O - Orion Office Q4 FFO beats sees 2023 FFO slipping as it optimizes portfolio

2023-03-08 17:04:23 ET

Orion Office REIT ( NYSE: ONL ) Q4 earnings topped the average estimate of two analysts by a penny as the office landlord completed its first full year as an independent REIT. The company was spun off from Realty Income ( O ) on Nov. 12, 2021.

The company expects 2023 core FFO per share of $1.55-$1.63 (midpoint $1.59) vs. $1.58, the average of two analyst estimates, and $1.76 reported for 2022.

In addition, the company expects 2023 G&A expenses of $18.75M-$19.75M compared with $15.9M in 2022, and net debt-to-adjusted EBITDA of 4.3x-5.3x vs. 4.06x at Dec. 31, 2022.

Q4 core FFO per share of $0.41, just tops $0.40, the average of two analyst estimates. That compared with $0.42 in Q3 and $0.47 in Q4 2021.

Q4 revenue of $50.3M, trailing the $50.7M average estimate, $51.8M in the prior quarter and $40.8M in the year-ago quarter.

ONL shares slipped 0.6% in Wednesday after-hours trading.

During 2022, Orion Office ( ONL ) closed on the sale of 11 non-core properties as it seeks to optimize its portfolio. Still the company completed 0.8M square feet of lease renewals, expansions, and new leases across 11 properties during the year.

"As we execute on our plans in the coming years, we will work to effectively navigate the prolonged uncertainty around the return to the office across the country, while managing our balance sheet and financial flexibility to build sustainable long-term value," said CEO and President Paul McDowell.

Net debt fell to $536.1M at Dec. 31, 2022 compared with $564.3M at Sept. 30, 2022.

Q4 total operating expenses of $63.1M vs. $97.7M in Q3 and $92.0M in Q4 2021.

Q4 adjusted EBITDA of $30.7M fell from $32.1M in the prior quarter and $30.0M in the year-ago quarter.

Conference call at 10:00 AM ET.

Earlier, Orion Office REIT ( ONL ) FFO of $0.41 beats by $0.01, revenue of $50.29M misses by $0.39.

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