Gladstone Land (LAND) Q2 2024 earnings summary

Executive summary

• Owns 168 farms across 15 states, totaling about 112,000 acres and $1.5 billion in farmland and water assets, leased to over 90 tenants growing more than 60 crop types.

• Portfolio is diversified across fruits, nuts, vegetables, and permanent crops, with a focus on fresh produce and secure water assets.

• No new farm acquisitions in Q2 2024; completed a major sale of a 3,748-acre Florida farm for $65.7 million, recognizing a $10.4 million gain.

• Implemented and continued share repurchase programs for Series B and C Preferred Stock, and ongoing Series E Preferred Stock offering.

• Over 99.9% of borrowings are at fixed rates, with a weighted average interest rate of 3.4% for 3.9 years.

Financial highlights

• Q2 2024 net loss to common shareholders was $6.7 million ($0.19/share), compared to net income of $1.7 million in Q2 2023.

• Total operating revenues for Q2 2024 were $21.3 million, up 0.4% year-over-year; six-month revenues were $41.5 million, down 2.0%.

• Adjusted FFO was $3.7 million ($0.103/share), up slightly from $3.6 million ($0.102/share) year-over-year.

• Dividends declared per common share were $0.14, up from $0.138 in the prior year quarter.

• Estimated NAV per common share as of June 30, 2024, was $17.59, down from $18.50 at March 31, mainly due to lower valuations of certain permanent crop farms.

Outlook and guidance

• Acquisition activity remains slow due to high cost of capital; management expects to remain cautious until interest rates decrease.

• Plans to use available liquidity for additional farm acquisitions and capital improvements as opportunities arise.

• Participation rent increases from crop price recovery expected to impact 2025 results, not 2024.

• Management expects to resolve tenancy issues on six properties (13 farms) by year-end through leasing, sales, or auctions.

• Long-term outlook for farmland and fresh produce remains positive, with expectations of inflation and rising land values.