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Sep 30, 2023
FRP Q3 2023 Earnings Report
Announced results for the third quarter ended September 30, 2023.
Key Takeaways
FRP Holdings reported a net income of $1,259,000 or $0.13 per share for the third quarter of 2023, compared to $480,000 or $0.05 per share in the same period last year. The increase was primarily driven by strong performance in the Asset Management and Mining Royalty Lands segments.
Net income for the third quarter of 2023 was $1,259,000, or $0.13 per share.
Asset Management segment revenue increased by 54.2% due to full occupancy and the addition of a new building.
Mining Royalty Lands segment revenue increased due to increases in revenue at nearly every active location.
Pro-rata net operating income in the Stabilized Joint Venture segment decreased by 24.6% due to the sale of a 20% interest in two properties.
FRP
FRP
FRP Revenue by Segment
Revenue by Segment
Mining Royalty Lands Segment Revenue
CapyFin.com Forward Guidance
FRP Holdings is shifting its development strategy away from new developments in DC due to inflation, interest rates, increased construction costs, and a softening in the DC market. They are focusing on less capital-intensive projects like warehouse construction. Construction is underway on a $30 million spec warehouse project at the Chelsea site in Aberdeen, MD, with shell completion anticipated in the third quarter of 2024.
Positive Outlook
- Royalty revenue increased 24.7% over the same period last year.
- Mining royalty revenue for the last twelve months is the highest revenue total over any twelve-month period.
- Occupancy and overall square-footage have increased in the Asset Management Segment.
- Construction is underway on a $30 million spec warehouse project at the Chelsea site in Aberdeen, MD.
- The company repurchased 36,909 shares at an average cost of $54.19 per share during the first nine months of 2023.
Challenges Ahead
- Pro-rata NOI is down for the Stabilized Joint Venture segment due to selling 20% of Dock 79 and The Maren.
- The DC market is softening due to an influx of new apartment projects.
- Inflation, interest rates, and increased construction costs are impacting development strategy.
- Negative trade-outs are occurring at Dock 79.
- Renewal rates and rent increases are lower than in the past.