Rural Funds Group · ASX:RFF
Rural Funds — HY22 Earnings Presentation
29 slides from Rural Funds's earnings presentation, Feb 18, 2022
Slide 1: Financial results presentation half-year ended 31 December 2021
For personal use only Managed by: Financial results presentation half-year ended 31 December 2021 18 February 2022
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. HY22 financial results 2. Capital management Presenters 3. Portfolio and strategy update 4. Conclusion David Bryant Tim Sheridan Daniel Yap James Powell 5. Appendices Managing Director Chief Operating Chief Financial General Manager – Officer Officer Investor Relati
Slide 4: HY22 financial results
Learn more: 1 For personal use only HY22 financial results Cattle grazing at Cobungra, in Victoria’s high country, October 2021. 4
Slide 5: Key activities and highlights
Key activities and highlights Ongoing expansion of the portfolio to drive earnings growth. For personal use only • Entitlement Offer completed August 2021: • $100.0m raised to fund the development of 1,000 ha of macadamia orchards and HY22 results highlights asset acquisitions (8.3 GL water entitlem
Slide 6: Property movements
Property movements Acquisitions in cropping, cattle and macadamia sectors. For personal use only Adjusted property assets movements ($m) by sector1 • Key contributors to the adjusted property assets movements: ▪ Cropping: acquisition of 8.3 GL Murrumbidgee Groundwater entitlement and Baamba Plains f
Slide 7: Earnings and balance sheet summary
Earnings and balance sheet summary HY22 AFFO and DPU on track for full-year forecasts. FY23 forecast distributions announced. Income and earnings metrics For personal use only 6 months ended 6 months ended Property revenue increased primarily due to income from the increased J&F Guarantee, acquisiti
Slide 8: Capital management
2 Capital For personal use only management Learn more: Header harvesting chickpeas at sunset, Lynora Downs, central Queensland, November 2021. 8
Slide 9: Capital management
Capital management Refinance of debt facility and forward dated interest rate hedges acquired. Equity Debt For personal use only Item Details Item Details Entitlement Offer completed August 2021 ($100.0m at $2.47 per unit) to provide Increase of debt facility limit, extension of tenor and increase o
Slide 10: Debt facility and interest rate hedges
Debt facility and interest rate hedges Additional forward dated interest rate hedges to decrease future weighted average hedge rate. Debt facility metrics Debt facility tenor For personal use only 31 December 2021 30 June 2021 $450m $400m Term debt facility limit 1, 2 $520.0m $380.0m Term debt drawn
Slide 11: Portfolio and strategy update
For personal use only Learn more: 3 Portfolio and strategy update Macadamia orchard developments at Riverton, Rockhampton – central Queensland, December 2021. 11
Slide 12: Portfolio overview
Portfolio overview RFM has experience developing and operating agricultural properties in all sectors in which RFF leases assets. For personal use only Assets map, sector information and key lessees1 Note: 1. Shaded areas denote climatic zones differentiated by rainfall seasonality (source: Bureau o
Slide 13: Central Queensland cattle and cropping properties
Central Queensland cattle and cropping properties Comanche and Homehill leased to AAC following productivity developments.1 Central Queensland properties Leasing update: For personal use only • Australian Agricultural Company (ASX: AAC) have entered a 10-year lease of Comanche and Homehill, commenci
Slide 14: Macadamia orchards update
Macadamia orchards update Stage one macadamia orchard developments expected to be materially complete in FY22. For personal use only Macadamia orchard locations Development update: • ‘Stage one’ macadamia orchard development of 1,000 ha is on track to be materially complete in FY22. • 375 ha develop
Slide 15: Revenue and WALE
Revenue and WALE Organic growth from macadamia, cattle and cropping development pipeline. For personal use only FY22f revenue by sector and year of lease expiry1 Weighted average lease expiry (WALE) = 9.2 years FY22 revenue ($)m Year of lease expiry Almonds Cattle Vineyards Cropping Macadamias Note:
Slide 16: Counterparties and indexation
Counterparties and indexation Growth in lease revenue supported by annual indexation and market rent reviews. Revenue by lessee type1 For personal use only Revenue by lease indexation mechanisms1,2 • Most lease revenue is sourced from listed and corporate food- producing businesses. • Broadly, agric
Slide 17: Sustainability
Sustainability Evolution of RFM’s approach to environmental, social and governance (ESG) initiatives and developing a sustainability framework. For personal use only Pre-FY21 FY21 FY22 Tahen Project update • Policies and procedures which address ESG • Expanded ESG reporting in Annual Report to • Pro
Slide 18: Conclusion
4 For personal use only Conclusion Learn more: Cotton under pivot irrigation, Lynora Downs – central Queensland, February 2022. 18
Slide 19: Performance metrics
Performance metrics Established track record of maintaining distribution growth of at least 4% per annum. For personal use only Performance metrics (includes FY22 and FY23f)1 Note: 1. FY23 DPU to include franking credits. Cash distribution to be at least 11.73 cpu. 19
Slide 20: Conclusion
Conclusion Development pipeline in macadamia, cropping and cattle sectors. For personal use only 1. Entitlement Offer completed August 2021 provided funding for acquisitions and RURAL FUNDS GROUP (ASX: RFF) developments: • Stage one of macadamia developments on track to be materially complete • ASX-
Slide 21: Appendices
5 For personal use only Appendices Learn more: Expanded macadamia tree nursery, Bundaberg, central Queensland, February 2022. 21
Slide 22: HY22 results – summarised comprehensive income
HY22 results – summarised comprehensive income Summarised statement of comprehensive income 6 months ended 6 months ended For personal use only • Property revenue has increased primarily due to the income from new 31 December 2021 31 December 2020 acquisitions, development capital expenditure, lease
Slide 23: HY22 results – AFFO composition
HY22 results – AFFO composition Composition of AFFO (pre-tax) 6 months ended 6 months ended For personal use only • AFFO is pre-tax and excludes fair value adjustments, depreciation and impairment 31 December 2021 31 December 2020 to represent RFF’s property rental business. $ $ Property revenue 34,
Slide 24: HY22 results – reconciliation of net profit to AFFO
HY22 results – reconciliation of net profit to AFFO Reconciliation of net profit after tax to AFFO For personal use only 6 months ended 6 months ended • Non-cash items added back to reconcile net profit after tax to AFFO. 31 December 2021 31 December 2020 $ $ Net profit after income tax 38,207,000 5
Slide 25: HY22 results – summarised balance sheet
HY22 results – summarised balance sheet Summarised balance sheet For personal use only As at As at 31 December 2021 30 June 2021 • Water entitlements are recorded as intangible assets, and held at the $ $ lower of cost less accumulated impairment or fair value in accordance with accounting standards
Slide 26: HY22 results – total assets reconciliation
HY22 results – total assets reconciliation Total assets reconciliation Adjustment for Financial assets For personal use only Investment Bearer Intangible Property-owner Plant and water Adjusted – Deposits5 Other assets Total property plants assets1, 3 occupied equipment entitlements at total assets
Slide 27: Valuations and valuers
Valuations and valuers Policy to conduct independent valuations at least every two years and rotation of valuers every five years. For personal use only 27
Slide 28: 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 29: Managed by Rural Funds Management Limited
For personal use only Managed by: Rural Funds Management Limited ACN 077 492 838 T 02 6203 9700 AFSL 226701 E investorservices@ruralfunds.com.au Follow us: Level 2, 2 King Street Deakin ACT 2600 W www.ruralfunds.com.au David Bryant Dan Edwards Craig Hall Sam Hazzard Mengyi Liu Sandra McBryde Matt Mi