Rural Funds Group · ASX:RFF
Rural Funds — HY21 Earnings Presentation
27 slides from Rural Funds's earnings presentation, Feb 18, 2021
Slide 1: Financial results presentation half-year ended 31 December 2020
For personal use only Managed by: Financial results presentation half-year ended 31 December 2020 18 February 2021
Slide 2: Disclaimer and glossary of terms
Disclaimer and glossary of terms Disclaimer For personal use only This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (RFM) as the responsible entity of Rural Funds Group (RFF) and has been authorised for release by the Board of RFM. RFF is a stapled
Slide 3: Contents
Contents For personal use only 1. HY21 financial results 2. Strategy and portfolio update Presenters 3. Conclusion 4. Appendices David Bryant Tim Sheridan Daniel Yap James Powell Managing Director Chief Operating Chief Financial General Manager – Officer Officer Investor Relations & Marketing 3
Slide 4: HY21 financial results
For personal use only 1 HY21 financial results Mary River, water source for Maryborough macadamia orchard developments, central Queensland, August 2020. 4
Slide 5: Key activities and highlights
Key activities and highlights Assets secured and macadamia orchard developments commenced. For personal use only • Additional land and water secured for macadamia orchard development program: HY21 results highlights • Maryborough: 5,258 ha of sugar cane farms and 8,060 ML of water entitlements. • Ro
Slide 6: Property movements
Property movements Capital recycled into macadamia development assets. For personal use only • Key movements: Adjusted property assets movements ($m) by sector1 a) Almonds: disposal of Mooral almond orchard for $77.1m, depreciation of $1.4m net of development capex of $4.2m and revaluation of $0.2m.
Slide 7: Earnings and balance sheet summary
Earnings and balance sheet summary HY21 AFFO and DPU on track for full-year forecasts. FY22 forecast distributions announced. For personal use only Income and earnings metrics 6 mths ended 6 mths ended • Property revenue has decreased primarily as a result of the poultry asset 31 December 2020 31 De
Slide 8: Debt facility and interest rate hedges
Debt facility and interest rate hedges Facility tenor extended. For personal use only Debt facility metrics Debt facility tenor 31 December 2020 30 June 2020 $300m Term debt facility limit1, 2 $380.0m $335.0m $250m Term debt drawn $319.2m $297.2m Debt facility Headroom $60.8m $37.8m Facility limit (
Slide 9: Strategy and portfolio update
For personal use only 2 Strategy and portfolio update Cultivation of planting material for macadamia orchard developments, Nursery Farm, Bundaberg - central Queensland, August 2020. 9
Slide 10: Recycling capital into macadamia developments
Recycling capital into macadamia developments Capital realised from assets developed by RFM. For personal use only • RFM has over two decades of experience developing and operating agricultural assets in the cropping, viticulture, poultry, almond and macadamia sectors. • Funding for the macadamia de
Slide 11: Development progress
Development progress Year one development program commenced. Planned macadamia orchard locations For personal use only • RFM horticultural staff have relocated to central Queensland to oversee the macadamia developments. Year one development program (2021 calendar year) includes: • Rockhampton: 50 h
Slide 12: Enhancing the portfolio
Enhancing the portfolio The investment into macadamias is consistent with RFM’s strategy of investing in sectors in which Australia participates globally and improving portfolio diversification. For personal use only Assets map, sector information and key lessees1 Note: 1. Shaded areas denote climat
Slide 13: Revenue growth and improving lease metrics
Revenue growth and improving lease metrics The investment into macadamias is expected to provide increased earnings and WALE in future years. For personal use only FY21f revenue by sector and year of lease expiry1 16.0 WALE = 11.1 years 14.0 12.0 10.0 FY21 revenue ($m) 8.0 6.0 4.0 2.0 0.0 Year of le
Slide 14: Conclusion
For personal use only 3 Conclusion Livestock forage crop (sorghum) growing under a new irrigation pivot at Comanche, Rockhampton - central Queensland, January 2021. 14
Slide 15: Performance metrics
Performance metrics Historical distribution growth of at least 4% per annum: in line with strategy. For personal use only Historical performance metrics (inc. FY21f)1 Notes: 1. Adjusted NAV and trading price at relevant financial year end except $2.01 (as at 31 December 2020) and $2.49 (as at 12 Feb
Slide 16: Conclusion
Conclusion Macadamia developments commenced. FY22 forecast distributions announced. For personal use only 1. Material assets secured for the 5,000 ha macadamia developments. RURAL FUNDS GROUP (ASX: RFF) 2. Initial funding provided from capital recycling: AFFO lower than prior corresponding period as
Slide 17: Appendices
For personal use only 4 Appendices Geier vineyard prior to harvest, Barossa Valley - South Australia, January 2021. 17
Slide 18: HY21 results – summarised comprehensive income
HY21 results – summarised comprehensive income Summarised statement of comprehensive income For personal use only 6 mths ended 6 mths ended • Property revenue has decreased primarily as a result of the poultry asset disposal, offset by the income from new acquisitions, development capital expenditur
Slide 19: HY21 results – AFFO composition
HY21 results – AFFO composition Composition of AFFO (pre-tax) For personal use only 6 mths ended 6 mths ended 31 December 2020 31 December 2019 • AFFO is pre-tax and excludes fair value adjustments, depreciation and impairment $ $ to represent RFF’s property rental business. Property revenue 33,899,
Slide 20: HY21 results – reconciliation of net profit to AFFO
HY21 results – reconciliation of net profit to AFFO For personal use only Reconciliation of net profit after tax to AFFO • Non-cash items added back to reconcile net profit after tax to AFFO. 6 month ended 6 mths ended 31 December 2020 31 December 2019 • Key adjustments include: $ $ Net profit after
Slide 21: HY21 results – summarised balance sheet
HY21 results – summarised balance sheet Summarised balance sheet For personal use only As at As at • Water entitlements are recorded as intangible assets, and held at 31 December 2020 30 June 2020 the lower of cost less accumulated impairment or fair value in $ $ accordance with accounting standards
Slide 22: HY21 results - total assets reconciliation
HY21 results - total assets reconciliation Total assets reconciliation For personal use only Adjustment for Plant and Investment Bearer Intangible Property – Financial assets – water Adjusted equipment Other assets Total property plants assets1, 3 owner occupied property2, 3 entitlements at total as
Slide 23: Valuations, valuers and lease expiry
Valuations, valuers and lease expiry Policy to conduct independent valuations at least every two years and rotation of valuers every three years. Property valuation details For personal use only 23
Slide 24: Development assets and capital expenditure
Development assets and capital expenditure Productivity and higher and better use developments underway across most sectors. Development and capital expenditure summary1 For personal use only Note: 1. Five-year developments refer to development potential of assets. Pasture improvement includes stylo
Slide 25: Investment strategy
Investment strategy Higher-and-better-use and productivity improvement strategy seeks to increase total returns and income generation, supporting distribution growth. For personal use only Spectrum of investment opportunities1 Note: 1. The income and growth figures presented in the figure above have
Slide 26: Environment, social and governance (ESG)
Environment, social and governance (ESG) Policies and procedures addressing ESG issues. For personal use only Environment Social Governance RFM and Meat & Livestock Australia: reducing emissions on cattle properties Climate change Employment Compliance committee RFM is playing an active role in cont
Slide 27: For further information
For personal use only Managed by: RFM corporate and operations management (listed alphabetically by surname) For further information: Rural Funds Management Limited For further information: ACN 077 492 838 Tim Sheridan David Bryant AFSL 226701 Chief Operating Officer Managing Director Level 2, 2 Kin