Rural Funds Group · ASX:RFF
Rural Funds — FY2022 Earnings Presentation
23 slides from Rural Funds's earnings presentation, Sep 12, 2022
Slide 1: FY22 results investor roadshow presentation
Managed by: FY22 results investor roadshow presentation September 2022
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 Chief Operating Officer of RFM. RFF is a stapled sec
Slide 3: Contents and Presenters
Contents 1. FY22 financial results overview Presenters 2. Acquisition, development and leasing update 3. Portfolio and forecasts update David Bryant Tim Sheridan James Powell Managing Director Chief Operating General Manager – Officer Investor Relations & Marketing 3
Slide 4: FY22 financial results overview
FY22 financial results overview Learn more: Dryland wheat crop, Lynora Downs, central Queensland, July 2022. 4
Slide 5: Summary
Summary Active period of acquisitions, developments and leasing activity. Key activities by sector Key metrics Cattle • Entered a 10-year lease with Australian Agricultural Company (ASX: AAC) for two existing properties. Portfolio Adjusted NAV • Entered a 20-year lease with Mort & Co for two propert
Slide 6: Earnings and balance sheet summary
Earnings and balance sheet summary Earnings per unit up 52% and adjusted net asset value per unit up 24%. Income and earnings metrics 12 months ended 12 months ended Movement Property revenue increased primarily due to income from the acquisitions, increased J&F Guarantee, 30 June 2022 30 June 2021
Slide 7: Property movements
Property movements Adjusted property asset increase of $338m mainly driven by acquisitions of $179m and revaluations of $134m. Adjusted property assets movements ($m) by sector1 Primary contributors to adjusted property assets movement: Acquisitions of $179.2m including: • Cattle properties $44.5m –
Slide 8: Capital management
Capital management Debt facility refinanced and additional forward dated interest rate hedges entered into. Equity Debt Item Details Item Details Entitlement Offer completed August 2021 ($100.0m at $2.47 per unit) to Increase of debt facility limit, extension of tenor and updated covenants (LVR Equi
Slide 9: Debt facility
Debt facility Proportion of debt hedged 40% and weighted average duration of hedges 8.6 years. Debt facility metrics Debt facility tenor 30 June 2022 30 June 2021 $450m $410.0m 1,2 $400m Term debt facility limit $520.0m $380.0m $64.9 Term debt drawn $455.1m $344.1m $350m Debt facility $345.1 Headroo
Slide 10: Acquisition, development and leasing update
Acquisition, development and leasing update Learn more: Macadamia developments at Riverton (foreground) and Rookwood Weir construction (background), central Queensland, May 2022. 10
Slide 11: Acquisition and development strategy
Acquisition and development strategy Rural Funds Group is Australia’s first diversified agricultural real estate investment trust. Acquisition and development strategy overview Spectrum of investment opportunities1 Lease agricultural assets predominantly to corporate lessees. Diversify assets by agr
Slide 12: Macadamia orchards lease
Macadamia orchards lease RFM has entered an agreement to lease up to 3,000 ha of macadamia orchards.1 • 3,000 ha of macadamia orchards have been leased to a company managed by The Rohatyn Group Maryborough development sites (TRG) on behalf of a joint venture between TRG and a global institutional in
Slide 13: Macadamia orchards lease
Macadamia orchards lease 40-year lease with The Rohatyn Group for 3,000 ha of macadamia orchards forecast to be developed by 2024.1 Development timetable and capex for TRG 3,000 ha lease1 • Key features of the lease: <FY22 FY23f FY24f FY25-29f Total • rent paid on cumulative capex deployed at a rate
Slide 14: Productivity improvements
Productivity improvements Productivity improvements complete on Lynora Downs and being implemented on Mayneland and Baamba Plains. Lynora Downs productivity developments • Since the acquisition of Lynora Downs in December 2016, RFM has: • increased water storages from 10,000 ML to 14,142 ML • increa
Slide 15: Acquisition, development and leasing activity
Acquisition, development and leasing activity Unleased development pipeline of $101m of cattle and cropping properties, including assets for an additional 2,000 ha macadamia orchard development.1 Central Queensland properties Summary of activities Property Sector Strategy Activity • Leased to Clarke
Slide 16: Portfolio and forecasts update
Learn more: Portfolio and forecasts update Harvesting cotton at cropping property Lynora Downs, central Queensland, June 2022. 16
Slide 17: Portfolio overview
Portfolio overview 68 properties located in multiple climatic zones. Assets map, sector information and key lessees1 Note: 1. Shaded areas denote climatic zones differentiated by rainfall seasonality (source: Bureau of Meteorology); see Climatic Diversification discussion paper dated 20 June 2016. N
Slide 18: Property valuations and capital expenditure
Property valuations and capital expenditure Policy to conduct independent valuations at least every two years and rotation of valuers every five years. Valuations, valuers and capex by sector1,2 Notes: 1. Where no independent valuation has been conducted since acquisition, the purchase price and acq
Slide 19: Revenue by sector and indexation type
Revenue by sector and indexation type Improved diversification of revenue across agricultural sectors. Majority of leases with inflation-linked indexation (CPI and market rent reviews). FY23f revenue by sector1 Lease indexation mechanisms (by FY23f revenue)1 Notes: 1. Figures shown are subject to ro
Slide 20: Revenue and WALE
Revenue and WALE Increased weighted average lease expiry (WALE) of 11.8 years and increased revenue from corporate lessees. FY23f lease revenue by year of lease expiry1 Corporate lessees2 71% of FY23f lease revenue from corporate lessees Notes: 1. WALE is calculated as the FY23 attributable forecast
Slide 21: Sustainability
Sustainability RFM has continued to progress sustainability initiatives. Summary of largest lessees sustainability initiatives1 Net Lessee Lease Summary of sustainability initiatives TCFD zero • During FY22, RFM underwent a review process to identify appropriate target sustainability reporting frame
Slide 22: FY23 forecasts
FY23 forecasts Higher assumed interest rates impacted FY23 forecast AFFO by 2.0 cpu. Additional AFFO generation expected as capital is deployed on macadamia developments (FY23 to FY29) and other assets in $101m development pipeline are leased.1 Performance metrics (includes FY23f)1,2 Note: 1. FY23 f
Slide 23: RFM leadership team
Managed by: Rural Funds Management Limited (RFM) RFM leadership team ACN 077 492 838 AFSL 226701 Level 2, 2 King Street Deakin ACT 2600 David Bryant Tim Sheridan Daniel Yap Managing Director, Chief Operating Officer, Chief Financial Officer, 25 years 13 years 9 years T 02 6203 9700 E investorservice