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Mar 31, 2020
Gladstone Land Q1 2020 Earnings Report
Reported financial results for the first quarter ended March 31, 2020.
Key Takeaways
Gladstone Land Corporation reported a net income of $3.1 million for the quarter, a significant increase compared to the prior quarter's $958,000. AFFO also saw a substantial rise, reaching $5.4 million, with AFFO per common share increasing to $0.25. The company acquired two new farms and executed nine new lease agreements, expected to increase annual net operating income.
Acquired two new farms totaling 1,325 acres for $7.5 million with a 5.5% initial net capitalization rate.
Executed nine new lease agreements expected to increase annual net operating income by approximately $401,000, or 11.2%.
Secured $8.1 million of new, long-term borrowings at a fixed interest rate of 2.66% for the next 4 years.
AFFO increased by approximately $1.9 million, or 53.4%, from the prior quarter, with AFFO per common share increasing to approximately $0.25.
Forward Guidance
The company's team is actively seeking to acquire new farms and has had success with lease renewals, indicating strong demand and appreciation in value of the company's farms. Most tenants sell their products to grocery stores, which are benefiting from the shift in consumer purchases from restaurants. The difficulties between the U.S. and China seem to have very little impact on sales of fresh fruits and vegetables.
Positive Outlook
- Team has a nice list of new farms they are seeking to acquire in the near future.
- Team continues to have success with lease renewals.
- Increased net rental rates on lease renewals indicate the strong demand for, and continued appreciation in value of, the Company’s farms.
- Most tenants on the Company's farms sell their products to grocery stores.
- Difficulties between the U.S. and China seem to have very little impact on sales of fresh fruits and vegetables
Historical Earnings Impact
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Avg. Return Before/After Earnings
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