New Zealand Rural Land Company (NZL) H1 2024 earnings summary

Executive summary

• Net profit after tax for HY24 was $12.4 million, with AFFO of $3.6 million, and AFFO per share up 26.8% year-over-year to 1.94 cps; EPS rose to 9.18 cps.

• Portfolio diversification improved with acquisitions in apple orchards and forestry, reducing dairy exposure and adding new tenants; 25% of the portfolio was sold to Roc Partners/Land Trust for $44.2 million, supporting growth and capital recycling.

• Dividend payments resumed at 1.46 cps (75% of AFFO), with a dividend reinvestment plan reinstated and a share buyback program active.

• Sustainability initiatives advanced, including native forest regeneration, pest control, and a green loan aligned with UN SDG 15.

• Rental income increased to $9.1 million from $6.9 million year-over-year.

Financial highlights

• Total assets reached $423.5 million and net asset value (NAV) was $216.9 million as of 30 June 2024; NAV per share at $1.552.

• Gearing reduced to 30.5% from 36.2% year-over-year.

• AFFO per share increased to 1.94 cps from 1.53 cps in HY23 (+26.8%).

• Dividend of 1.46 cps declared, with a payout ratio of 75% of HY24 AFFO.

• Weighted average lease term (WALT) increased to 12.7 years.

Outlook and guidance

• FY24 AFFO forecasted at $7.0m–$7.5m (5.01–5.36 cps), driven by acquisitions and CPI-linked rental increases.

• Dividend payout policy set at 60–90% of AFFO, with current payout at 75% and dividend reinvestment plan reinstated.

• No further small acquisitions planned for FY24 or early FY25; future acquisitions will be opportunity-driven.

• Inflation-linked leases and CPI rent reviews expected to drive further rental growth.

• Cash from Roc Partners/Land Trust transaction to be deployed for further growth opportunities.