VICI Properties became the Las Vegas Strip’s biggest landowner in the third quarter, following its March masterstroke (agreeing to buy Las Vegas Sands Corp.’s properties) with an even bigger August masterstroke (agreeing to buy out rival gaming REIT MGM Growth Properties for $17.2 billion).
Total investment in 48 months: $30 billion.
And during Thursday’s third-quarter conference call, President John Payne said VICI’s wheels keep turning.
“VICI does not go on vacation or wait for the phone ring after announcing or closing a transaction,” he said during the call with analysts and journalists. “Our primary day-to-day operations consist of sourcing, underwriting, and funding accretive acquisitions. To that end, we’re as busy as we’ve ever been, building our pipeline. … As we look forward, we will strive to execute across the many growth pillars we believe will make VICI a stronger company, while driving accretive AFFO per-share growth for shareholders.”
However, the real estate investment trust posted cash flow lower than Wall Street had expected and lowered its funds-from-operation forecast from February.
In a statement, VICI said its funds from operation were $161.9 million for the quarter, or 28 cents per share, for the three months ended Sept. 30, down from $398.3 million, or 74 cents per share, a year earlier. The latest result missed the 45-cents-per-share consensus estimate of analysts surveyed by Seeking Alpha.
Funds from operation are a closely watched fiscal yardstick for real estate investment trusts that take net income and add back depreciation and amortization.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, rose 12.9% to $257.4 million from $227.9 million.
Revenue rose 10.6% to $375.7 million from $339.7 million and matched the estimate of Seeking Alpha-polled analysts.
VICI in July reaffirmed its February 2021 earnings guidance of adjusted funds from operation from $1.01 billion to $1.04 billion, or $1.82 to $1.87 per diluted share, for the year ending Dec. 31.
But Thursday, VICI lowered the estimate to between $1.79 and $1.80 per diluted share, reflecting the dilutive effect of the issuance of 26.9 million shares from the settlement of the REIT’s June 2020 forward-sale agreement and 65 million shares in this past September’s equity offering.
VICI CEO Edward Potoniak, like Payne, touted deals on the call, calling the third quarter of 2021 “the most active and transformational quarter in our four-year history.” VICI was spun off from Caesars Entertainment in 2017 as a result of Caesars bankruptcy plan.
VICI shares rose 26 cents, or 0.87%, to close at $30 on the New York Stock Exchange. The shares have risen 25.9% in 2021.
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