New Zealand Rural Land Company (NZL) H2 2024 earnings summary

Executive summary

• Net profit after tax reached $23.1 million for FY24, up 113% year-over-year, driven by higher rental income, fair value gains, and portfolio expansion, with AFFO of $7.1 million and a 25% equity sale to Roc Partners for $44.2 million, validating the growth strategy and enabling further diversification and debt repayment.

• Portfolio expanded to 17,503 hectares, with diversification into forestry and horticulture, and major acquisitions in apple orchards and forestry estates.

• AFFO per share rose 13.6% to 4.94 cps, with total dividends of 4.00 cps (~80% of AFFO), and a dividend reinvestment program in place.

• Gearing reduced to 29.6% from 36.2%, NAV per share increased to $1.603, and weighted average lease term rose to 12.5 years.

• Sustainability initiatives advanced, including native regeneration projects and a green loan programme.

Financial highlights

• Net profit after tax was $23.08 million, with EPS up 104% to 16.47c and record AFFO of $7.1 million (4.94 cps), up 13.6% year-over-year.

• Total assets grew 19% to $441.9 million, NAV per share increased from $1.25 at IPO to $1.603 as of December 31, 2024.

• Dividend of 4.00 cps declared, representing ~80% of AFFO, with a dividend reinvestment plan reducing cash outflow.

• Share buyback program repurchased 88,804 shares in FY24, totaling 710,131 shares at $0.89 average price since June 2023.

• Weighted average cost of debt at 5.9%, with 65% of debt hedged.

Outlook and guidance

• FY25 AFFO forecasted at $7.5 million–$8.0 million (5.25–5.60 cps), with dividend guidance of 4.20–4.50 cps, maintaining a 60–90% payout ratio.

• Rental growth expected from CPI-linked lease reviews, with 31% of pastoral and 100% of forestry assets up for review in 2025.

• Positive outlook for agricultural, dairy, and carbon markets, supporting tenant strength and asset values.

• Recent and upcoming acquisitions expected to further increase rental revenue.

• Focus on maintaining debt below 40% of total assets and interest coverage ratio above 1.6.