Rural Funds Group (RFF) H2 2024 earnings summary

Executive summary

• Revenue from property leasing rose 8% year-over-year, mainly from new macadamia orchard leases, lease indexation, and rent reviews on cattle properties.

• Earnings reached AUD 117.2 million (30.28 cents per unit), with distributions of AUD 0.1173 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 AUD 0.11 per unit, supported by new rental income from capex on macadamia assets.

• Independent valuations covered about two-thirds of the portfolio, resulting in a net valuation increase of AUD 97 million.

Financial highlights

• Property revenue was AUD 88.4 million, up from AUD 81.8 million year-over-year.

• Net asset value per unit increased 7% to AUD 3.14, mainly due to revaluations and capex.

• Adjusted total assets rose 13.3% to AUD 2.05 billion, with a AUD 241.1 million increase from revaluations and capex.

• AFFO was AUD 42.4 million, up from AUD 41.1 million year-over-year, but slightly below guidance due to weather-related CapEx delays and lower cattle prices.

• Distributions per unit (DPU) were AUD 0.1173, in line with forecasts.

Outlook and guidance

• FY25 forecast AFFO is AUD 0.114 per unit, a 4% increase, with distributions expected to remain flat at AUD 0.1173 per unit.

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

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

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

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