RFF maintained its full-year distribution steerage of 12.2¢, which features a 0.47¢ a unit franking credit score. Any shortfall between earnings and distributions can be paid out of capital earnings or money reserves.
RFF lifted adjusted funds from operations by 9 per cent to $44.2 million over the 12 months to June, though, on a per-unit foundation, AFFO fell 2 per cent to 11.7¢ due to improvement belongings not but producing rental revenue.
Statutory revenue surged 70 per cent to $210 million because it booked $105 million of valuation features on its cattle belongings leased to the likes of AACo and Brazilian meat large JBS.
With costs for smaller macadamia nuts and nut fragments used as components in varied merchandise fallen about 55 per cent and entire nut kernels down about 10 per cent due to COVID-induced oversupply, Mr Bryant tipped a “interval of ache” that might final a few years.
This could have an effect on the profitability of the small variety of mature macadamia orchards that Rural Funds owns, though they may nonetheless stay worthwhile.
Nevertheless, Mr Bryant mentioned the autumn in pricing was “largely irrelevant” and even constructive for the a lot bigger improvement part of RFF’s macadamia investments as these newly planted bushes would come into manufacturing “when costs are again on the rise once more”.
Macadamia belongings accounted for simply 7 per cent of RFF’s revenue within the 2021-22 monetary yr, however will account for an rising proportion of earnings over the subsequent few years as newly planted orchards are leased up.
As a part of its outcomes replace, RFF’s supervisor, Rural Funds Administration, mentioned it was in unique leasing negotiations over new macadamia plantings at its Riverton and Rookwood farms. It expects to have planted 1000ha of orchards by November.
Trying on the cattle and almond sectors, which generate virtually 80 per cent of its income, Mr Bryant mentioned rising rates of interest would most likely dampen any additional enhance in values.
“There’s been a big run-up in cattle land values, however that can plateau now. Will probably be the identical for almonds,” he mentioned.
Mr Bryant mentioned he anticipated the drought in California, a area that generates 80 per cent of the world’s almonds, to place upward strain on costs over time.
“For the time being that’s not occurring because of COVID,” he mentioned.
On the potential for a 3rd summer season of La Niña, Mr Bryant mentioned this may be “superb for farming business usually talking”, however would haven’t any actual impression on RFF’s earnings given its place as landlord.
“There’s more cash in mud than mud,” Mr Bryant mentioned.