Parts of the congress center and complex confidence in real estate investment (FPI) Ryman Hospitality (NYSE: RHP) rose 19% in February, according to data from S&P Global Market Intelligence. The company reported earnings on February 26, but its stock price had started rising earlier in the month, so it was clear that something else was happening.
These incomes were bad enough. Fourth quarter revenue was down 71%, leaving annual revenue down 67%. Adjusted operating funds (FFO) – a metric REITs use the same way industrial companies use earnings – fell to a loss of $ 0.56 per share in the fourth quarter, from a profit of $ 1.84 in the same period of 2019. The numbers for the full year were just as rough, with an adjusted FFO loss of $ 2.71 per share versus a positive $ 6.86 per share in 2019. The stock plunged on the news, this which is hardly shocking given the dismal figures.
However, at the time of this report’s publication, shares of Ryman Hospitality had already risen significantly for the month. What drove the REIT’s share price higher was likely a combination of factors suggesting an improving outlook for its future.
First, the vaccine rollout makes investors think we may soon be able to resume the in-person activities that the pandemic has forced us to put on hold. And, in company-specific news, Ryman was able to sell off debt earlier this month. It all started with plans to sell bonds for $ 500 million, but demand saw him increase that number to $ 600 million.
Better yet, the interest rate he pays on the new bonds is 4.5%, compared to the 5% rate on the $ 400 million debt in 2023 that he paid off with the proceeds of the debt. new issue. A portion of the additional cash from the debt sale was used to reduce the REIT’s revolving debt, thereby strengthening its balance sheet. The sale also pushed back Ryman’s debt maturities, as the new issue does not mature until 2029. This gives her extra breathing space while she works on resuming business.
It is a difficult period for convention centers and the hotel industry. Until business travel rebounds and more organizations once again feel comfortable hosting large in-person gatherings, Ryman Hospitality will be struggling to get its conference business back on its feet. And while management were happy to announce that they had booked almost 60% of the nights canceled due to the coronavirus, by the end of the year they were burning $ 12 million in cash per month. Things are improving, but there is still a long way to go here.
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