In This Article:
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Distributable Earnings: $44 million or $0.31 per share of common stock for Q3.
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GAAP Net Loss: $95 million or negative $0.69 per diluted share of common stock.
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Loan Portfolio: Comprised of 45 loans totaling $7.8 billion.
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Weighted Average Unlevered Yield: 8.5%.
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Loan Repayments: $953 million of proceeds from full and partial loan repayments during the quarter.
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Debt-to-Equity Ratio: 3.5 times at quarter end.
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Total Liquidity: Over $300 million, including cash on hand and undrawn credit capacity.
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Book Value Per Share: $12.73, excluding general CECL allowance and depreciation.
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CECL Allowance: $381 million, representing $2.74 per share of book value.
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Dividend: Q3 dividend set at $0.25 per share of common stock.
Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Apollo Commercial Real Estate Finance Inc (NYSE:ARI) has committed over $1.1 billion to new vintage loans in the past nine months, indicating strong investment activity.
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The company received $1.7 billion in loan repayments year-to-date, showcasing effective capital recovery.
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ARI's portfolio at quarter-end was comprised of 45 loans totaling $7.8 billion, reflecting a robust loan portfolio.
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The company reported distributable earnings of $44 million or $0.31 per share, demonstrating solid financial performance.
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ARI successfully leased the retail component at 111 West 57th Street to Bonhams, enhancing the property's value and future revenue potential.
Negative Points
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ARI reported a GAAP net loss of $95 million or negative $0.69 per diluted share, primarily due to a $128 million realized loss from a loan resolution.
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The Massachusetts hospital loan remains a challenge, with two hospitals closed and ongoing legal proceedings regarding eminent domain.
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Interest expense increased to $134 million from $128.5 million last quarter, despite stable debt balances, impacting profitability.
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A EUR200 million loan secured by German office assets was downgraded to a risk rating of 4, indicating potential credit risk.
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The company's debt-to-equity ratio is 3.5 times, which may limit financial flexibility and increase risk exposure.
Q & A Highlights
Q: Can you update us on the status of the Massachusetts loan and the collateral still on the books? A: We have two hospitals that were closed still on our books and a $41 million loan against one of the hospitals sold. The borrower on this loan is Lifespan, a BBB+ rated company. We have about $60 million of assets on the books, including the properties and the note.