Q1 2024 Earnings Summary
Reported on May 8, 2024 (After Market Close)
Pre-Earnings Price$13.22Last close (May 8, 2024)
Post-Earnings Price$13.20Open (May 9, 2024)
Price Change
$-0.02(-0.15%)
- The company's water banking projects in California have resulted in the acquisition of 2,676 acre-feet of water credits at a cost of $129 per acre-foot, significantly below market rates. This enhances their farms' long-term sustainable water supplies and could increase farm values.
- The sale of a large farm in Florida led to a $10 million gain, with the sale price being $2 million above its previous appraisal, indicating strong demand and appreciation for their farmland assets.
- Despite challenges, the company expects no additional vacancies from the five leases expiring over the next six months, which represent about 9% of annualized revenues, demonstrating stability in their leasing operations.
- Tenant issues and farm vacancies are impacting revenue. The company has properties encompassing 11 farms under management agreements, which are expected to generate minimal revenue in the next couple of quarters. This includes nut farms in California and blueberry farms in Michigan that are being considered for sale due to tenant problems. , ,
- Decreased demand for almonds and pistachios is reducing rental income from nut farms. Expiring leases on nut farms, representing more than half of 9% of annualized revenues, are likely to result in decreased base rents. The company has reduced fixed base rent on a nut farm in California, affecting income. Additionally, almond and pistachio prices are low due to reduced demand, which may take years to recover. , ,
- Earnings are impacted by decreased net operating income and tenant defaults. The company experienced a $750,000 decrease in net operating income in Q1 due to tenant issues, mainly from nut farms. Participation rents decreased by about $200,000, and some tenants are on nonaccrual status or paying on a cash basis, delaying revenue recognition. , ,
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