Rural Funds Group (RFF) H2 2026 earnings summary

Executive summary

• Portfolio valued at AUD 1.8 billion, comprising 57 diversified agricultural properties across five sectors and multiple climatic zones, mainly leased to corporate and institutional tenants with a WALE of 14.8 years.

• FY26 results met forecasts, with earnings rising to AUD 124.1 million, up AUD 103.8 million year-over-year, driven by asset sales above book value, productivity improvements, and interest rate swap gains.

• Major asset divestments of AUD 315 million (six properties and water entitlements) at an average 17.9%–18% premium to book value, improving balance sheet flexibility and reducing gearing.

• Sustainability initiatives advanced, including emissions disclosure and autonomous vehicle trials to enhance operational efficiency.

• Ongoing development and leasing strategy focused on enhancing productivity, capital growth, and future AFFO growth.

Financial highlights

• Net property income rose 5.7%–6% year-over-year to over AUD 100 million, driven by new leases, indexation, and rentalised capex.

• Adjusted funds from operations (AFFO) reached AUD 45.4 million (11.7 cents per unit), and distributions were 11.73 cents per unit, both in line with forecasts and a 100% payout ratio.

• Adjusted NAV per unit increased 4.5% to AUD 3.22, mainly due to property revaluations and swap gains.

• Gearing reduced to 31.8% (pro forma), within the 30–35% target range.

• Four distributions paid, totaling 11.73 cents per unit, with a payout ratio of 100.6%.

Outlook and guidance

• FY27 AFFO and distributions forecast unchanged at 11.7 and 11.73 cents per unit, respectively, with a 5.4% distribution yield based on a closing price of AUD 2.18 per unit.

• No AFFO growth expected due to lower macadamia prices and reduced yields on dryland crops.

• Additional asset sales planned for FY27 to recycle capital into higher-return opportunities and support potential acquisitions.

• FY27 capital expenditure forecast at AUD 46.7 million, fully funded by AUD 301 million in undrawn debt headroom.