FPI - Earnings call transcript Q3 2018

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Operator

Good day and welcome to the Farmland Partners Inc.

Third Quarter 2018 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions]. Please note, this event is being recorded. to Chief conference Executive like Pittman, to now and Chairman Officer. would turn over the Paul I Please go ahead, sir.

Paul Pittman

to format to appreciate call Thank and more you, and interactive third webcast. to conference public Partners, for this section filings Chief them as over these to XXXX opportunity the the you presentation welcome Luca me thinking the Relations for under calls. of morning formal link We for join and is We us Financial Luca? Rocco. and I Good our quarter is share website a it package. morning, very the turn XXXX portion and posted customary company’s you of at also presentations Relations and less farmlandpartners.com time taking section our see Farmland releases. link the the for Please for refer press with webcast now important strategy call Investor some in a will than Luca is supplemental Fabbri, website. QX of remarks. Officer. our preliminary earnings directly the With the below The Investor

Luca Fabbri

night. provided will the the evening. November our Thank was available yesterday earnings release in release this The phone A XXXX. yesterday be XX, the conclusion after call are you, earnings replay access announcing third shortly of replay distributed the of through Paul. press The quarter call distributed to numbers press

the the call. rebroadcast not X, made have listened initial this XXXX to remarks November to herein you updated those For today the subsequent earnings been we of who of prevention, remind as that and

comments related and dispositions our agricultural of portfolio, we outlook broader our under impact farm will rents our activities, as make identified business, for on acquisitions, statements to future the performance dispositions the call our financing well of During and properties markets. evaluation, as acquisitions, and forward-looking statements, this including

release third release Definitions adjusted in XXXX. are our report We adjusted these FFO, exhibit quarter to measures, most will measures are on are our risks expectations, measures, as which from available difficult well generally risk the X-K Pittman. November FFO, as company’s the subject to income, Paul statements filed our reconciliations I yesterday net and review including to EBITDAre. results risks EBITDAre included to in and X, to of materially our uncertainties financial also certain cautioned like www.farmlandpartners.com, back control. beyond uncertainties, many after announcing can the close these non-GAAP furnished and is current cause the is we operating GAAP Paul? discuss non-GAAP discussed listeners as comparable are now to and to predict and we These market press call that our actual press and of differ advise earnings, an documents factors our have dated Chairman and current to SEC. Listeners on furnished which and in Form website, to certain with turn or would the CEO,

Paul Pittman

Thank Luca. you,

price it would Starting this to and shareholder the continues a sales and operational demonstration through of okay we a – repurchase be was if company So stock asset of the this quarter in I to make powerful I issues. disappointing creation say summarize a can operational stock. and quarter, value is underlying with

leased leases about point, rent year half in season approximately our XX% XXXX. for average, one leases leases. farming all the have of third we increases rent are of this XXXX renewal we approximately of re-leased have anticipate be would automatic of second in in We and up XXXX. and start On today our the leases new of on are approximately bumps will early seeing of before also the X% at At these that our they open leases. these – have We late third or

So rental we estimate X%. base the on in be neighborhood of in balance, will XXXX revenues up that

participating it’s and to alternate crop give early a bearing since price meaningful crops on weather, predictions just major too impact revenues. revenues, participating For have such

I issue major a heat the or heat revenues quarter trade in slightly a first cases quarter impact fourth in in felt relates will to to of delayed hurricanes on Southern quarter the case may in the into of year. revenue be price second impact out a wars. or events Southeast, This recognition, want in will lower address the normally some received The two lower event and likely negative most that California operational the modestly probably revenues. These have – ongoing in fourth next yield push

know as on impacts As the immaterial value on from events uninsured far at asset we based this what values asset go, time. weather was the

Turning sales. to asset

sales the completed in previous have to the farm reasonably have gain million have broadly million. the quarter this third value. We been with $XX.X Adding sales quarter, of XX.X% These portfolio. over in asset about asset book distributed about $XX.X a to-date been year- the of sales

Some have Plains. approximately in some the the High we use leverage IRR an XX.X% on XX.X% rental and unlevered into the some and the a Corn in received basis. been the Delta of income we while was in levered basis account farms, Belt, and on Taking owned

pace. expect at We asset continue modest to sales a

share, share do you $XX This value considers our we gave as we portfolio in survey-based said the rate-based different today lead a properties farm approximately the of value of cap and not at an On NAV methodology, believe comment in leads to traditional be approximately we of that with you $XX.XX REIT for the per NAV value ways. share of methodology, fundamentally rate-based Today, we bit Despite overshoots $XX.XX asset if supplemental, at would up NAV company end calculation. have NAV basis, an share if that land per $X.XX is rapidly we $XX Now look USDA In would by cap an per in cap book net a per the the past, share. three of We that about believes valuation traditional a different the a value stock. value the each still the primary – that to methodology. per to represented at a when rate- look to the increasing to it Management, comparables-based valuation, based. the weight approximately methodologies, because gave $XX.XX. is those methodology of three share. you about is only

of shareholder back outstanding we a the We an have those X,XXX,XXX That will $XX X. bought share, of $X.X of have about Using buybacks, created, on X value. since July about represents X.X% shares NAV million shares. through July about

book return to funds buybacks made the even our sales, of source asset XX% from more these an shareholders the that Given is above is XX% significant. to value,

We as based the share long continue price on shares expect to repurchasing depressed. funds stays availability as

Fortunae, of or Fortune, a quick attack company. finally, the our comment on Now Rota Wheel regarding

optimistic achieve Fortunae, effort continues. statements and to and Our that pace With we a Rota some related manipulation justice would to will Fortune market XX our the at for goals comments. slower additional Luca Wheel to back achieve like. attack make recovery we cautiously our financial shareholders to albeit the We July over that, on that stock false our turn going to feel it I’m by of the for caused and damage on

Luca Fabbri

the was were you, the million, the operating increase highlights net the income quarter revenues Basic Paul. million, same the a $XX.X EBITDAre through some over period $X.XX. year-over-year, loss XX% I financial with to prior a operating million. regarding you million, was quarter $XX.X in AFFO increase to third of revenues and a increase The in the Year-to-date Thank year, walk X.X% XX% increase. stockholders share, X.X% quarter were at the income would $X.X a per million, quarter $XX.X in common year-to-date. now like in so with $X.XX the at $X.X Adjusted was year-over-year.

is addressed, third as the past wanted million to Farmland about we in we’ve – XXXX. somewhat FFO shares. the the the Paul a This $XX you of mentioned, closed. the for vast purchased current your in fourth and our of on somewhat for count question-and-answer asset shares quarter the now. there interest of at third concludes AFFO, Paul of was I the revenues like come already The this is million we the X.X repurchased in gain more year. time remind bulk million session shares, operating after repurchases our X.X totaling XX%. Paul still majority still of already, performance quarter about we my close in for seasonality remark addressed would had to share in window in importantly begin diluted before the Also about to addressed the your Thank and as Partners. morning Rocco, fully and right quarter quarter, also we expect revenues XX.X million [ph] excess quarter and As a in given of sales you, the

Operator

go [Operator Instructions] from James. Marnie Today’s ahead. of question first Raymond Georges comes Please

Marnie Georges

sold back Any much so ahead the disposition year? taking Hi, color looking anything Just Thanks start, else good just I’d my be it year have that to To like circle rates been to for you’ve the far to to asset question. you you’re cap Do contract the morning. dispositions potential through on goes as now? expecting. seeing? as and right under activity to end next

Paul Pittman

a in the some have that of fourth don’t anticipate actually don’t first will are and year asset company it. next is policy. a to something the break on. announce continue to would tradition our as the sort neighborhood I until I the of Yes, we we of is that that in we closed, And pace sales currently want though transaction at quarter quarter

Marnie Georges

second Great. a Thank And you. one me. then for

where trading rates floating versus given you balance what given looking the debt how been thinking doing? have exposure back buying to are your are sheet, interest kind shares rate about Turning stock of prioritizing to at

Paul Pittman

sale whenever are automatically, has leverage. farm some we the an every Yes, asset repaying amount virtually, of – we make own we debt because

something So on the debt of automatically in every just price to transaction. numbers, like reduction round goes sales XX%

buy stock is balance stock X% depending consideration or you buyback current see discount, the kind stock still of repayment you back we to trading deep back plus has off effective do a an the range, may capital, $X though, appreciate, price that accelerate a At price repurchases the at do that at which as and our to Beyond in incredibly common debt is we the stock think is most do we becomes debt? we dividend time probably in common of which of continues continue at a pay it. price today’s preferred you do preferred use range, that. what on the buying and/or do But the we’ll

Marnie Georges

Great. Thanks so over. I’ll it much. back turn

Operator

go Today’s from Don Please ahead. Instructions] [ph] of [Operator Private Investor. next Johnson question comes

Unidentified Analyst

you. Thank

[Technical efforts products tackle leases. chemicals to regards to ag and some rate your looking Just to XX% your cash increase rates comments On Today leases we’re operating prices cost to fertilizer the How but lower XX% higher operating increases environmental on feel environment, prices see also in your can an from you commodity Difficulty] on in and input the at of due to type interest growers wanted the maintain regards and you protection getting of higher loan not anywhere via X%? rates. for your do only

Paul Pittman

a how works. question significant relatively misunderstanding indicated so Yes, frankly of rental farm economy that the

So a ask. than things of let you couple go broader question even me through the

seeing what’s XX% So we’re of buyer and happening. sure am but but that’s scale. that increases tenants get are those other our not and they’re for I and XX% to would reality. not DowDuPont not inputs. just not That’s like Bayer to s There increases increases, in

chemicals zero the vacancy point a second is agriculture fertilizer. in of resource and is There scarcest is the land The not and that seed itself.

never call They’re happen. Dicamba. to be you Bayer They’re out You’re Never of of not have out and to seed. going be going going out Roundup. going tell not to they’re of them to up

to more about perspective, are there ones landholders with that food this on think like the resource. an no shouldn’t market So Because economic power anyone is scarcest meaning else we think relatively chain. when speaking, us than people reason, have, you in the that

not point up. rental now X% for several we’re row, X% of X% running is so line rental is The reasonably average the third of And baseline a The The to are row X% to in in the years disappointing. is these trend X%. zero. increase neighborhood increases crop long-term actually is farmland

long-term getting when are perspective. we a only from And you’re model so would’ve increase predictive sort lower than a what actually hitting at X%, we an expected, of,

about. So we to X% happy excited positive nothing it’s incredibly while I’m is be are

up. marketplace. of So the in just the I increases hope that kind we’re clears that seeing rental That’s

Unidentified Analyst

Thank you.

Operator

And follow-up, we from James. a Marnie ahead. Please Georges have ladies as and go gentlemen, Raymond

Marnie Georges

couple bought you that that a were of circle with Belt? acquisition in Corn jump you me letting for Thanks The completed Wanting back to more. the in guys have color the during acres on quarter. the any that? to couple Do

Paul Pittman

opportunity of an opportunity compelling already with significant thought, was other presented add-on properties were we we neighborhood owned at, to a Even the did. make something one at – value. through do to we’re some a acquire in of attractive, had we and what we assets, Yes, we speaking selling what going we in tenants we a acquisition our ahead the of very an is if broadly price to have context it, that’s believe very a and go

So a Midwest. price by that to of high-quality good it’s brought in crop our good, us farm the a one at row tenants was

Marnie Georges

Thank Great. think much. acquisition relationship-based mainly more you you’ll so you do those forward, Do moving opportunities? of

Paul Pittman

the a be local acquisitions at do. I only be tends or Because to brings farmer, will agriculture, Because in we deep the be before sort meaning are the other point, your get this to opportunity of they we to by only only mean before would an sense up you before brings deals always they acquisitions certainly, get frankly suggest, as you value – common that’s institutional best plugged likely tenant, taken to us, investors. and the idea to locals deal. a very when for as most as –

Marnie Georges

Totally fair.

guess of think that is you should ongoing ideas registered in XQ more you about legal the costs litigation how at lawsuit, still – have given in ongoing? XQ looking back we into what of any Turning do versus kind guys the on I

Paul Pittman

to don’t Well a P&L of reporting, That’s have we terms there we – use any we that the those we ahead coverage conservatism, insurance want sort sense the the for recovery. determine such legal not of insurance of today all But of we’ll that believe those took did of is against and financial out until litigation of not will costs. we time say expenses recover. in as absolute

of recovery. add I there’s reasonably to think view Luca, of you in that? the want to a detailed our discussion anything MD&A

Luca Fabbri

week, when you we a this see the this. around will file Yes, specifically, Q later discussion

Of have course, of certain we expectations recovery. insurance

that are above of the We level costs we incurred a litigations and expect in these retention that all beyond really recoverable $XXX,XXX.

much So point. the be in we had but quarter, expect lower net-net hard the in at predict than to to – this the we fourth costs QX legal in

Marnie Georges

Great. much. Thanks it. so Appreciate

Paul Pittman

you. Thank

Operator

team showing management Instructions] for [Operator no Back to questions. final further over I’m the any remarks.

Paul Pittman

interest in now. quarters. look to Thank you. discussions coming We you the and goodbye your the these much, and company, appreciate continuing Thank in forward very

Operator

Thank Today’s has conference concluded. sir. you, now

attending for all thank presentation. me Let today’s

wonderful disconnect and may now lines day. You your a have

Farmland Partners (FPI) 6 Nov 182018 Q3 Earnings call transcript