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Sep 30, 2024
Gladstone Land Q3 2024 Earnings Report
Reported financial results, showing a decrease in net income compared to the prior-year quarter, and a decrease in AFFO.
Key Takeaways
Gladstone Land reported net income of $6,000 for the quarter, a significant decrease from the $3.1 million in the prior-year quarter. AFFO was approximately $4.5 million, or $0.13 per share, compared to $5.4 million, or $0.15 per share, in the prior-year quarter. The company faced challenges with certain vacant, direct-operated, and non-accrual properties, as well as changes in lease structures on permanent crop farms.
Net income decreased to $6,000 from $3.1 million year-over-year.
AFFO decreased to $4.5 million, or $0.13 per share, from $5.4 million, or $0.15 per share, year-over-year.
Executed 21 amended or new lease agreements during the quarter.
NAV per share decreased to $15.57 from $20.33 year-over-year.
Forward Guidance
The company anticipates challenges in the permanent crop farm market due to lower crop prices, higher input costs, and water uncertainty, but expects row crop farms to continue to perform well. They are taking a different approach to leases on some permanent crop farms, granting tenants cash allowances in exchange for a larger share of crop proceeds. They are actively working to resolve tenancy issues on certain farms and are in discussions to lease or sell properties.
Positive Outlook
- Annual row crop farms continue to perform well in terms of value appreciation and rent growth.
- The company is acquiring more water at below-market prices, providing additional water security.
- Nearly 100% of borrowings are at fixed rates, maintaining balance sheet strength.
- High levels of liquidity and overall access to capital are maintained.
- Declared monthly cash distributions of $0.0467 per share of common stock for each of October, November, and December.
Challenges Ahead
- Permanent crop farms in the west have been negatively impacted by lower crop prices, higher input costs, and water uncertainty.
- Six properties are either vacant or being direct-operated via agreements with third-party management groups.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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