Loading...
•
Dec 31, 2024
Gladstone Land Q4 2024 Earnings Report
Gladstone Land reported a decrease in net income and AFFO for the fourth quarter of 2024, primarily due to lower fixed base cash rents and changes in lease structures, partially offset by increased participation rents.
Key Takeaways
Gladstone Land Corporation reported a net income of $539,000 for the fourth quarter of 2024, a significant decrease from $1.8 million in the prior-year quarter. The company's AFFO also decreased to $3.4 million from $5.4 million in the prior-year quarter. This decline was mainly attributed to lower fixed base cash rents due to new lease agreements and the sale of a large farm, though partially mitigated by higher participation rents.
Net income for Q4 2024 was $539,000, a 70.4% decrease from Q4 2023.
AFFO for Q4 2024 was $3.362 million, a 37.8% decrease from Q4 2023.
Total operating revenues decreased by 13.7% to $21.096 million in Q4 2024.
The company sold 12 farms totaling 4,395 acres for gross proceeds of approximately $70.6 million, resulting in a net gain of $10.0 million.
Gladstone Land
Gladstone Land
Gladstone Land Revenue by Segment
Revenue by Segment
Fixed Base Cash Rents Revenue
CapyFin.comParticipation Rents Revenue
CapyFin.com Forward Guidance
Gladstone Land is actively managing its portfolio to optimize returns, focusing on adjusting lease structures for permanent crop farms and exploring sales for underperforming assets. The company aims to resolve remaining vacant or non-accrual properties by year-end and continues to acquire water assets to enhance security.
Positive Outlook
- Annual row crop farms continue to perform well in terms of value appreciation and rent growth.
- New lease agreements on permanent crop farms are expected to significantly increase participation rent components in the second half of 2025.
- The company continues to acquire water assets at below-market prices, enhancing water security for farms and growers.
- Balance sheet remains strong with nearly 100% of borrowings at fixed rates.
- High levels of liquidity and overall access to capital are maintained.
Challenges Ahead
- Market for many permanent crop farms in the west has been negatively impacted by lower crop prices, higher input costs, and water uncertainty.
- Some permanent crop farms may be sold if satisfactory rental rates cannot be achieved.
- Nine properties (12 of 150 farms) are currently vacant, direct-operated, or on non-accrual status.
- Lease agreements on two permanent crop farms in California are expected to result in an aggregate decrease in annual net operating income of approximately $184,000 from prior leases.
- The company will no longer voluntarily publish quarterly NAV per common share due to costs and resources.