BRT Apartments Corp. :BRT-US: Earnings Analysis: Q4, 2017 By the Numbers : December 18, 2017

BRT Apartments Corp. reports financial results for the quarter ended September 30, 2017.

We analyze the earnings along side the following peers of BRT Apartments Corp. – Apartment Investment and Management Company Class A, Mack-Cali Realty Corporation, AvalonBay Communities, Inc., Essex Property Trust, Inc., Preferred Apartment Communities, Inc., Mid-America Apartment Communities, Inc., Camden Property Trust and Independence Realty Trust, Inc. (AIV-US, CLI-US, AVB-US, ESS-US, APTS-US, MAA-US, CPT-US and IRT-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 28.39 million, Net Earnings of USD 5.46 million.
  • Gross margins narrowed from 27.69% to 20.73% compared to the same period last year, operating (EBITDA) margins now 16.71% from 14.93%.
  • Year-on-year change in operating cash flow of 114.61% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth due to contribution of one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-09-30 2017-06-30 2017-03-31 2016-12-31 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 28.39 26.78 24.81 25.5 24.76
Revenue Growth (%YOY) 14.66 15.46 -0.15 9.87 17.76
Earnings (mil) 5.46 -3.4 -4.23 15.77 2.91
Earnings Growth (%YOY) 87.86 -162.08 -139.68 875.32 -15.4
Net Margin (%) 19.24 -12.7 -17.04 61.86 11.74
EPS 0.39 -0.24 -0.3 1.13 0.21
Return on Equity (%) 2.32 -1.51 -1.94 7.49 1.48
Return on Assets (%) 2.21 -1.47 -1.97 7.32 1.4

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Market Share Versus Profits

Revenues History
Earnings History

BRT-US’s change in revenue this period compared to the same period last year of 14.66% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that BRT-US is holding onto its market share. Also, for comparison purposes, revenues changed by 6.00% and earnings by 260.52% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s gross margins showed no year-on-year improvement. In spite of this, the company’s earnings rose, influenced primarily by the improvement in operating margins (EBITDA margins) from 14.93% to 16.71%. For comparison, gross margins were 22.17% and EBITDA margins were 15.27% in the last period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

BRT-US’s change in operating cash flow of 114.61% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Margins

The company’s operating (EBIT) margins contracted from -12.11% to -14.50%. In spite of this, the company’s earnings rose. This was influenced primarily by one-time items, which improved pretax margins from 26.26% to 41.94%.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for BRT Apartments Corp.

Company Profile

BRT Apartments Corp. is a real estate investment trust, which engages in the ownership, operation, and development of multi-family properties, the ownership, operation and development of commercial, mixed use and other real estate assets, and real estate lending. It operates through the following business segments: Multi-Family Real Estate and Other Real Estate. The Multi-Family Real Estate segment includes the ownership, operation, and development of the multi-family properties. The Other Real Estate segments involves in the ownership, development, operation and disposition of the real estate assets. The company was founded in June 1972 and is headquartered in Great Neck, NY.

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