Vici Properties ((VICI)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Vici Properties presented a generally positive sentiment, highlighting strategic growth initiatives and robust performance in key areas like Las Vegas. Despite these positive aspects, the company acknowledged ongoing challenges, particularly in identifying acquisition opportunities in the gaming sector due to fluctuating interest rates.
Strategic Partnership with Cain International and Eldridge Industries
Vici Properties announced an exciting new partnership with Cain International and Eldridge Industries, marking a significant step forward with their investment in the One Beverly Hills development. This strategic and financial collaboration is anticipated to open the door to numerous future investment opportunities, reinforcing Vici’s growth trajectory.
Strong Las Vegas Performance
Las Vegas continues to be a beacon of success for Vici Properties, with tourism reaching unprecedented levels in 2024. The city saw 58 million airline passengers and 42 million visitors, marking a 2% increase from the previous year. This surge in tourism has prompted operators to invest nearly $1 billion into Vici’s Las Vegas properties, underscoring the area’s thriving market.
Improved Financial Stability
Vici Properties has achieved a significant milestone in financial stability by securing an investment-grade credit rating from Moody’s. This achievement completes their upgrade process across all three major agencies and enhances their access to capital, positioning the company well for future growth.
AFFO Growth
The company reported a 5.1% increase in AFFO per share for 2024 and anticipates continued growth into 2025, with guidance suggesting a 3.3% rise. This growth indicates Vici’s strong financial performance and optimistic outlook for the coming year.
Limited Gaming Acquisition Opportunities
Despite success in other areas, Vici faced challenges in the gaming sector, with a scarcity of attractive real estate acquisition opportunities in 2024. As a result, the company has shifted its focus towards development funding as a strategic alternative.
Interest Rate Environment Challenges
The current interest rate environment has presented challenges, particularly due to the volatility of the ten-year interest rate. This uncertainty has complicated the pricing of permanent asset investments, posing a hurdle to Vici’s investment strategy.
Forward-Looking Guidance
In their forward-looking guidance for 2025, Vici Properties expects AFFO to range between $2.485 billion and $2.555 billion, translating to $2.32 to $2.35 per diluted common share, reflecting a projected year-over-year AFFO per share growth of 3.3%. The company’s robust balance sheet, with total liquidity of $3.3 billion and a net debt to annualized fourth-quarter adjusted EBITDA of approximately 5.3 times, positions it well within their target leverage range.
In summary, Vici Properties’ earnings call reflects a positive outlook bolstered by strategic partnerships and strong performance in Las Vegas. While challenges in gaming acquisitions and interest rate volatility remain, the company is well-positioned with solid financial metrics and a promising growth forecast for 2025.
