Farmland Partners Inc. Q1 FY2025 earnings call

Luca Fabbri welcomed everyone to the earnings call and turned it over to Christine Garrison who discussed forward-looking statements and risks. Paul Pittman addressed questions on tariffs, stagflation, potential transactions, court cases, California land values, NAV, and proxy vote results. Luca Fabbri spoke about the company's strategy of deploying capital selectively and evaluating dispositions. Susan Landi provided an overview of financial performance, capital structure, and updated guidance for 2025, including AFFO range and changes from prior guidance.

For the three months ended March 31, 2025, net income was $2.1 million, or $0.03 per share, available to common shareholders. AFFO was $2.3 million, or $0.05 per weighted average share. Fixed farm rent decreased due to dispositions in 2024. Solar, wind and recreation increased primarily due to proceeds from a solar lease arrangement with a tenant. Management fees and interest income increased primarily due to the increase in loan issuances under the FPI Loan Program. Direct operations was up relative to 2024 largely due to the increased price of walnuts, but partially offset by higher cost on water and maintenance of permanent planting.

The forecasted range of AFFO is $13.3 million to $15.9 million, or $0.28 to $0.34 per share, which is an increase of $0.03 and $0.04 on the low and high end of the range, respectively, from the last quarter. Changes in guidance include increases in solar, wind and recreation, management fees and interest income, and other items, offset by increases in G&A, gain loss on disposition of assets, and interest expense.

Risks include uncertainties in forward-looking statements, impact of tariffs on farmer profitability and portfolio value, effects of stagflation, outcomes of court cases, California land market conditions, and the proxy vote result where the compensation advisory vote did not pass due to ISS recommendation.

Q: Can you give a sense of the amount of amortization of FPI loan points in the first quarter and the schedule going forward?

A: Paul Pittman mentioned they shifted investment to loans for higher current yield, and Susan Landi stated they are expecting to recognize amortization of points income for the year, approximately $2.4 million.

Q: How are you thinking about buyback versus holding dry powder for land investments?

A: Christine Garrison said they see a significant discount in the stock compared to underlying value and are more focused on stock buybacks than land purchases currently.

Q: What's the difference in reaction to tariff headwinds between core row crop assets and permanent crop basis?

A: Christine Garrison explained that specialty crops have varying reactions; some may benefit temporarily from tariffs while others are less affected.

Q: About the Farmer Mac facility, will it be renewed?

A: Luca Fabbri and Christine Garrison stated they are likely to renew the Farmer Mac facility to maintain liquidity and flexibility in capital deployment.