Rural Funds Group (RFF) H2 2024 earnings summary

Executive summary

• Property revenue rose 8% year-over-year to $88.4m, driven by new macadamia orchard leases, lease indexation, and rent reviews on cattle properties.

• Earnings reached $117.2m (30.3 cents per unit), with distributions of 11.73 cents per unit, matching forecasts.

• Portfolio diversification and capital growth were enhanced by continued macadamia orchard development and strategic leasing.

• Adjusted funds from operations (AFFO) were 11.0 cents per unit, supported by new rental income from capex on macadamia assets.

• Independent valuations covered 69% of the portfolio, resulting in a net valuation increase of $97.3m.

Financial highlights

• Adjusted NAV per unit increased 7.2% to $3.14, mainly due to revaluations and capex.

• Adjusted total assets rose 13.3% to $2.05b, with $241.1m increase from revaluations and capex.

• AFFO was 11.0 cents per unit, up 2.8% year-over-year but slightly below guidance due to weather-related CapEx delays and lower cattle prices.

• Property revenue: $88.4m (up from $81.8m year-over-year).

• Total comprehensive income: $117.2m (up from $115.5m year-over-year).

Outlook and guidance

• FY25 AFFO is forecast at 11.4 cents per unit, a 3.6–4% increase, with distributions expected to remain flat at 11.73 cents per unit.

• Key sensitivities for the outlook include interest rates and macadamia prices, with the latter assumed at $3.70/kg in forecasts.

• No distribution growth is expected until the payout ratio falls below 100%.

• Ongoing leasing of macadamia, cropping, and cattle properties, with management pursuing further leases and partial sales.

• Development pipeline and structural rental growth expected to support future earnings.