retirement residence next to our long-term care redevelopment, we have enhanced the economic viability of this $140 million project with an expected development yield of 8.5%. Moving to our team members, investing in our team members and building a workforce that is fully aligned is fundamental to growth and scaling our operations. We are particularly proud of our share ownership program, which allows team members to participate in the growth and success of Ciena. Starting this year, we have expanded the program beyond this original one-time award. Under Ciena's new SOAR for service, team members will receive additional shares as they celebrate milestone work anniversaries working for the company. Programs like SOAR ensure a strong sense of ownership and shared purpose among our team members and have delivered clear results. For two years in a row, we are able to reduce turnover by about 30%, which has led to a significant reduction in the use of agency staff, and year-over-year agency costs are down nearly 70%. With that, I'll turn it over to David for an update on our financial results.

Thank you, Nitin, and good morning, everyone. I will start on slide nine for financial results. In my commentary, in accordance with our MD&A disclosure, I will make reference to our operating results excluding one-time items in order to provide a clearer picture of Siena's underlying performance. In Q1 2025, total adjusted revenues increased by 12.1% year-over-year to $241.8 million. This increase was largely due to occupancy and rental rate growth, as well as increased care revenue in the retirement segment. including higher flow-through funding for direct care and higher private accommodation revenues. Total adjusted same property NOI increased by 8.5% to $42.5 million in Q1 2025, including by 16.7% in our retirement segment and by 2.2% in the long-term care segment. In the retirement segment, adjusted NOI increased by $2.9 million in Q1 2025, largely as a result of improved occupancy and rental rate growth. These improvements, in addition to generating higher care revenue and maintaining a strict focus on operating expenses, supported the year-over-year 210 basis point improvement of our same property operating margin. We expect the margin expansion to continue as we get closer to our 95% occupancy target and achieve additional efficiencies through scale. In addition, we are progressing well with respect to our asset optimization initiatives, five assets in the company's retirement portfolio that will benefit from a range of initiatives. These initiatives target a better market fit and include renovations, the change in suite mix, additional services, or the alternative use of a property. Occupancy in our optimization portfolio increased by 500% In the long-term care segment, NOI increased by half a million dollars and reflects the segment's stability, which is supported by fully occupied homes and growing wait lists. During Q1 2025, operating funds from operations increased by 27.5% to $24.7 million compared to last year, primarily due to higher NOI. OSFO per share increased by 8.3% to $0.287 in Q1 2025. Adjusted funds from operations increased by 27.1% to $22.9 million compared to the prior year. The increase was mainly due to higher OFFO and a decrease in maintenance capital expenditures offset by lower construction funding income. AFFO per share increased by 7.7% to 26.6 cents in Q1 2025. Our Q1 2025 AFFO payout ratio was 91%, a 390 basis point improvement compared to Q1 2024. Excluding the impact of the February share offering, our payout ratio was 86% in Q1 2025. Moving to slide 10, throughout the first quarter, we further strengthened our financial position and balance sheet. We ended the quarter with $445 million in liquidity, $1.1 billion of unencumbered assets, with no major debt maturities until Q1 2026. At the end of February, we successfully raised $144 million in equity, and we are on track to deploy our cash on hand into accretive acquisitions and developments. Yesterday, we announced the acquisition of Hazeldean Gardens in Ottawa. We will acquire this 172 suite retirement residence at a purchase price of $85.25 million and at an investment yield of 6.33% with additional upside through synergies. Hazeldean is our second acquisition in the Ottawa region this year and will be acquired at a significant discount to replacement cost. Our expansion in Ottawa reflects our confidence in this market where our existing portfolio has shown an impressive performance in recent quarters. With that, I will turn the call back to Nitin for his closing remarks.