Full Year 2024 Rural Funds Group Earnings Call Transcript
Key Points
- Revenue from property leasing increased by 8% compared to FY23, driven by additional rent from macadamia orchards and market rent reviews on cattle properties.
- The group achieved earnings of $117 million, or $0.30 per unit, on a full-year basis.
- Independent valuations resulted in a $97 million uplift, particularly in cattle and macadamia assets.
- Total assets increased by 13%, largely due to property valuations and capital expenditure on macadamia developments.
- RFF's core syndicate debt facility was refinanced, increasing the limit and extending the tenor, with 70% of debt fixed at a weighted average hedge rate of 2.8% for FY25.
- Cash earnings or adjusted funds from operations (AFFO) of $0.11 per unit were slightly lower than the guidance of $0.112 per unit due to weather-related CapEx delays and lower cattle prices.
- The smallest sector within the portfolio, vineyards, received a valuation decrement due to challenging industry conditions.
- Gearing increased by 2% to 37%, despite significant capital deployment for macadamia developments.
- Distributions remained flat at $0.1173 per unit, with no expected increase until the payout ratio is below 100%.
- Exposure to commodity price volatility, particularly in macadamia and cattle prices, poses a risk to future earnings.
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Good morning, and welcome to the financial results presentation for the Rural Funds Group for the full year ended June 30, 2024. For presenting today is David Bryant, Managing Director; Tim Sheridan, Chief Operating Officer; and Daniel Yap, Chief Financial Officer. (Event Instructions)
I'll now hand over to our first presenter.
Thank you, James. Good morning, everyone. As usual, I will present the financial results and capital management before handing over to David Bryant, who'll provide a portfolio and strategy update.
The first slide of this section outlines the key earnings results for the period. Revenue from property leasing increased by 8% compared to FY23. The increase is mainly due to additional rent being generated from the lease of macadamia orchards under development. Also contributing to property revenue growth was annual lease indexation and
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