Rural Funds Group (RFF) H1 2026 earnings summary

Executive summary

• Net property income rose 6.8% year-over-year to $48.6 million, driven by new macadamia orchard developments and annual lease indexation.

• Adjusted funds from operations (AFFO) were $21.5 million (5.53 cents per unit), with distributions totaling 5.87 cents per unit, both on track for full-year guidance.

• Asset sales and independent valuations confirmed asset values, with $60.7 million in divestments completed at or above book value, supporting capital expenditure and reducing gearing.

• Gearing remained stable at 39.1% despite significant development CapEx, funded by asset sales.

• Portfolio value reached $1.99 billion across 61 properties, with 83% leased and a weighted average lease expiry (WALE) of 13.2 years.

Financial highlights

• Revenue for the half year was $70.2 million, up from $62.2 million year-over-year.

• Net farming income was $1.1 million, with a stronger second half expected from macadamia and cotton harvests.

• Adjusted net asset value per unit increased to $3.10, mainly due to mark-to-market gains on interest rate swaps.

• Interest expense rose by $4 million due to less capitalized interest as development programs completed.

• Distributions of 8.80 cents per unit were declared and paid during the half year, totaling $34.3 million.

Outlook and guidance

• Full-year AFFO and distribution guidance reaffirmed at 11.7 and 11.73 cents per unit, respectively.

• Second half farming income expected to be significantly higher due to crop harvests.

• CapEx requirements are forecast to decline significantly in FY 2027 as major developments near completion.

• AFFO-accretive proposals regarding the J&F Guarantee to be presented to unitholders.

• Management continues to seek growth in agricultural and related industries.