Seven Hills Realty Trust reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a decline in revenue and profitability compared to the same periods in 2023. Total revenue for the third quarter was $8.857 million, down from $9.798 million in the prior year, while revenue for the nine months decreased to $27.599 million from $28.235 million. The company experienced a significant drop in net income, reporting $3.479 million for the third quarter, a decrease of 53.5% from $7.473 million in the same quarter of 2023. For the nine months, net income fell to $12.941 million from $19.920 million, marking a 35% decline.
The decrease in income before income taxes was notable, with figures dropping to $3.490 million for the third quarter from $7.491 million in 2023, and to $12.968 million for the nine months from $19.985 million. Net income per common share also reflected this downturn, falling to $0.23 for the third quarter from $0.51, and to $0.87 for the nine months from $1.35.
The company's financial position showed a reduction in total assets, which decreased to $652.576 million as of September 30, 2024, from $731.525 million at the end of 2023. Loans held for investment also declined to $549.944 million from $622.086 million. Cash and cash equivalents decreased slightly to $82.197 million from $87.855 million.
Strategically, Seven Hills Realty Trust has been active in managing its loan portfolio, with total loan commitments decreasing to $594.421 million from $670.293 million. The company reported an increase in the allowance for credit losses, attributed to declining values in commercial real estate and unfavorable pricing forecasts. The provision for credit losses rose due to increased provisions for office loans.
In terms of operational cash flow, net cash provided by operating activities increased to $16.269 million for the nine months ended September 30, 2024, compared to $14.944 million in the previous year. The company also reported a significant turnaround in cash provided by investing activities, which amounted to $73.540 million, a stark contrast to the net cash used of $(10.702) million in 2023.
Seven Hills Realty Trust continues to operate under a management agreement with Tremont Realty Capital LLC, which receives a base management fee of 1.5% of the company's equity. The company declared regular quarterly distributions totaling $15.556 million, or $1.05 per common share, for the nine months ended September 30, 2024.
About Seven Hills Realty Trust
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