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Dec 31, 2021
Gladstone Land Q4 2021 Earnings Report
Reported financial results, showing an increase in net income and AFFO compared to the prior quarter, driven by higher lease revenues and participation rents.
Key Takeaways
Gladstone Land reported a net income of $2.0 million for the quarter, with a net loss to common stockholders of $1.4 million, or $0.04 per share. AFFO increased to $6.7 million, or $0.20 per share, driven by higher lease revenues, particularly from participation rents. The company's NAV per share increased by $0.51 to $14.31.
Net income for the quarter was approximately $2.0 million, compared to $1.5 million in the prior quarter.
AFFO was approximately $6.7 million, an increase of approximately $1.5 million, or 28.4%, over the prior quarter.
Total cash lease revenues increased by approximately $2.8 million, or 14.5%, primarily driven by participation rents.
Estimated NAV per share increased by $0.51 from the prior quarter to $14.31.
Gladstone Land
Gladstone Land
Forward Guidance
The company anticipates another successful year in 2022, with a focus on replenishing the backlog of potential farm acquisitions.
Positive Outlook
- Actively working to replenish backlog of potential farm acquisitions.
- Increase the distribution run rate by 0.22%, declaring monthly cash distributions of $0.0453 per share of common stock for each of January, February, and March 2022.
- Recorded $5.2 million in participation rents during the year, which was more than twice the amount recorded in each of the prior two years.
- Secured new long-term borrowings from two different lenders resulting in total proceeds of approximately $3.4 million.
- Increased the size of our credit facility with Metropolitan Life Insurance Company Through the addition of a new $100.0 million long-term note payable.
Challenges Ahead
- Executed five new lease agreements on certain of our farms in three different states that are expected to result in an aggregate decrease in annual net operating income of approximately $659,000 from that of the prior leases.
- California remains under drought conditions.
- The majority of this decrease is due to one lease renewal in which we agreed to pay a fixed amount to cover the majority of the farm's operating expenses in exchange for adding a significant participation rent component to the lease, the result of which will not be known until later in 2022.
- Excluding this lease renewal, the other lease renewals executed subsequent to December 31, 2021, are expected to result in an aggregate decrease in annual net operating income of approximately $25,000, or 2.8%, from that of the prior leases.
- Despite record-breaking storms that came toward the end of 2021, California remains under drought conditions.