Rural Funds Group · ASX:RFF
Rural Funds — H1 2024 Earnings Presentation
24 slides from Rural Funds's earnings presentation, Feb 23, 2024
Slide 1: Financial results presentation
Managed by: Financial results presentation for the half-year ended 31 December 2023 23 February 2024
Slide 2: Disclaimer and glossary of terms
Disclaimer and glossary of terms Disclaimer 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 security, incorporati
Slide 3: Contents and Presenters
Contents Contents Presenters 1. Financial results summary 1. Financial results summary David Bryant Tim Sheridan Managing Director Chief Operating Officer 2. Strategy 2. Portfolio and strategy update 3. Portfolio and sustainability James Powell Daniel Yap 3. Outlook and conclusion Chief Financial Of
Slide 4: Financial results summary
1 Financial results summary Learn more: Maryborough macadamia orchard – leased to TRG JV, Maryborough, Queensland, February 2024.
Slide 5: Earnings and balance sheet summary
Earnings and balance sheet summary Property revenue increased 12% primarily due to macadamia developments. 6 months ended 6 months ended Income and earnings metrics 31 December 2023 31 December 2022 Property revenue increased $4.6m, or 12.4%, primarily due to rental income earned on Property revenue
Slide 6: Valuations summary and NAV bridge
Valuations summary and NAV bridge Adjusted NAV increased 5% due to external asset revaluations. Adjusted NAV per unit movement External revaluations received 1H241 • Adjusted NAV per unit increased $0.14, or 4.8%. • Independent valuations arranged for $438.5m of assets representing 24.3% of the ‒ In
Slide 7: Capital management
Capital management Sufficient facility headroom for capex requirements. Debt facility limits, maturity (FY) and headroom6 • Extension and limit increase of debt facilities implemented in 1H24: ‒ increased to $870.2m (FY23: $794.5m), comprising floating rate facility $774.5m (FY23: $694.5m) plus fixe
Slide 8: Portfolio and strategy update
Riverton 426 ha (orchard area) 2 Portfolio and strategy update Learn more: Rookwood Weir (foreground – not an RFF asset) and the Riverton macadamia orchard – leased to TRG JV, Rockhampton region, central Queensland, February 2024.
Slide 9: Strategy Overview
Strategy Overview To generate capital growth and Australia's only diversified ASX-listed agricultural real estate investment trust. income from developing and leasing agricultural assets. Target Asset map1 FY24f revenue by sector2 distribution growth of 4% p.a. Leasing model Maintain a majority of l
Slide 10: Lessees
Lessees High quality lessees. Majority are listed or corporate entities. Percentage income Description Sector Lessee since (by FY24f revenue) Subsidiary of Olam Group, Almonds Singapore-listed (SGX: O32) 2015 23% US asset manager joint venture with global institutional Macadamias 2023 15% investor S
Slide 11: Weighted average lease expiry and indexation
Weighted average lease expiry and indexation Long dated WALE provides stability of income and long-term rental growth via a mix of indexation mechanisms. Indexation mechanisms WALE profile (by FY24f revenue) 12.8 years WALE 11
Slide 12: Cropping property developments and transactions
Cropping property developments and transactions Partial sale and lease of two cropping properties in documentation phase.1 Proposed transaction overview1 Mayneland Baamba Plains • RFF to sell 50% interest in each property (Mayneland and Baamba Plains) to operator. • Operator will lease 100% of prope
Slide 13: Macadamia orchard developments
Macadamia orchard developments Accretive development pipeline to provide ongoing property revenue growth. 1. Ground preparation 2. Irrigation infrastructure 3. Planting 4. Establishment Key development stages and activities Initial ground preparation at Dowlings, Laying infield irrigation pipe at Do
Slide 14: Sustainability
Sustainability Continued progress of sustainability initiatives. FY23 achievements 1H24 focus areas GHG emissions Sustainability reporting Safety Carbon projects GHG emissions: progress Implemented improvements to Scope 1 and Scope 2 emissions quantification Conditionally registered two projects (Hu
Slide 15: Outlook and conclusion
3 Outlook and conclusion Learn more: Cotton harvest at Mayneland, central Queensland, June 2023.
Slide 16: Outlook
Outlook FY24 forecast AFFO 11.2 cpu and distributions 11.73 cpu. • Resilient asset values: ‒ $438.5m of assets externally valued (representing 24.3% of the adjusted total assets) providing $77.6m increase in valuations. • Progressing first of several planned transactions which seek to improve gearin
Slide 17: Appendices
4 Appendices Learn more: Wyseby (adjacent to Rewan cattle property) – leased to private farming business, central Queensland, February 2024.
Slide 18: Appendix A – summarised comprehensive income
Appendix A – summarised comprehensive income Summarised statement of comprehensive income • Revenue from farming operations relates to sale of farming proceeds (primarily cattle, 6 months ended 6 months ended cropping, sugar and macadamias). 31 December 2023 31 December 2022 $ $ • Other income mainl
Slide 19: Appendix B – AFFO composition
Appendix B – AFFO composition Composition of AFFO (pre-tax) 6 months ended 6 months ended • Adjusted funds from operations (AFFO) is pre-tax and excludes fair value 31 December 2023 31 December 2022 adjustments, depreciation and impairment to represent RFF’s operating result. $ $ • Property expenses
Slide 20: Appendix C – reconciliation of net profit to AFFO
Appendix C – reconciliation of net profit to AFFO Reconciliation of net profit after tax to AFFO 6 months ended 6 months ended • Non-cash items added back to reconcile net profit after tax to AFFO. 31 December 2023 31 December 2022 • Key adjustments include: $ $ Net profit after income tax 43,754,00
Slide 21: Appendix D – summarised balance sheet
Appendix D – summarised balance sheet Summarised balance sheet • Water entitlements are recorded as intangible assets and held at the As at As at lower of cost less accumulated impairment or fair value in accordance 31 December 2023 30 June 2023 with accounting standards and ASIC guidance. The adjus
Slide 22: Appendix E – total assets reconciliation
Appendix E – total assets reconciliation Total assets reconciliation Adjustment for Investment Bearer Intangible Property-owner Financial assets Plant and water Adjusted Other assets Total property plants assets1, 3 occupied – property2, 3 equipment entitlements at total assets fair value1, 3 $ $ $
Slide 23: Appendix F – Property compendium
Appendix F – Property compendium Policy to conduct independent valuations at least every two years. Note: 1. For full details of asset valuation methodology please refer to Financial Statements. Total adjusted property assets include cattle finance lease and other assets $21.0m, plant and equipment
Slide 24: Rural Funds Management Limited – For further information
Managed by: Rural Funds Management Limited For further information: ACN 077 492 838 James Powell: AFSL 226701 E jpowell@ruralfunds.com.au Level 2, 2 King Street Deakin ACT 2600 T +61 2 6203 9742 T 02 6203 9700 Tim Sheridan: E investorservices@ruralfunds.com.au E tsheridan@ruralfunds.com.au W www.rur