Rivco Australia (RIV) Q2 2024 TU earnings summary

Executive summary

• Portfolio of 87 GL of permanent water entitlements valued at $354 million as of 30 June 2024, focused on providing flexible water supply solutions to Australian farmers.

• Settled sale of 2.8 GL of NSW high security entitlements to Treasury Wine Estates, with proceeds used to reduce debt and enhance balance sheet flexibility.

• No new leases entered during the quarter, but several forward contracts were signed to help irrigators hedge against price volatility.

Financial highlights

• Post-tax NAV at 30 June 2024 was $1.51 per share, down 10 cents from the previous quarter; pre-tax NAV was $1.60 per share, down 14 cents.

• NAV decline attributed to softening water entitlement values and payment of a 3.6 cent fully franked dividend in April 2024.

• 1-month, 3-month, 6-month, and 12-month performance were -1.63%, -3.01%, -3.88%, and -10.63% respectively; since inception, NAV up 95.06%.

• Net operating cash outflow of $3.6 million for the quarter, mainly due to a significant income tax payment and higher interest costs.

• Net cash inflows of $36 million from investing activities, primarily from water entitlement sales.

• Positive net cash flow of $7.8 million from all activities for the quarter.

Outlook and guidance

• Dividend guidance reaffirmed for 2024, targeting an interim dividend of 3.7 cents per share, fully franked.

• Government to purchase 70 GL of water entitlements in July 2024 as part of a broader environmental water program, potentially impacting market dynamics.