FPI - Earnings call 3 2023 | Farmland Partners Inc.

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Operator

Hello and welcome to Farmland Partners Inc. Q3 2023 Earnings Call. [Operator Instructions]I will now turn the conference over to Mr. Luca Fabbri, President and CEO. Please go ahead.

Luca Fabbri

Sarah. you, Thank and conference everybody, Farmland third Partners' Good and welcome webcast. earnings call quarter morning, to Thank preliminary much strategy to the with interactive really you Garrison, a you get to Christine less our than our remarks. opportunity so bit some will press for thinking General for public giving started, filings Counsel, and releases.Before and I call our formal in and format the a customary more us we share over turn Christine?

Christine Garrison

you to release Investor thank has on the quarter Thank was under press and you to market Relations package everyone call. The our website The the announcing earnings the Luca, of been posted supplemental third subheader our section Presentations. closed Events distributed after yesterday. and

these listen remind this the the will presentation, XXXX, herein rents non-GAAP of non-GAAP and the to will operating business acquisitions as of our These and press our exhibit dated are to which website, statements, and remarks financing is made subject of beyond certain current on to company's cause business, portfolio; as and comparable and discussed call is agricultural generally measures, results XXXX.Listeners these FFO, this to from EBITDAre. that opportunities; release furnished of measures risks as to most subsequent broader future income, documents to our on statements X-K, including you would third performance call.During financial Paul? the GAAP dispositions; well EBITDAre certain measures, announcing dispositions included predict statements to adjusted which Chairman, our call, and control. an many quarter can our updated including to farmlandpartners.com., XX, for also cautioned as our factors be the identified of expectations, Form to difficult available FFO, our development who uncertainties, advise potential discuss comments our distributed markets.We are outlook report are as actual to are uncertainties as adjusted Definitions acquisitions, of October October and on in and earnings, our we with have we well to yesterday furnished Paul are in activities; materially or in our release and net current risks turn like reconciliations and and now risk listeners impact to recording this the will we SEC.I For we Executive today, XX, press the Pittman. filed forward-looking the differ that those make related review not the and

Paul Pittman

Christine. Thank you,

to So, value. to compared I'll my comments high-level fundamental perspective discounted most is to make important that be a continues from very back it deeply I before point turn my The stock colleagues. general our intrinsic few its

like not date continue gains important it's buy access that the as proof the I'm exists. down recognize funds belief, using my assets stock stock are Sort I our selling may million will back to of we pay the those quarter. value.We in $X that long and grow of selling discount or share that And assets the at strong, noticed, most. have a worth ultimately and of position we you gains to during good believer sold a significant been not as my never debt to firm bought because but continue as company to will I very the but and have we

Florida. farm was the X And have it terms as what in last been decade XX laggards the you've we rid probably because is an farm almost got in compared so, sale of we had. citrus a but had is relatively volumes financials, is reduction may Grassy But or the farm threw seen of in of in XX% We in industry, It's and in assets That of know, Island towel are rest only that fundamentally that modest-sized Florida appreciation Groves. you to the for. on as will our is we is, the many a our at we added discount in in swim Florida. against. may or portfolio. years books That in citrus that the not you transaction, actually opinion, selling tide that a of There couldn't substantial note recover. It's that to a we the a citrus just

It's overall portfolio. move strong.What returns are very despite control, on we recognize have of let that next do just the on loss obviously on. to the we size that go so, that asset on farm still very, some that focus cost the need to And is sales made we shrunk as important the and farm, we've

to strategy that, is that turn next shareholders going the our to strategy.With turn for it significant as we continue this I'm to the with CEO. on But year. this stick will who to creating We over our fundamentally us, in we Fabbri, year of to beginning decide execute get as value later and Luca

Luca Fabbri

we our about first Paul. properties to for draw Paul has your as the of strategy and we so expect we've $XX an contract of past conference Thank advanced quarters like or value. gain After attention kind negotiations quarter, have over by X year, have to would the in to how the of in the have year. outline in and In that an net $XXX data we about sold points I outlined we far, calls. executed proceeds on third the book of have closed total a you, few end discussed of of on close approximately as under sales. million million XX sales we close hope to XX% the $X.X additional asset million, approximately asset And

-- there especially advanced degree in about there course, the that. still ones some Of is on negotiations, uncertainties of is

we the X.X about at about million for $XX.XX. at after including year asset $XXX have million.So sales the repurchased year, this shares price projecting total of an So we far are average quarter, slightly

about stock those We've also million repurchases. of we paid $XXX of used in of million A about so $X down common Series So, million preferred. far, proceeds, $XX

the We completely out are of the market side. on asset now purchases

completed We We transactions. million purchased assets. a $XX about few of have

So, progressing. focused but not just least, selling I cycle on portfolio, your our and we improving want assets.Last are really the are draw not renewal lease on how attention we to

CFO, cycle to the XX% little call James? XX% financial So are far, way, bit we and company's about lease over that.I finish the more to now our the his the overview of James to hopefully up we performance. even are about will and than and X/X of turn year renewal the expecting for a Gilligan,

James Gilligan

of my structure Thank you, to year-to-date X and in referring to of months items few package I'll rates, and comparison of Luca. XXXX, guidance cover interest capital and be I'm supplemental X XX, going updated for year. the a summary today, remarks. September revenue a review the ended including

As the I'll a available financial a is metrics reminder, that the appear the few X. Investor supplemental Events Page of and on section Relations Presentations.First, in under our share subheader website

and negative to and elevated under per relative expense, and year.For direct down lower interest performance income increased XXX% available common X average last negative review third and of again, share and million again, the largely net X largely on For share was year.Next, was auction largely share due revenue shown was stockholders of per increased higher weighted the of to per some was share, to the months to a income auction lower brokerage per quarter. in we'll $X.X operating farms direct and common interest and was to under over the lower net weighted other dispositions to 'XX, available on to income was AFFO lower XXX% to farms $X.XX, due due of depreciable gains little $XXX,XXX Depreciation, largely gains AFFO was approximately and performance in made items more on down share to assets to assets. operations quarter income XX, adjustments over expenses brokerage to September to X. service average to ended negative placed $X.XX to the down due $X.X AFFO stockholders into per elevated due to revenue and last to in ended to amortization $XX.X assets. about 'XX, and AFFO expense, of down $X.XX, depletion Page $XX,XXX and 'XX dispositions million million in September net relative up $X.XX, months up operations net

appears That operating reimbursed 'XX, tax caused in tenant As a adjustments little the of the first by approximately had onetime placed to and but were quarter a approximately including of service.Property expenses higher into in flat third related quarter. revenue. by the was property a year-to-date tenant we taxes, property reimbursement in higher amount reminder, quarter assets $XXX,XXX last $XXX,XXX

a make we September increased debt year-to-date was $XXX.X and period I'll added of $XXX,XXX million in farm.General million, and second the the sale. In were expense approximately nonrecurring quarter final by expenses a loss was We book Page California count the to due expense diluted close the adjustments QX 'XX what MetLife on the Total in benefit XX.X the #XX, dispositions our XXXX. QX. sale lines relative relates on cost of ] Paul due addition, million of that's net quarter that the made to capital of reset EBITDAre.Gain represents in on last XX, $XXX is is at as as at caused from appreciation value. we capacity purposes in contract were reconciliation was year a 'XX a that due was was the credit higher of incurred page, sharing to higher couple compared This over MetLife of Interest will little property values XXXX, generally of skip XXXX Fully the approximately this on of tax in a ago. by FFO litigation This year-to-date QX of These the were expenses impairment were recognition held of 'XX of primarily is expense lower back and to a to last the demonstrating shares.Moving agreed year years. X increased early third which ahead few [ quarter in undrawn calculating had structure. sales and in lower October compensation to for the accounting under quarter. approximately of X.XX% to properties million reset farmland within XX to share about to for due X/XX to rate end Income Impairment of expense travel. the down mentioned lower in $XX disposition, the are and at stock-based This lower and for 'XX, assets 'XX, down of to spend. to Legal that which, for the quarter. of but prior estimates.Next, rates. 'XX comments end minutes up an of comp due third XX way, for lower administrative

can As prepay a year XX% of reminder, in that we penalty. any loan without calendar

acquired the by blocks at the have our renewed fixed to highlight please feel periods, A building income Next XX page and MetLife totaling farm goods to periods. dispositions between free X approximately XXXX contact between through me XX $XX statement we last of generate offset XXXX we any current was comments the if rent of blocks increased the and resets provides describe for of quarters won't year, have you the it cost these That that shows in to on of the differences revenue million.Page overview leases. as go sold. are: first building year. rate but an year points I with and questions.Page the in few X properties debt and the detail, bottom

a quarter, state That Solar, last project little primarily construction caused of QX by had wind the of third and Illinois changes recreation were of construction in in a began XXXX, that that phase by bump the caused its large quarter process. solar commencement the year.

in decreased the in third XXXX the quarters small and caused bump to first the second from absence the due variance same XXXX financing quarter XXXX in in onetime buildings dispositions. brand. by The quarter XXXX. X land agricultural QX treatment reimbursements to the that construction increased of dealerships last In with quarter to fourth and those for QX construction-related as property under that we reimbursement. property QX property Ohio Deere and acquisitions in relative and acquired year.Tenant equipment this of the quarters that tax The changes was assessment classifies John accounting tenant related of year of year, last transactions. dispositions benefited due

of goods for and the was second in the to categories, updated the row payments were income other the using XXXX balance interest and the previous due summary, farms last down compared sold. year-over-year up to and of citrus next citrus the High brokerage was due items XX, This down variable first QX to in the and items decreased sales, page, income. outlook and payments, operations and last tree the on to while in So, that largely year-over-year.On interest for of in items compared they It sheet crops, in year.So increase appear and Page quarters nuts. as largely this year-over-year, walnuts. the due on payments fixed comprise activity Other the crop due cost down 'XX up the combination statement building in loans were we on pages. the year.Variable lower accounts the other, as grapes, crop Direct year described blocks insurance is to auction that row comprise direct crop were operations variable payments XXXX Plains. have income to same

out Assumptions contemplates the listed dispose approximately of for Luca are of on farms total as $XXX in bottom. year, described. that the million we This

estimate, is will rent revenue this signed. may and with change dispositions fixed reminder, number and new a differ.On an farm results the As side, actual leases

higher million $XXX Weighted 'XX. thus the average year. of share XX, to expense offset and accounting lower be variable at cost reimbursements, nut goods results on in and 'XX. plus updated of also improved with approximately decreases buybacks share, $X.X of increase lower year-end.On interest tenant mind Other spend Interest XXXX, far. and in due had or full-year so wanted have recreation, expense Please rent. year-to-date farms last cost Page these to to from up year-to-date with with impact have decreased $X.X from quarter. that's as dispositions crop This we provide information provided direct significantly income, operations. again is year-to-date last some payments sales, and will have currently wind $X.XX the to rent range, Direct the walnut decreased where additional positive of values consider changes farms all we visibility. goods changed we visibility projections decreases of asking the the general and renewals. insurance, as small next fees in items lease quarter.Down we shares due Legal $X We've crop bottom farm with we're Solar, sold pay about expected AFFO under we of have differ.Fixed to information 'XX. considering, shown per approach provide than keep results million various $X.XX actual farm changes lower above may million rates by management sold, tree that Variable for less the people an million side, sales, course, regarding lower operations, guidance due and outlook administrative expenses spend and small to

above. lower what tax given This [ we helps tenant year and reimbursements renewals Solar, approximately approximately will all morning. Q&A fixed for this now not recreation above. rent the shown due year session. this dispositions, wraps up Operator, describe be where don't can that that reimbursement trade for asset first than onetime this today.This you guidance Hopefully, we stand, also lease also quarter lower in comments to higher reimbursements. shown will the begin we participating. my at for be you of $XXX,XXX certain Thank ] know only guidance anticipate Tenant and next in occurring with line wind but the is

Operator

first Stevenson with the Rob comes Your of line Instructions] from [Operators Janney. question

Robert Stevenson

this and special point point at dividend -- this potential for of Any need size the on one? clarity on

Paul Pittman

is is take obviously The because contract unknown of I Board -- will hasn't Yes. to are sort last many by It not exact but that that declared I happen. end under Paul. point closed. you've is dividend. quarter, This will size transactions got but that think signaled believe, up, and likely our it's still so at this question. I'll we This This -- yet, special some we with been

things at there's history our Now, actually close, point. this contract under most is, but assurance no go do that

probably and exact known number think be I is the put So into public it'll out before domain. the into December

Robert Stevenson

the line to that, just able I finance other and reasonable all is to purchase follow to Can you ] talk Paul, or that, that's timely you the the at able at of close on that up financing whether fact out in from is rates financing a cognizant purchase side up sort be on about manner, held the to And parties that selling we're with and environment to for if what all? Okay. office assets there not of difficult. buy buildings being think [ up of lining up and you're now farmers the right go be to whatever today, interested or

Paul Pittman

don't a This a those not because food farm economy strong, still personal Yes. estate it's one. frustration everything by question these that based the was we've farms buyer, about. one incredibly under is talking only couple agriculture it's ownership not year, But farmer all cash-dominated effect real for is last of office Number following X frustration in something buy. a the cores just it's all is the institutional the contract our had close not Most It's my they REIT put final money reasons. like go solid, to the got This a other culture and market. purchasers for assets so not the is like largely levels is -- number the an on that buyers in a transaction you're It any farmland buildings. financing, didn't and farmer-dominated for we us. And reasons economy, really we're We're It's an finance on overall The two, agriculture. in is of of of years. point and this these XX%. get good not Of The their transactions. culture. they pocket who lot are investors debt institutional dominated of the have they close. driven

worried it. continue can make so know are these no, doesn't else Market people stock buy to because prove we than inflation. am are impacting undervalued. do values least big sales appreciating close. to the to But they're rapidly asset of market seriously really I ability don't to that get confident what the a at highly not I so financing do Our we're tied and to seriously, I about

James Gilligan

Rob, just that to together. is our In sector, add are sellers that, important Paul distinction it's an getting buyers drawing. and

they lending tenants extent doing for their of and ag really dedicated and absolutely on needs. an taking Our business, advantage are are credit of working the Banks sector. of to farmers capital are to lines support important lenders. draw well seasonal the part That's open

sort market as you different class, So than outlook find of you referred it's in very a a asset to. different might

Paul Pittman

high. rates money. plenty people somebody Yes, are of property, financing extent for that But offering there's an needs to the ag

James Gilligan

And available financing to much elevated at than all. at cost rates no an available better have interest

Robert Stevenson

Okay.

how with dispositions, proceeds? paying the you down are in viewing between the now guys the stock of Speaking is sweet trade-off where repurchasing of and the terms debt right spot

Paul Pittman

frankly, do sweet stock outlook depends both. likely we're price The continue interest to the spot, on rate and time. Well, at to exact

than stock to I lot more most we've recent been running reduction -- we debt a we more quarter, to buybacks. think money did put like this

a quarter, had to XX/XX be split, that. like something guess it'd to the you fourth If for ask me

Robert Stevenson

to 'XX some on And also XX% and XXXX? fact determined the of that lines wanting max these first being how by January of done -- have of payment a week something calendar much get versus in that the that the doing is of

Paul Pittman

James Not impact, let a although big that. add to I'll

James Gilligan

today. lot find want would so we make higher our a off can paying floaters in with which additional we position There's then a are generally we're Rob, pay cash, much first, Yes, without pay ourselves And should rate any we to penalties. downs. that

lines, XX%. year is a MetLife pay lowest highest amount the our and can in the on -- we is have XX% about We

with So lot we that a we choose lot find cash. ourselves us down, gives can of should that quite pay a to

Paul Pittman

could that's at be paid anything fully And penalty. date off without interest an reset

have substantial ourselves So we sales. asset balance flexibility, from sheet huge find suddenly we should with cash

Robert Stevenson

in Okay. and up And on James, while I crop missed was relation about prior. the insurance have went why comment the you, that What the $XXX,XXX from to? guidance your I

James Gilligan

Yes.

to and -- a So some of between of of are the different mix off sort we have that better through crop into and just products, and trees are visibility looks. generally or harvest, as as come that what's is kind insurance as how in we sales we crop visibility

we've And updated accordingly. so just guidance our

Robert Stevenson

non-renewals one the that last you're this then, XX% of left there for Luca, And any are me. renew in the at known leases Okay. point? to

Luca Fabbri

Occasionally, with the as happens negative some the if industry farms the this work no improve We new Not tend, what expecting in of all. of at any end tenants cycling renewals. stable quality our getting with our always, tenant we not of choose ones, end current but to We're of expectations at tenants to along not kind all. lines and That's no kind really. not year. certainly off to those leased by of up pool by

Robert Stevenson

said that XX% expect to that going And is range? sort XX% Okay. that be to up you you XX% XX% to in similarly of the that

Luca Fabbri

yes. Roughly,

Operator

the James. We -- line of have of Raymond a question Tousley my Instructions] no oh, [Operator from There apologies. Hyde do are

Tousley Hyde

you I environment any of energy the business. such your kind pullback speak sentiment wondering seen project? With rising was just from they at or can in the if cut and current you costs, renewable surrounding rates looking have of demand to companies areas side a could

Paul Pittman

its X, the probably the auction on understand, is energy that an every you Early fingertips. of years about become means policies do No. high The the acres paying at and sort properties aggressive, got is to percentage a looked be up kind property. because have of I across It's have gradually have they that into to state-by-state really in solar and X-year just set we mud statistic you stand as at But amount this there of don't from ag see demand. really accelerating. at immense property endless own each has basis projects for it's exact probably grown still, potential. auctioned my that. a to states study demand X-year state of But renewable the they're has Auctioned acres, The process, if the wall X of to kind throwing this permanent feasible. with people of were auctioning end and a basically ago, through time. while against point country wind

are the of they Now, a put fees, bit before which are the auction auction. because diligence of year, size $XX, per they it the often of quite solar -- $XX, actually $XX doing acre an are even due developers under

So we're any not seeing really there. pullback

As policies that. demand economics. it's change, for those long more there'll think quite still very bit you as And government of by be as I policy know, a than don't driven

Operator

question Your B. of John Massocca the comes from Riley. next line with

John Massocca

the disposition on question quick front. A

terms if of crops Sorry the split capital of were recycled in between permanent but that remarks, prepared this missed assets out I crops in kind and the what of row was of? kind rough

Paul Pittman

that's terms? relevant, dollar not do acres. in Luca, you know, Because what's

Luca Fabbri

Yes. I some permanent still. of quickly of is pull would we did minority say it's sell and although James some crops, we kind under have contract numbers trying together. some to a relative

James Gilligan

Yes.

sold. year-to-date. permanent it's crops crops row of that mostly the Probably we on what $XX of sold order said, Luca we million As is

crop row has majority been side portfolio. the the the of in So vast

Paul Pittman

of specialty crops. reflective that's crop roughly portfolio, it We're and in what of just to context, put portfolio, XX% about we've the to sold XX% specialty Yes, that's largely overall a right?

John Massocca

a in disposition and are kind or acquisitions going maybe back down stock. you're I versus into kind buying recently? Okay. closed terms of or seeing there proceeds of yield on have the most dispositions market of is meaningful difference debt difference you But a significant know in the And of acquisition what the paying

James Gilligan

Yes, I one. can take that

the So closes, approximately year, sort in yield. at selling if that's X% think being a about looking the looking sort our it. X.X%. generally X%, think we've we're find we're what where we're depends to that's of got or at we we're today, selective, higher given sell that. can plan acquisitions, but today, looking what And we're very we're at -- of trading stuff when kind new We're And portfolio Again, higher at we're we on north where it targeting and NOI at of everything we of again, region. selling yield this

Paul Pittman

to I Yes, the return every the important, almost farmland investing about to amplify quarter, we of and talk want appreciation it's though, the side. incredibly point, X/X is because this total

that, any degree. the through anywhere our so higher half materially haven't of portfolio like are to or so, what is are a farms appreciation location investment. not of for in is And the major last selling United Appreciation the or States. upside largest are are sales the something that where decade investments That selling on yet farmland than we're we've rates almost in value and the is we're largely That think variety huge laggards Illinois made. we're the places forward. Illinois and going there reasons. And least there we at is making

we're where total comes it's total current It's secondary consideration. So from, highly that recognize value and is yield the return important a on. focused to the class to really asset creation

John Massocca

kind any seeing mentioned portfolio, maybe Florida. color entirely you're of permanent kind you're of places side? distress Just kind of any Any other on where out or be And of of worse, Okay. last gotten there the then, would in-place citrus that terms the in crop kind helpful. of Has largely out gotten one, better? of one that in Understood. you the business

Paul Pittman

to have reasonably I California. greening, been so suffer well different holdings crops, essentially over X citrus exist -- from that complete of other specialty Florida. those and on substantial and citrus of We to ] out time. doesn't huge performed going in talked have -- today reduction in in Florida is driver due California, we're called It's a What's so still in [ specialty citrus, Yes. citrus It's first, there crops question a disease exists which problems. the your Florida of about. many of But

to exposure exposure water actual the of water to more in particular, risk the the water, is exposure California. political First to of surrounding frankly, availability risk, in but California significantly, in and that's state

several from and But a there's wild the business. Colorado, tree closer struggling, way states. grocery the in of berry at a said them which of blueberry asset before times, so And up portfolio is you more of strain to don't but In that on that's in is nuts, a sold we're a plump, -- own walnuts that big to flavorful. risk. in blueberry the reason in particular hurt of demand and is as Southeastern in frankly is have big, assets that we've for Michigan in easy-to-market the significant them the that as taste ones store my really are the a -- a store. blueberry business grocery away the and for uniform The significant some good get that's berry, the you we're in berries. and in reason.So They're of crops buy of some water Michigan lot Eastern the opinion, taking they're Pacific buys much that example, been under We blueberry, has Northwest specialty Michigan this person planting look massive anything our We the goes difficult United Michigan a not a it's size, amount amount lot that So that of in in lightning blueberries pressure. juncture. been kind for

are those small relatively luckily of the have They're So places portions challenges. some we portfolio.

Operator

remarks. this will for at time. Fabbri back call closing questions to Luca further I no the turn are There

Luca Fabbri

and coming for you in forward updating all your this results and our us interest on We joining look quarters. to you activities the morning. company our appreciate in Thank

Operator

This thank concludes call. joining. today's you for conference We

now disconnect your lines. You may

Farmland Partners (FPI) 26 Oct 232023 Q3 Earnings call transcript