Yahoo Finance Five Point Holdings LLC (FPH) (Q1 2024) Earnings Call Transcript Highlights: Strong Performance ...
Net Income: $6.1 million for Q1 2024.
Revenue: $9.9 million, including $8.7 million from management services.
Equity and Earnings from Investments: $17.7 million from Great Park Venture.
SG&A Expenses: $12.9 million, down 6.5% from Q1 last year.
Debt to Total Capitalization: Improved to 20.9%.
Liquidity: $358 million, with $233 million in cash and $125 million available from a revolving credit facility.
Land Sales: 11.6 acres at Great Park sold for $74.6 million, at $6.4 million per acre with a 60% profit margin.
Home Sales: 69 homes at Great Park; 62 homes at Valencia.
Credit Rating: Upgraded by S&P to B- with a stable outlook.
Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Dan, can you discuss the near-term conversations you've had with builders, especially given the rising interest rates and potential market slowdown? A: Daniel Hedigan, CEO of Five Point Holdings LLC, noted that despite the financial market conditions, the chronic shortage of buildable, entitled land is driving strong bids and active participation from builders. The company is not experiencing any drop-off in builder interest due to the current financial conditions, thanks to the unique position of new home builders to sustain sales.
Q: Regarding the Great Park sale this quarter, the price per acre was significantly higher than last year. Is there anything unique about this parcel, or is it reflective of broader inflation on lot prices? A: Daniel Hedigan, CEO, explained that the high price per acre is reflective of the current market conditions and not unique to the parcel. He confirmed that future sales are expected to be within this price range.
Q: With the distribution at the Great Park, is the legacy interest paid out in full at this point? A: Kim Tobler, CFO of Five Point Holdings LLC, clarified that there is about $10 million left to be paid out this year, following the recent distributions.
Q: In Valencia, with the inventory running low in the first village, how is the company planning to sustain business and cash flow? A: Daniel Hedigan, CEO, mentioned that despite the low inventory in the first village, there are additional areas with active selling and upcoming openings which will continue to support sales and cash flow. The company is actively selling in Valencia this year and expects to continue into the next year.
Q: Can you comment on the size of the current Board and any interest in making it more nimble and responsive? A: Daniel Hedigan, CEO, stated that the Board size has been consistent at nine members during his tenure and is functioning well. He deferred any decisions about changes to the Board itself, emphasizing that it is supportive and active in its current composition.
Q: What is the situation with Luna Park and its impact on site sales? A: Daniel Hedigan, CEO, explained that Luna Park is a new large community with 13 programs and 799 home sites. The first program has opened and sold out, with the remaining programs set to open this year. This new community is expected to contribute positively to site sales as it progresses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
