New Zealand Rural Land Company (NZL) H2 2024 earnings summary

Executive summary

• Roc Partners acquired 25% of the portfolio for $44.2 million, validating the growth strategy, enabling diversification, and providing funds for debt repayment and new acquisitions.

• Four accretive acquisitions in FY 2024, including apple orchards and forestry estates, increased portfolio diversity, rental yield, and expanded holdings.

• Net profit reached $23.08 million, up 113% year-over-year, driven by higher rental income and fair value gains.

• Sustainability initiatives advanced, including native regeneration projects and a green loan programme.

• Rental income increased 29% year-over-year to $19.9 million, reflecting portfolio expansion and new leases.

Financial highlights

• Net Profit After Tax reached $23.08 million, with record Earnings Per Share of 16.47c.

• AFFO per share rose 13.6% to 4.94cps ($7.1 million aggregate), and FFO per share was 5.10c, up 8%.

• NAV per share increased to $1.603 as of December 31, 2024; total assets grew 19% to $441.9 million.

• Dividend of 4.00cps declared, representing 80% of AFFO.

• Share buyback program repurchased 88,804 shares at $0.89 average, totaling 710,131 shares since June 2023.

Outlook and guidance

• FY25 AFFO forecasted at $7.5m–$8.0m (5.25–5.60cps); dividend guidance set at 4.20cps–4.50cps, maintaining 80% payout.

• Rental growth expected from CPI-linked lease reviews, with 31% of pastoral and 100% of forestry assets up for review in 2025.

• Positive outlook for dairy and carbon markets, supporting tenant strength and asset values.

• Committed to $9.9 million in new investment property purchases as of year-end.

• Focus on maintaining debt below 40% of total assets and interest coverage ratio above 1.6.