New Zealand Rural Land Co. Ltd. · NZX:NZL
New Zealand Rural Land — FY2023 Earnings Presentation
31 slides from New Zealand Rural Land's earnings presentation, Feb 29, 2024
Slide 1: Result for the year ending 31 December 2023
LISTED ON: 29 FEBRUARY 2024 Result for the year ending 31 December 2023 New Zealand Rural Land Company www.nzrlc.co.nz New Zealand Rural Land Company 1
Slide 2: Disclaimer
NEW ZEALAND RURAL LAND CO OWNS AND LEASES SOME OF THE BEST FARMLAND IN THE WORLD, OFFERING AN UNPARALLELED INVESTMENT OPPORTUNITY. DISCLAIMER The information and opinions in this presentation were prepared by New Zealand Rural Land Company (NZL). NZL makes no representation or warranty as to the acc
Slide 3: FY23 Result & Subsequent Events FY24
FY23 RESULT & SUBSEQUENT EVENTS FY24 FY23 NPAT of $10.9m and AFFO of $6.0m NAV per share has grown from $1.250 at listing to $1.602 as at 31 December 2023, total returns have been +32.6% or +9.9% CAGR* AFFO has grown from 4.13** cps in FY22 to 4.35 cps (+5.4%) in FY23. AFFO forecast to be 5.03 to 5.
Slide 4: Roc Partners Transaction - Post Balance Date
ROC PARTNERS TRANSACTION - POST BALANCE DATE Overview On 19 January 2024 NZL announced it had entered into an agreement to sell a 25% equity interest in its land portfolio to Roc Partners (Roc). This transaction settled on 9 February 2024. Roc acquired the equity interest for approximately $44.2m in
Slide 5: New Acquisitions in FY24
Portfolio as at 29 February 2024 NEW ACQUISITIONS IN FY24 0.05 Diversity Increased Overview Subsequent to the settlement of the Roc transaction, NZL entered into two further 0.33 5% acquisitions that are accretive to AFFO and WALT, and further diversify NZL’s portfolio*. 31% 31% The first acquisitio
Slide 6: Dividend Reinstatement & Share Buyback Programme
DIVIDEND REINSTATEMENT & SHARE BUYBACK PROGRAMME Dividend NZL has resolved to both amend its dividend policy and reinstate NZL’s dividend. The interim dividend will be based upon results for the period 1 January 2024 to 30 June 2024. NZL’s amended dividend policy targets a pay-out ratio of 60% - 90%
Slide 7: Outlook & FY24 Forecast
OUTLOOK & FY24 FORECAST NZL’s leases incorporate regular, uncapped, CPI reviews. Accordingly, high inflation will result in rental growth. Furthermore, NZL is insulated from inflation-impacted (and all other operational) on-farm costs by owning only the land. NZL will start to see the positive impac
Slide 8: Outlook & Forecast: Yield + Growth
OUTLOOK & FORECAST Yield & Forecast Growth Across NZX Listed REITs 20% 15% 14.20% 10% 0.30% 6.80% Yield + Growth 3.70% 4.90% 6.20% 6.30% 3.00% 4.60% 5% 0% LPV 1 LPV 2 LPV 3 LPV 4 LPV 5 LPV 6 LPV 7 LPV 8 NZL -5% -10% Cash Yield AFFOps growth p.a to FY27 Yield + Growth Sector Median (4.90%) Yield + Gr
Slide 9: FY23 Results Overview
SECTION 1 FY23 RESULTS OVERVIEW New Zealand Rural Land Company 9
Slide 10: FY23 - Financial Highlights & Metrics
FY23 - FINANCIAL HIGHLIGHTS & METRICS Total Returns Increasing AFFO Net asset value per share has grown from $1.25 at IPO* FY23 AFFO per share was 4.35 cps. This is in-line to $1.602 (at 31 December 2023), total returns have with FY23 guidance of 4.2 - 4.6 cps (Note: two recent been +32.6% (NAV grow
Slide 11: FY23 - Further Diversification of Portfolio
FY23 - FURTHER DIVERSIFICATION OF PORTFOLIO Overview • NZL’s forestry acquisitions in FY23 added meaningful sector, income • The acquistions increased NZL’s weighted average lease term and tenant diversification to its portfolio. (WALT) from 9.3 years to 11.7 years at 31 December 2023, and its tenan
Slide 12: Summary of FY23 Acquisitions & Corporate Actions
SUMMARY OF FY23 ACQUISITIONS & CORPORATE ACTIONS Acquisitions On 14 April 2023, NZL announced the settlement of a forestry estate acquisition with a total area of approximately 2,400 hectares, for ~$63m and was leased to New Zealand Forest Leasing (NZFL) for a 20 year period with the first year’s le
Slide 13: NZL Financials & Return Metrics
SECTION 2 NZL FINANCIALS & RETURN METRICS for the year ending 31 December 2023 New Zealand Rural Land Company 13
Slide 14: Adjusted Funds From Operations (AFFO)
ADJUSTED FUNDS FROM OPERATIONS (AFFO) AFFO is a proxy for free cash flow commonly used by REITs. AFFO is intended to provide investors with a clearer picture of the company’s free cash flow. NZ$000 31 December 2023 4.74cps Net Profit After Tax Adjusted for: 10,854 FFO Unrealised Net Gain on Investme
Slide 15: Profit & Loss Statement
PROFIT & LOSS STATEMENT NZ$000 31 December 2023 Gross Rental Income Rental Income 15,350 Net Rental Income 15,350 $10.85m Less Overhead Costs Directors Fees (227) Insurance (85) NPAT Shareholder Registry & Communication (95) Management Fees (1,039) Repairs and Maintenance (117) Professional, Consult
Slide 16: Balance Sheet
BALANCE SHEET NZ$000 31 December 2023 31 December 2022 Current Assets Cash and Cash Equivalents 1,258 1,942 Trade and Other Receivables 378 269 $369.8m Current Tax Receivable Total Current Assets 7 1,643 13 2,224 Total Assets Non-Current Assets Investment Property 346,281 267,360 Deposit for Forestr
Slide 17: Debt Summary
DEBT SUMMARY NZL has hedging arrangements in place for 64% of its total borrowings costing, on average, 4.7%. The remaining debt is floating and the cost of the floating debt component is 7.7%. Accordingly, NZL’s weighted average cost of debt is currently 5.8%. Key Metrics 31 December 2023 31 Decemb
Slide 18: Total Returns
TOTAL RETURNS Since listing on the NZX (21 December 2020), NZL has delivered total returns (NAV per share growth plus dividends) of +32.6%*. NZL delivered $6.06m in AFFO (4.35 cps) in the 12 months to 31 December 2023. This is in-line with NZL’s AFFO guidance released in May 2023. Post the the most
Slide 19: Sustainability Programme
SECTION 3 SUSTAINABILITY PROGRAMME as at 31 December 2023 New Zealand Rural Land Company 19
Slide 20: Sustainability Programme: Enduring Land for Life
SUSTAINABILITY PROGRAMME 1 NZL continues to work on mapping its current portfolio for marginal land which can be enhanced with planting and a programme to increase biodiversity. The mitigation of erosion is a key outcome of this planting with potential for carbon sequestration and sediment control.
Slide 21: Highlights
HIGHLIGHTS Enduring Land For Life NZL has published the programme it uses to ensure land and partnerships are enduring. Commitments between NZL and tenants are developed and refined jointly, incorporating industry best practice, latest scientific research and learnings from leading tenants. Joint co
Slide 22: Appendices
APPENDICES New Zealand Rural Land Company 22
Slide 23: Investment Summary
INVESTMENT SUMMARY NZL PROVIDES INVESTORS WITH EXPOSURE TO: NEW ZEALAND Rural Land Co Favourable Industry A Proven Value Add Attractive Total Returns High Quality Tenants A Significant Growth Dynamics Acquirer of Land with Attractive WALT Opportunity Long term demand for key Successfully acquired NA
Slide 24: Portfolio Overview - As at 29 February 2024
PORTFOLIO OVERVIEW - AS AT 29 FEBRUARY 2024 Rural Sub-Sector Breakdown 5% 21.0% 31% 55% 46.4% 32.5% 9% Dairy Support Forestry Apples Manawatū - Region Hawke’s Bay Canterbury Otago Southland Total Whanganui Land Area (ha) 97 4,256 6,333 3,991 1,386 16,0631 Pastoral Farms, Rural Asset Class Horticultu
Slide 25: Tenant Concentration, Lease Profile & Lease Overview
TENANT CONCENTRATION, LEASE PROFILE & LEASE OVERVIEW - AS AT 29 FEBRUARY 2024 NZL expects tenant diversification to increase as it continues to grow its asset base. NZL’s Weighted Average Lease Term (WALT) is currently 12.7 years* (100% occupancy). NZL’s pastoral farm leases all have three, six and
Slide 26: Carbon & Dairy Market Updates
CARBON & DAIRY MARKET UPDATES Carbon Carbon markets rallied strongly in 2023 with the price of New Zealand Emissions Units (NZUs) rising to $75 from $33. This comes after the government made a U-turn on it’s alignment with Climate Change Amendment Regulations, which lay out rules surrounding auction
Slide 27: Key People
KEY PEOPLE New Zealand Rural Land Co The Rural Land Investors ROB CAMPBELL SARAH KENNEDY TIA GREENAWAY CHRISTOPHER SWASBROOK Independent Chair Independent Director Independent Director Non-Independent Director & Founder Chancellor - AUT CEO - Calocurb Limited Hailing from Ngāti Tūwharetoa and Managi
Slide 28: Foreign Ownership Rules & Levels
FOREIGN OWNERSHIP RULES & LEVELS New Zealand Current Listed Current NZL Buyer Company Foreign Foreign NZL is highly advantaged Ownership Rules Ownership because it is a Under the Overseas Investment As at 31 December 2023, New Zealand buyer Amendment Act 2021, NZL can have NZL had foreign domiciled
Slide 29: Index Inclusions and Broker Research Coverage
INDEX INCLUSIONS AND BROKER RESEARCH COVERAGE Index Inclusions Broker Research Coverage FTSE Global Micro Cap Index S&P / NZX All Real Estate Index Nicholas Hill Arie Dekker nicholas.hill@craigsip.com arie.dekker@jarden.co.nz Kieran Carling Vishhal Bhula kieran.carling@craigsip.com vishal.bhula@jard
Slide 30: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS Richard Milsom Xavier Lynch richard@nzrlm.co.nz xavier@nzrlm.co.nz +64 21 274 2476 +64 27 282 8046 Level 1 Level 1 85 Fort Street 85 Fort Street Auckland Central Auckland Central Auckland 1010 Auckland 1010 New Zealand New Zealand New Zealand Rural Land Company 30
Slide 31: Rural Land Co
New Zealand Rural Land Co The Rural Land Investors New Zealand Rural Land Company +64 9 217 2905 Level 1, 85 Fort Street info@nzrlc.co.nz Auckland Central www.nzrlc.co.nz Auckland 1010 nzrlc New Zealand nzrlc LISTED ON: New Zealand Rural Land Company 31
New Zealand Rural Land Company — FY2023 Earnings Presentation on 6ix