Sienna Senior Living Q1 2025 slides: 27% OFFO growth, $600M asset expansion underway

Introduction & Market Context

Sienna Senior Living Inc. (TSX:SIA) presented its Q1 2025 financial results on May 7, 2025, revealing robust growth across key metrics and significant progress on its expansion strategy. The company’s stock closed at $17.04 on May 6, down slightly by 0.53% ahead of the earnings call, but still trading near its 52-week high of $17.60, reflecting continued investor confidence following strong performance in previous quarters.

The Q1 results demonstrate Sienna’s ability to maintain the momentum established in Q4 2024, when the company exceeded revenue forecasts with a 12.5% year-over-year increase. This performance comes amid favorable demographic trends in the Canadian senior living market, with limited new supply creating opportunities for established operators.

Quarterly Performance Highlights

Sienna reported impressive financial results for Q1 2025, with significant growth across all key metrics. The company achieved a 12.1% increase in total adjusted revenue and an 8.5% increase in total adjusted same property net operating income (SP NOI) compared to Q1 2024.

Operating funds from operations (OFFO) and adjusted funds from operations (AFFO) showed remarkable growth of 27.5% and 27.1% respectively, while OFFO per share increased by 8.3% and AFFO per share by 7.7%.

As shown in the following financial results summary:

The retirement segment was a particular standout, with adjusted same property NOI growth of 16.7% year-over-year, while the long-term care segment delivered a more modest but still positive 2.2% growth in same property NOI.

Occupancy rates in the retirement segment continued their upward trajectory, reaching 93.1% by April 2025, up from 87.5% in May 2022. This steady improvement demonstrates the effectiveness of Sienna’s operational strategies and growing demand for senior living accommodations.

As illustrated in this occupancy trend chart:

The company has also made significant strides in operational efficiency, reporting a 30% reduction in team member turnover in 2024 and a 70% reduction in agency costs in Q1 2025 compared to the same period last year. These improvements not only enhance service quality but also contribute to margin expansion.

Strategic Growth Initiatives

Sienna is executing an ambitious growth strategy, with plans to expand its platform to over 100 properties through a series of strategic acquisitions and developments. The company is in the process of adding approximately $600 million in assets, with several properties either already closed or anticipated to close by Q3 2025.

The growth pipeline includes properties across multiple Canadian provinces, enhancing Sienna’s geographic diversification:

The portfolio expansion includes the Wildpine Retirement Residence in Ottawa, Nicola Lodge in Metro Vancouver, Airdrie Care Community in the Calgary Metropolitan Region, and several other properties across Ontario and Alberta. This strategic growth positions Sienna to capitalize on increasing demand for senior living accommodations across Canada.

As shown in these images of Sienna’s expanding property portfolio:

Financial Position & Outlook

Sienna has strengthened its financial position to support its growth initiatives. The company raised $144 million in equity in February 2025 and reported $445 million in liquidity as of March 31, 2025. Additionally, Sienna holds $1.1 billion in unencumbered assets, providing significant financial flexibility.

The company’s debt maturity schedule is well-structured, with manageable amounts coming due in the near term:

Looking ahead, Sienna has established ambitious growth targets for 2025, including:

• Retirement segment same property NOI growth of approximately 10% or higher
• Retirement segment same property occupancy target of approximately 95% by Q1 2026
• Retirement segment same property margin growth of 100-150 basis points
• Long-term care segment same property NOI growth in the low single-digit percentage range

These targets align with the guidance provided during the Q4 2024 earnings call, where management projected a 95% occupancy rate within 12 months and margin expansion of 100-150 basis points.

Industry Fundamentals

Sienna’s growth strategy is supported by compelling demographic trends in the Canadian senior living market. The 85+ age group in Canada is expected to double between 2021 and 2035, creating significant demand for senior housing and care services.

At the same time, supply remains constrained, with construction starts representing less than 1% of existing inventory. Additionally, approximately 1.2% of existing senior housing units in Canada are removed from private pay inventory annually due to obsolescence, further tightening supply.

These market dynamics create favorable conditions for established operators like Sienna:

The combination of increasing demand and limited new supply positions Sienna well for continued growth in occupancy rates and pricing power, supporting the company’s financial targets for 2025 and beyond.

Forward-Looking Statements

While Sienna’s Q1 2025 results and growth initiatives paint an optimistic picture, investors should consider potential risks including supply chain disruptions that could impact development timelines, inflationary pressures on operating costs, and regulatory changes in the healthcare sector.

However, the company’s strong liquidity position, strategic geographic diversification, and focus on operational efficiency provide a solid foundation to navigate these challenges while capitalizing on the favorable demographic trends driving long-term demand for senior living services.

Full presentation:

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