Rural Funds Group (RFF) H2 2025 earnings summary

Executive summary

• Net property income rose 9.2% to $95.1m, driven by higher rental income from macadamia developments and a return to profit in farming operations, with AFFO up 4.5% year-over-year, slightly above guidance.

• Distributions per unit of 11.73 cents matched forecasts, with a payout ratio of 100–102%.

• Gearing increased marginally due to CapEx, but asset divestments of $69.7m–$89m helped manage leverage.

• 84% of assets are leased, with a WALE of 13.9 years, supporting stable income.

• Independent valuations on 68% of the portfolio resulted in a 1.2% uplift in book values.

Financial highlights

• Net property income rose 9.2% to $95.1m, driven by new macadamia orchard leases and annual indexation.

• Net farming income turned positive, mainly due to improved commodity prices.

• AFFO per unit grew 4.5% to 11.5 cents, exceeding forecasts.

• Adjusted NAV per unit decreased from $3.14 to $3.08, mainly due to mark-to-market of interest rate swaps.

• Earnings per unit dropped to 5.22 cents from 30.28 cents, mainly due to swap revaluations and lower property revaluations.

Outlook and guidance

• FY26 AFFO forecast at 11.7 cents per unit, with distributions expected to remain at 11.73 cents per unit and a payout ratio of 100%.

• Revenue growth for FY26 projected in the low to mid-teens, but AFFO growth guided at 2% due to lower rent on an almond orchard and limited interest rate cuts.

• Major priorities include continued development of Rookwood Farms and Kaiuroo, and non-core asset sales.

• FY26 capital expenditure of $96.9m–$100m to be funded from bank debt facility headroom and asset divestments.

• Distribution yield forecast at 6.0% based on recent unit price.