Q1 2020 Earnings Call
Thank you for sending.
This is the conference operator.
Welcome to the Extendicare first quarter Twentytwenty.
This conference call.
As a reminder.
All participants I listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
He joined the question Q.
You'll be press Star then one.
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I would now like to turn the conference over to Steve Young.
Right.
<unk> Vice President Investor.
Yes.
Please go ahead.
Thank you.
Good morning, everyone. Welcome to extend occurred first quarter results conference call.
With me today as it stands occurs president and CEO my career.
And senior Vice President and CFO, David Baker.
Our first quarter results were disseminated yesterday in our available on our website.
The audio webcast of today's call is also available on our website along with an accomplished slide presentation, which viewers may advanced itself.
A replay of the call will be available later this afternoon until May 29.
We play numbers and Poscos had been provided in our press release.
An archive recording of this call will also be available on our website.
Before we get started please be reminded that today's call may include forward looking statements regarding our future operations.
Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today.
We have identified such factors that are public filings with the securities regulators.
I suggest that you referred to.
Right.
As we discussed our performance please bear in mind that all figures right Canadian.
Okay.
Unless otherwise noted.
With that I'll turn the call over to Michael.
Thanks Julien.
Good morning, everyone.
Before we get into our.
Hi, good results I want to take a moment to talk about the current Cove at 19 situation review, how we are managing through this pandemic and recognize the outstanding work of our exceptional team.
Our residents clients in front line workers have borne the brunt of this pandemic.
And we remain focused on doing everything possible to protect them. While also continuing to provide the high quality care and support they have come to.
Back from.
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Well the vast majority of our home.
Yes.
The virus it.
Our community has.
Doing great law.
[music].
Thanks.
Our sincere condolences or with all of the families and friends both in our community and outside of that who have lost a lot one to this aggressive virus.
Our hearts are with them in the is exceptionally difficult time.
As of today of our 69 owned long term care homes and retirement you mean.
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13.
Long term care.
To retirement.
In communities have one or more active Kate.
Oh good.
With the majority of these outbreak.
Limited to less than 10 residents.
Sorry.
In addition.
Five long term care homes previously an outbreak have been declared theory the virus by.
No.
Okay.
We're also working with our Extendicare exists.
Assisted clients.
The manage any outbreaks in their homes.
As conditions in government directors have evolved we've adapted our operations to safeguard those in our care and to protect our 22000 employees.
We have implemented enhanced infection control and management protocols throughout our operations and adapted our procedures and staffing models to various government directives.
We've limited all essential visitors to our homes.
Put in place a universal masking policy.
<unk> increased use of personal protective equipment across the organization.
Implemented enhance screening of all residents.
Staff within our long term.
Gary home retirement community.
As well as enhanced.
Oh, well in our own.
Is there.
Yeah.
Right.
And testing because.
Regionally available we have ramped up testing of both residents and staff, improving our ability to detect and quarantine infected persons.
We will continue to focus on the safety of our residents clients and staff as our top priority.
Our staff have shown tremendous strength and compassion during this difficult time off and working long hours and covering shifts for coworkers.
Their commitment is truly inspiring.
That makes a world of difference to those in our care and to the families that are unable to visit their loved ones.
We're very happy to see our staff received a recognition they deserve in the form of pandemic premium pay funded by several provincial governments.
We hope that all governments will.
[music].
Practice.
To further recognize the extraordinary effort of all employees walk.
Senior living facilities across Canada.
We were pleased.
Participate as the founding member.
Into.
Yeah.
Established to.
Both.
Financial.
Yeah.
Safety need a frontline workers.
We are a founding partner and the.
We announced.
Senior living.
Fund.
Yeah.
Provides financial support for workers in the senior living sector in recognition of Derek.
Extraordinary.
I Dream.
Oh good.
In crisis.
The fund will provide onetime financial assistance to Canadian employees.
Any.
And then you're living operator, who work in either long term care or retirement.
For emergency or unforeseen expenses.
Sic code at 19.
Extendicare along with the other founding.
Donated half a million dollars.
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To establish the fun.
With a starting $2 million.
Yeah.
Yeah.
The board of Directors then they care will also be.
Divvying up.
Portion of their fees for the balance.
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Well.
20 to add a further 200000 dollar contribution.
Okay.
The fun.
Yes.
The second initiative is the Canadian alliance to protect any CWIP senior.
For.
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Through this initiative Extendicare came together with a number of senior living operators to act as a joint purchasing group to sourcing supply much needed personal protective equipment for frontline employees.
We've leveraged our purchasing hast and procurement expertise to buy difficult to find equipment and make it available to smaller senior living operators.
As we work through this challenging time, we continue to monitor developments and government directives carefully.
We are adapting our response to best protect our people to keep the virus out of our homes and communities and to move those homes that have experienced an outbreak into recovery.
With that.
I want to turn to our first quarter results.
Starting on slide.
Yeah.
For ease of comparisons throughout this call, David and I will be discussing our results.
Excluding the impact of our.
He home health care operations.
Which we exited as previously announced in January of this.
Your.
Our first quarter results.
Good Good Cross Airlines a.
With the exception of Paramount.
Revenue in nano why increased in our long term care retirement living and other business segments.
These were offset by lower volumes and higher operating costs in the home health care segment.
[music].
The financial impact of coal with 19 started to be felt in the latter half of.
We felt this most acutely in our Paramount operations, where we have experienced a 22% decline in our average daily volumes.
Since the middle of March.
At the same time.
Our back office in frontline operating costs have increased as our home care offices coped with the upheaval that followed the pandemic declaration.
Our retirement living operations have experienced a decline in occupancy has access to our retirement communities has been restricted.
Our long term care segment also experienced modest declines in occupancy, but the funding framework in Ontario protects income when occupancy is impacted by an outbreak and we anticipate the same to be true in other provinces in which we operate.
Given the uncertainty created by Covance 19, we have taken steps to improve our liquidity during and following the quarter, including securing additional mortgage financings and deferring nonessential capital expenditures.
We continue to monitor the financial impact of coal at 19, including the welcome relief marriage.
And now.
By various levels.
Okay.
Across Canada.
We believe that the financial impact today, we are experiencing will reverse as we emerge from the pandemic.
However.
Due to the uncertainty of its duration and magnitude as well as governments response to it.
It is difficult to predict the extent of its impact on our.
Okay and financial results in condition.
Turning to slide five.
We continue to implement our paramount transformation agenda to approve efficiency.
Central to this has been the implementation of our new cloud based system aimed at improving our ability to meet the increasing demand for home health care services with improved scheduling automated work processes reduce staff turnover and better support.
For our.
For.
Okay.
As a result of covert 19, we decided to pause the implementation of our new system, leaving Alberta, which represents approximately 5% of our business volume to.
Converted into the new platform at a later date.
Prior to covert 19.
Apparently to operate.
Guarded two.
For me.
Year over year improvements and volumes.
In our Integrio operation.
You are now fully converted.
The cloud.
The cobot 19 related impact on our volume started to be felt in the last two weeks of the first quarter with social distancing, becoming the norm and the cancellation of all non urgent care services, an elective procedures in hospitals.
As of May.
Our average daily volumes had dropped 22.5.
From those in early March.
We also experienced higher operating costs as back office staff were required to rearrange schedules and manage rapidly changing workflows.
This trend has continued.
Second quarter.
Just like everyone else, we don't have a clear picture of how long the impacts of coal with 19 will last.
But we do expect that once the risk has reduced and particularly as elective healthcare services resume.
We will see increased daily volumes and can refocus our transformation agenda on back office efficiencies.
Moving to slide six despite the impact of Cobot 19 long term care operations continue to provide a stable foundation for our business.
See average occupancy at our long term care centers.
97% for the first quarter compared to 96.9% for the same prior year period.
97.8.
At the end of the.
Quarter.
Funding enhancements provided earlier in 2019, along with Covance 19 related funding of approximately $400000 helped us address increased.
In the quarter.
Previously the government had indicated plans to eliminate structural compliance premium funding for eligible beds. This year.
However, we recently learned that this funding will continue.
With the reintroduction of a replacement program.
This means the annual structural compliance premium funding of $1.3 million will continue beyond April one in a new.
There have been several coded related provincial funding announcements across provinces in which we operate.
While we are appreciative of their support we do not have all the details on these programs yet and are still evaluating the degree to which they will help address our increased costs and lower occupancy, resulting from cobot 19.
The critical shortage of long term care and the pressing need for additional long term care beds in Canada.
Has not changed.
However for now.
Everyone's focus has to be on managing the current situation.
Once these immediate concerns have subsided, we believe that discussions regarding the redevelopment projects will come back to the forefront.
The challenges the Covance 19 pandemic has highlighted will at least in part be addressed by building new long term care capacity and decommissioning older facilities.
Turning to slide seven our retirement living segment continued to perform well in the first quarter.
With revenue and then why growth and strong NOI margins. Despite the impact of Cobot 19 in the latter part of the period.
Average same.
Store occupancy increased compared to the same quarter last year and lease up activity at the very view also contributed to the strong.
Well.
However.
For the ended the first quarter, our occupancy levels began to be impacted by covert 19 as move ins.
And tours for prospective residents were restricted.
Stabilized occupancy at the ended the first quarter dropped from 95 point.
1%.
The ended the fourth quarter.
At the 92 point.
Eight.
At March 30.
First.
Since then.
It is decreased further to 91.7%.
As of the end of a.
Well.
We expect continued pressure on occupancy.
The.
The normal course.
Yeah.
So move ins.
And tours Canrig.
Expansion plans that are Empire crossings.
Firemen community in Port Hope, Ontario.
I've been put on hold.
As a result of covert.
Yes.
Once the risk to our community.
Past.
We expect to.
Dania with this project.
On slide eight our assist contract services and SGP group purchasing services continue to show strong growth with revenue up by 9.6% in the first quarter year over year.
Currently we provide contract.
It's a 50.
Three.
Long term care residents and retirement living communities for third parties.
We grew extendicare.
Representing approximately.
6600 beds.
At the end of Q1.
SGP provided cost effective products and services to approximately 73000 senior residents across Canada.
Yeah.
Up 27.8.
From the same quarter last year and 12.5.
From the end of 2019.
This business Leverages, the purchasing power of its large network.
The supply other senior care.
Provider.
Okay.
Over the past few months, we've also use as broad purchasing reach to help supply our operations and those of our clients with personal protective equipment.
So necessary to protect our staff and those in our care.
We continue to develop opportunities to expand SGP and.
Through additional services and product offerings.
And by expanding the reach of our sales team into other geographies.
We'll now turn to David Baker, our chief.
Financial Officer.
To provide.
Into our financial results from the first quarter.
Right.
Thanks, Michael.
I'll first provide an overview of our corporate financial performance for the first quarter, and then I will get into some highlights of the individual business segments.
Turning first to slide 10.
Revenue grew to 268.8 million in the first quarter.
But increase of 2.3% from Q1 of 2019, largely driven by LTC funding enhancements cobot 19.
Growth in the retirement segment and the effect of the leap year this quarter.
Were partially offset by lower home health care volumes.
Net operating income in Q1 of 2020 was down slightly at 30.4 million and represented 11.3% of.
Compared to 11.7% in Q1 of 2019, reflecting increased revenue offset by lower home health care volumes.
Restock.
It's operating costs.
And higher costs due.
The team.
Right.
Adjusted EBITDA.
By 300000.
Seen point 9 million.
Thank you one of 2020, representing.
One point.
3% of revenue.
Compared to 7.1%.
The same prior year period.
Impacted by lower.
Right.
Yeah.
The cost of 900.
1000.
Ripley.
Play higher other thoughts.
For the three months.
Smart.
First.
2020.
Okay AFFO.
Greece by 1 million to 11 points.
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Compared for the.
Prior year period, driven by higher maintenance.
Effect than current taxes.
Partially offset by higher or.
In Q1, we.
Dividends.
Yes.
7 million representing.
Payout.
Good night.
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Yeah.
In March we chose to suspend our dividend reinvestment plan as we believe that the dilution. This plan would create at our current fair price.
As not in the best interest over.
Yes.
[music].
Turning to slide 11.
Okay.
And Hawaii.
From our home health care operations was 4.3 million for Q1.
2020.
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Representing a decrease.
The 3.5 million from the same prior year period.
You bet a wide margin in the first quarter was.
4.8.
As a.
Compared to 8.6% in Q1 of 2019.
Lower in Hawaii.
And why margin in the current quarter were driven by lower volumes, which included the impact of cobot.
Anthony.
In the latter half of large and higher back office operating costs.
Volumes from our home health care operations declined by 3.1% from Q1, 2019, and 2.5% from Q4 2019.
As Michael mentioned.
Prior to the.
The cobot 19, we started to experienced year over year volume increases.
Correct.
And our Ontario operation and continue to believe that the new cloud based system along with the steps, we're taking to approve our back office.
Gross.
Prison procedures to leverage the new platform will ultimately lead to the expected.
Of increasing volumes followed by improving.
[music].
Turning to our long term.
Okay Fair.
Sure.
Well in the first quarter.
Our.
4 million.
Port.
Six.
At our NOI.
By 1.6 billion or nine and a half.
From the same prior year.
Well that in Hawaii margin of 11.
Good.
5%.
Thanks.
On top.
10.8%.
First quarter last year.
As long term care funding intense timing.
Under the Ontario flow through on flow.
Cobot 19 funding and incremental funding for the.
Sure.
This quarter.
[music].
These were partially offset by.
Sauce, the President's care.
Higher operating a labor costs and cobot 19 costs that have yet.
Fund.
Turning to retirement living on slide 13, net operating income.
Yeah.
All right.
Moving.
Ration.
Priest 1.1 million.
To three.
7 million for.
First quarter.
Yeah.
Compared.
The same prior year period.
This improvement was driven primarily by growth in Africa.
Yes.
So our operations.
0.7% for the first quarter compared.
79 point.
Three.
So the same prior year period.
His contributions of the very few community, which opened in.
Before.
29.
Okay.
We typically see.
Fine.
Stabilized occupancy levels over the winter.
However, this.
This quarter, we were further.
Yeah.
A little bit.
Resulting in a 200.
30.
His point drop.
Off stabilized.
Yes.
Yup.
Q1.
The.
Yeah.
Is there to the end.
Plenty 19.
Okay.
Turning to slide 14, and looked at our final business segments.
Net operating income from the contract services.
Consulting and group thing.
Slide five.
2000.
The 3.9 million in the first quarter compared to the same quarter last year.
Due to growth and.
The third interest.
NCP Division almost 73000.
[music].
Partially.
Bye.
Right.
And.
[music].
For the.
Timing of consulting revenues Paris.
Turning to slide.
Dean in our financial position.
We are in a strong financial position with good liquidity.
Important to note the government funding underpins a significant portion of our business.
And we are.
To evaluate various new government funding announcements.
As announced to address.
The.
Increased costs associated with Covance 19.
We are confident that will be in a strong position to return our focus on the future when the pandemic is behind us.
At March 30, Onest plenty plenty.
Our consolidated cash and short term investments on hand.
Were 105.
5.8 billion.
With 70.2 million of Undrawn.
Availability on our credit.
After quarter end.
We added a further 32.3 million in liquidity as we finance several of our retirement communities.
The rate.
Remain well positioned for the balance of the year.
And with only $23 million.
Scheduled debt maturities in Q4 remaining.
And our credit metrics.
Are largely in line with the levels at the end of year.
With that I'll pass it back to Michael.
As.
Core.
Yes.
Thanks, David.
Needless to say it has been a challenging time for all of us residence.
Clients.
Team members and families.
Our focus remains.
Steadfast on providing the care and support our community needs and expect.
Keeping everybody safe is our number one so.
The Extendicare team.
Stepping up to the.
And our resolve remained strong.
Over the longer term.
Once the pandemic has.
We.
Can you to believe that demographic.
Tailwinds.
The investments we have made in our.
There is.
I will provide us with.
Variety of opportunities for the future.
With that.
We'd be happy to take any questions you may have Claudia.
Thank you Sir.
We will now begin the question and answer session.
To join the question Q You Me Press Star then one on your telephone keypad.
You will hear tone acknowledging your request.
Yes.
If we are using his speakerphone. Please pick up you had said before pricing any Keith.
We throw your question please.
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Hi, then too.
We will pause for a moment.
The callers.
Indeed.
Our first question is from Nordmann calmer.
Okay.
With TD Securities.
Please go ahead.
Thanks, Good afternoon.
All right.
And just.
Good.
Hey, guys and you're.
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Paul the wonderful work.
What lines.
And.
Yes.
Just a quick ones.
Let me off the hop how many of the LTC homes are still fully fall right.
[music].
The in Ontario with the.
The.
The program on the pandemic all of our homes are at with the exception of two or three homes below the 97% threshold as it is which is the full funding threshold.
So we don't at this point than a lot of our homes are in a position to.
To help Clawbacks.
Okay.
And then you guys.
Hundred thousand.
Over related funding how much more do you guys kind of.
[music].
The.
Is the understanding.
The goal is to sort of coupled with Colgate 19.
Costs.
Yes in the quarter, we recognized 400000.
But.
Offset.
The.
We incurred.
In long term care in the province.
Those were funding was.
And Steve.
So in the first quarter, we actually receive.
About 1 million three of funds.
In Ontario.
And we took 400 of that in to offset.
The cost.
And we were since then in aggregate up until.
Yeah.
Proceed about two and a half million been Ontario in a further tuna just over 2 million is coming in in April and May.
So in aggregate.
So four and a half million perceived in Ontario.
Just.
Alberta.
Josh.
It started flowing some funds.
Literally this week.
For us again to help offset in part the pandemic costs.
The second part of your question.
Around the.
On the intent we think on the long term care side, we do.
Dissipate because the various programs the governments have ruled out the intention of those programs will be to cover the cost of Covis.
[music].
We don't have all the exact indeed bills, but it's encouraging that are both Ontario in Alberta, which our two biggest markets on the long term care side funding starting to flow, but still waiting for all the particulars about how that will eventually will be.
Accounted for.
Okay. Thanks, I was actually.
The color.
And then maybe.
Could you.
Give a little bit of color on why.
Got.
Good for.
Just a 5% of ERP implementation is it something cost base or is it a strain on resources.
Yes.
Yeah, I learn I think the key reason is everybody's really really busy.
So the thought of doing an implementation and doing training and and.
Making those kinds of changes in the midst of this we really try to.
Reduce.
Non essential changes during this period of time.
Just so that everybody can stay focused on.
Responding to our clients needs.
Implementing the new procedures and workflows for.
Our safety purposes.
Okay. Great example of that is we have to phone every client before we visit them to talk to them about symptoms to screen them for.
Any telltale signs that they may have the virus. So it just adds a huge work flow on top of our normal operations to be able to do that so that was a big change with literally days to implement the change. So it was just a matter of.
Of.
Putting that off so that people could focus on.
What is critically important right now.
Okay.
And then maybe just one last one.
For me on retirement homes, when do you guys.
Yeah.
Thanks.
You'll be able to.
Sorry, reopening for tours and.
And non essential I guess.
We're not sure about that.
Probably pretty soon.
It really is going to be different in different parts of the country.
Because I think each province is going to have there.
Their own.
Opening up.
Kind of strategy and timeline.
Which will be dictated by the frequency of infections that's occurring.
In that local environment.
That said to suggest that thats going to be some kind of a straight line function.
It was probably not the case everybody's predicting that there might be.
Waves or or surges of infections at various times.
Governments may be forced to throttle back the opening up.
So it's pretty unpredictable.
But.
[music].
That said I think we'll be we'll be ready for whenever those windows of opportunity open.
Okay, Great Thats all from me. Thank you all again ill turn it back.
Thanks.
Thanks.
Our next question is.
Please.
Okay.
Great.
Yes.
Please go ahead.
Okay.
Good afternoon and Echo.
Nicole Lawrence.
On the thanks.
Yeah.
Yeah.
With respect to.
The home care business.
When you look at the.
I'm not sure. If you have this type of information readily available, but when you look at the.
A decline in volume since since since March.
How much of that is a function of just say in overall decline and.
Referrals made to from the lens and how much of it is just due to the fact that maybe labor is less available.
Chris I think that.
The biggest drop.
The bigger.
Portion of the drop is still the referrals versus the labor.
Screening.
Point.
Yes.
So we have seen.
Significant drop it in those referrals since then we have.
We have.
I think.
But I will.
Bottomed out.
Nobody.
For sure but that.
The from our.
In the volumes were.
Third 22 and a half.
Slightly different than what we.
The update you gave it back in early April so.
But thats largely principally.
[music].
The referral.
Ill drop.
[music].
Tax.
So.
The vast majority.
Yes.
And when you look at kind of mix of.
The volumes.
Our.
I'm just guessing that.
Volume declines are starker for.
Hey.
Yes, w. versus nursing type of because it is that fair.
Yes.
Yep.
And what you're kind of mix generally be.
And then if you think about the spectrum of care that you provided.
No home care, you referenced the cancellation of a lot.
Surgeries and so on just any kind of way we can you think about how.
How it might come back.
Yeah, I mean, I think I.
The.
I mean.
The P. S. W is.
The diversity of our volumes probably about 80.
And.
And.
Probably the area.
From a from a non.
Yes.
Hi.
[music].
Home care.
[music].
I would have dropped.
From the.
The thing is down but not as.
On a relative basis.
We have a very small.
As far volume on the.
The therapy side.
The physical therapy.
Type work that has.
Really dropped off but.
Very very small bits of art.
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So we think Fas.
The.
You know hospitals anymore.
Okay.
[music].
Features reopened.
And some of.
Services that were.
Where we.
[music].
We are focused on things like that.
Replacement in the replay.
Those.
Hi.
That will drive.
Okay.
They're on the.
Five but also on the.
Yes.
I just.
Just people need help.
Sort of non nursing place outflow situation, so we really need to see that.
To put together.
How about.
Yeah.
And then just last last one for me on on this topic.
In terms of the.
The costs.
The incremental costs that you experienced.
During the quarter.
As it related to cope with 19.
Was there anything kind of quantify.
In the home care business.
Okay.
And then.
Just lastly.
Respect to.
Government funding and assistance to.
Various healthcare sectors.
[music].
Has there been any kind of.
How do you think thats.
Specifically directed at the home care sector.
Thanks.
Chris our agreements with.
Yes.
With with various government agencies on the home care side have.
Very specific pandemic.
Clauses in them.
That talk about.
Compensation for increased costs around part to particularly protective equipment.
So.
So we're expecting that those.
Those.
Clauses will cover our costs in that regard.
There are some costs.
Back office costs, which.
We don't think.
We're going to recover.
Yeah.
Just related to the challenge of rescheduling a lot of.
Like when everything started to shuffle around and things got canceled and.
People were exposed.
In the field too.
Travelers or people that had tested positive for coal with 19, we had a lot of people in self isolation at home and of course every time one of our homecare workers is confined to their home. It means that all of their work has to be.
Okay and scheduling of course is a function of geography as well as time.
And so optimizing that means that your reshuffling all over the schedules. So it was a mammoth task to do all that rescheduling, we're seeing that calm down somewhat.
But we're still finding that.
There are people who are affected go out of commission for two or three weeks and then we have to reschedule all of their visit.
So those kinds of costs those those kind of back office logistical costs.
We think we won't get.
Any kind of special compensation for those.
Yes.
Any idea how much.
That contributed.
Cost in the quarter.
On the.
The back office side, I mean, we've seen a spike and overtime for example.
So that probably is running in the sort of 200000.
[music].
<unk> dollar quarter run rate.
As it as an example, some of the other costs are harder to extra hours.
We are harder to look out but OTI is one thing we're looking at.
Yes.
Thanks, very much guys.
Thanks.
Our next.
Next question is.
Tommy beer with RBC capital.
Please go ahead.
[noise].
Thanks, and a higher.
Yes.
Just again maybe.
On Tara.
[music].
Yeah.
Can you provide.
Pantech on.
The.
This.
In volume that you referred to.
I guess pre calling for.
For January and February.
Yep.
Finally, we.
I mean at one of the things were looking I know, we've talked about in the past as and people have been interested is at what point or we're going to see that inflection point, where we start to have some year over year growth.
So without getting into sort of weekly specifics in numbers, we did have a.
We were starting to see through February early March.
Weekly.
At or above last year's sort of equivalent weekly period from a volume perspective, so they weren't.
Dramatically higher but.
You know given where we've been out for the last while.
Having something.
Coming in at that level or or or modestly above it was it was an encouraging sign.
Uh huh.
Back to those sort of roll out of procure I mean, we've got all the Ontario business, which is 90.
95% of our 93% of our business, probably is Ontario, and all of that was in the new system. So.
So that was encouraging and then and then.
Yeah, we were we were hit with the with the disruption.
And so.
Okay.
Got it.
Helpful.
Just.
On long term care.
Our same property NOI was up.
Obviously quite strong.
Is that really again.
It's just timing with respect to some of the funding and I guess, a expenses and should we expect that that will.
Normalize over the course of the year.
Yeah, No that's a fair come as a lot of timing on the on the low spend any traditionally earlier.
Earlier in the year we.
We are those all envelopes so more conservative on levels of under levels of overspend are under spend so.
But I think that there's nothing to the red from nine other than sort of the.
Longer term view of those margins in the 11 and a half the 12 range of lives as we've talked about prior.
Got it.
And sorry, one more on Paramount.
In terms of the what are the remaining costs to incur.
Relative to the.
The.
The Alberta system gets rolled.
Okay.
Yes, if you recall, we the total spend for that project over three years ago 12 million. We've spent 11 six to date.
I'm not sure Alberta will cost us the full 400, when we get to it but so I mean from an overall perspective, even with the deferral, Alberta with that sort of money tucked away, we're still on track for that.
Okay.
Just one last one going going back to your comments around a assistant SGP.
Can you just expand on some of the commentary there.
What is the opportunity to expand that business and.
You made some comments about.
Being.
Some incremental demand in terms.
So what's been happening so.
Maybe some color there would.
Helping.
After that I'll turn it back.
Sure. Thanks, so much.
Yes, the the opportunity in that space is really.
In full.
So.
Okay.
We've been.
Banding it geographically.
And bringing either.
Service providers and other.
All right.
[music].
Canada into the group and of course, the larger than purchasing group becomes.
The more leverage we.
I have.
From.
The perspective of getting.
Better terms.
And better pricing.
And.
I think a good indication of that has been.
Some of the.
Big players that Weve had joined the group over the last couple of years.
Like Amica inch legal.
Verve et cetera. These are big organizations.
Who are still seeing.
[music].
A significant pricing benefit.
And logistical benefit of of joining the group. So it really hasn't had some momentum.
As.
We've added some of these groups.
But we're not operating anywhere east of the Ontario border. So.
A significant opportunities.
Geographically.
And we also see opportunities in the scope of.
Services that were doing collectively.
Okay. So.
Most of what.
As GP is focused on today as.
But theres more in the way of services that we could be looking at so think about things like property maintenance and insurance.
So things that we could be doing with.
Lee.
So we see both.
Breadth and depth.
Okay.
Communities for.
Prefunding.
Next partnership.
Thanks very much.
<unk>.
Our next question is from town Lee with National Bank financial.
Please go ahead.
Hi, good morning.
Wonderful.
Sorry.
Hi, asking a couple of questions about.
How.
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Great. Thank changes.
We sort of come out.
Yes.
Yeah.
The lens obviously.
Bina referred ton of.
So thats a home health care.
Yes.
Are there any types of services.
Got you.
Thanks.
At least for the medium term because of what's going on here.
Hi, Mike.
Okay.
Continued to be offered in that kind of setting it might go back into.
A hospital or another type of facility.
Well tell the first.
Comment that I'll make on this is that I didnt bring my crystal ball to the.
[laughter].
Huh.
Okay.
The conference.
Hi.
So.
Well, we're now into the.
The realm.
While.
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And John Toffel that'll are.
<unk> Chief legal counsel.
It is not in the same room with me.
So.
He can't throttle.
So you know maybe you'll get.
No.
Hi, Dan.
But.
One of the advantages of being distributed but.
Look I think theres going to be a lot of.
Really self examination of the healthcare system.
After the.
So that the crisis subsides.
And so there's a lot of.
Thanks.
Could happen.
Thanks.
But.
Well, what I would say from a hospital.
Perspective.
Our hospitals were running at 90, 798% occupancy before this crisis.
Just.
And if you recall there were pretty significant waiting lists.
For a lot of.
Yes.
Yeah.
Here is as well.
And now we've pretty much the suspended everything elective.
For now eight weeks and counting.
So those waiting.
We are getting longer and longer and longer than unprecedented.
So the hospitals as they ramp up.
Our interface.
Okay.
Real pressure to work through that backlog.
So the thought that they would expand their mandate into other areas.
It is not very believable.
At least for the next few years, they're gonna have to do.
They are there.
You know that.
The tasks that they're uniquely.
Set up to do.
If anything I.
Perfect.
More pressure on community based providers like us to increase our volume.
So take pressure off the hospitals not the other way around.
Thanks.
And I guess for similar question on a long term care side any like.
Yes.
Is it feasible to think that some of these.
Okay.
Incremental efforts, you're making right now.
I.
Subside.
As a kind of feel like we.
This will sort of being more permanent.
Yes.
It kind of way to operate going forward until there's a much broader review.
Of how long term care.
Yes.
Yes.
Yeah.
Well look that a couple of things with long term care I mean, the first thing is is that the crisis has really put an exclamation mark on the need different.
D. beds.
If anything I.
Back then.
Acceleration of government.
To get re development underway.
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Yes.
Make that.
As possible.
[music].
So.
The capacity issue is.
Is still there.
Okay.
The pressure from the hospitals is is really going to be felt.
As.
As you know the need for.
Bad for that sector.
Is still there.
So.
So if anything I'm expecting that too.
To become a more.
Kind of.
Kind of activity.
The other point to make is.
With respect to.
The.
The newer facilities they have a lot more.
Physical space per resident.
The residents are more.
For more.
Yes.
Spread out.
There are.
Yeah.
Private rooms and people are.
Our.
There are more effectively separated so in dealing with outbreaks newer homes have a huge advantage over the homes built 40 and 50 years ago.
So.
I think thats part of.
The new normal.
In terms of being able to handle.
Now I'll breaks in any future Pandemics I think people will be very attuned to making sure that we're able to do that.
And.
I think the.
We need to.
We have access to the kinds of capabilities that.
As a company like.
Dan Medicare has.
Which we supply to other players through through our assist.
Is.
Bodes well for our ability to.
Expand that part of the service so.
I do think we're in a.
A.
You know a difficult period of Indeterminant lengths.
I think until there's a vaccine.
Hi, it's going to be very difficult to.
Both.
Back to normal.
So that could be quite a while.
But that said.
I think.
As we come out.
Yes, hi that demand for our services are going to is gonna be a higher than it otherwise would have been.
Okay.
Right.
And then just.
Regulatory question too one of the things we were talking about.
Prior to all of US unfolding was.
Here in Ontario, the transformation of the land, it's Ontario help teams in how about my.
Clearly going forward has that im assuming that kind of activity.
We've been.
So for now.
For the most part I mean, there's a little bit of activity continuing some meetings that continuing but.
Nothing nothing substantial I think regardless of how the.
Those.
Those health teams evolve.
The need for more integrated services.
Across.
Various sectors.
Healthcare.
I will.
In.
[music].
Over time, and what that means is we need.
The able to collaborate and cooperate better.
Doctors offices.
Hospitals with.
With public health.
Et cetera.
And not operate so.
And then Lee as was the case.
In the past.
And one of the.
Thanks thing that's happening through this.
Both in our home care and our long.
Gary.
Is.
As we've implemented.
Virtual care services.
Okay.
And at Breakneck speed I mean, we're offering.
Some of our.
Homecare services virtually now governments have set up this bodes for that we've already implemented that and we're providing some services that way.
Our we're able to get.
Doctors.
On the on the phone at through video conferencing right inside our long term care facilities to get to get advice right on the spot.
To get prescriptions right on.
But so there is.
It's a real innovation.
That.
We're always possible.
[music].
But now have been driven by necessity three this crisis they will persist long after.
So that's really going to help with.
That whole concept of care integration, where we're cooperating more effectively with other players in the market.
Okay.
Okay.
And then just lastly, I apologize.
Earlier.
Paul.
[music].
The collection rates.
In retirement have they been.
Stable with what you've seen previously.
Yes. They have are both our April and May.
Brent cycles.
In line with normal.
Normal levels.
Okay perfect.
Thanks, very much gentlemen.
Hi pleasure.
Once again, if you have a question.
Please press Star then one on your telephone.
Our.
Question is from Doug low with.
Well partners.
Please go ahead.
Yes, thanks, very much greater and Doug.
Minimal.
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Let me talk reprehensible your boat.
I'm lines within home and building.
Hello.
What im good.
Dr referrals and seems to be contributing to a and service hours, but I was thinking.
But we're not concerned demichele provides an opportunity.
Turning to provide services that were looking for me.
Good night being the submitted bids.
I'm thinking specifically about Russ.
Fully.
Infusion therapy terrific.
The broad sort of other available.
Celebrates support what proportion of.
So with our they're harder.
Acuity.
Services.
Oh got general.
Well of course.
Don Wood.
Several of the category.
The build out.
But.
The other directly.
Well it sounded like that.
Yes.
Okay.
[noise].
Yeah, Doug we're not seeing much in terms of.
Therapy directly related to covert 19.
People who need.
More more more acute care.
Yeah.
I really being cared for in hospitals.
We're not we're not set up in home care very effectively to provide say oxygen therapy or intravenous therapy.
For people.
Syrian seeing an acute episode and part of the reason for that is that.
If somebody's short of breast for instance, because they have a viral illness first of all that comes on quite quickly and secondly.
It can deteriorate further so.
Got it.
Acute episode like that.
That would be handled hospital setting the types of things, we do with respect to intravenous therapy or.
In therapy, our situations, where people are more stable. They have a chronic disease for instance that stays the same over weeks and months and is not in an active phase where it can be changing day to day. So that's that's more of what a home care service provider would do.
So I think what we're seeing is.
More.
Situations, where people want to avoid going into the hospital.
So with their lung disease or.
For dialysis and that sort of thing and more interest in trying to set up those kinds of services.
In People's homes, but.
Were eight weeks into that so it's a bit early to declare any trends.
But I.
I do.
Yeah.
Those kinds of higher.
Do you have de services.
To be.
[music].
The increasing in a.
Setting.
Well, that's good feedback and then Doug.
One follow up.
Recall and you're going to her remarks.
<unk>.
Ensue.
C suite refurbishment and the potential.
The funding there.
Whether that.
[music].
With regard to.
The.
Bruce.
[music].
Sort of out of building that should go.
Be willing to reflect on the.
On the.
Capex funding there or do you think about the bidding.
Hi obvious program by was submitted to begin this week.
Yes.
But always.
No I look I think.
This is.
An area of active pursue.
In the government I think the government understands.
As the need to upgrade I mean, they the Ontario government in particular already at their program as you know.
But.
But there also seeing quite directly in this.
In this pandemic.
The difference in performance between new homes and old homes.
So that's.
That's right.
Adding to the impetus that was already there.
Two.
Started dressing.
Yes.
Thanks.
[music].
There are no further questions registered this time.
I would like to turn the conference back over to Julien content for.
Any closing remarks.
Thank you very much Claudia that concludes our call for today.
Presentation is available on our website as I would call a number turned archive recording.
Please don't hesitate to give us a copy of any further questions.
Thank you again, everyone for joining us goodbye and have a good long weekend.
This concludes today's conference.
Oh you.
The next your line is.
Thank you for.
He seating and have a pleasant day.
[music].
Mm Hmm.
[music].
[noise] mm.
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