Farmland Partners(US:FPI)2019-05-09 21:53Financial Data and Key Metrics Changes - For Q1 2019, total operating revenues were reported at $10.9 million, a decrease of 2.8% compared to Q1 2018 [11] - Operating income decreased by 6.2% to $4.5 million over the same period [11] - The company reported a basic net loss of approximately $0.10 per share and an AFFO per share of negative $0.03 [11] Business Line Data and Key Metrics Changes - The company completed farm dispositions totaling approximately $4.7 million during the first quarter [11] - Stock buybacks included the purchase of 1.2 million shares of common stock at a weighted average price of $5.61 per share [11] - Subsequent to the quarter end, an additional 0.5 million shares were repurchased at a weighted average price of $6.58, bringing total stock repurchases year-to-date to about $10 million [12] Market Data and Key Metrics Changes - The company continues to sell farms at a profit of approximately 10% to 11% above purchase price [8] - The NAV of the portfolio on a per share basis is still $12 or better, rising due to asset sales and stock buybacks [8] Company Strategy and Development Direction - The company aims to continue selling farms where good returns can be achieved while lightening exposure in certain regions [16] - There is a gradual increase in the percentage of revenues coming from specialty crops, with a target of achieving a balanced portfolio [17] - The company is focused on maintaining a disciplined approach to capital allocation, prioritizing stock buybacks over aggressive asset sales [26] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the potential negative impact of trade relationships with China on the agricultural industry, but believes any effects on land values and rents will be muted and temporary [9] - The company anticipates that the agricultural market will face challenges due to weather conditions affecting crop planting, which may lead to yield losses [60] - Management remains optimistic about long-term food demand and the fundamental scarcity of farmland, which they believe will support future growth [47] Other Important Information - The company has filed a motion to dismiss a class-action lawsuit, which they believe is meritless [42] - Management indicated that they are not currently considering eliminating the dividend, as they aim to balance the interests of different investors [66] Q&A Session Summary Question: What types of crops and locations of the farms sold thus far in 2019? - The company sells based on local market conditions and aims to achieve good returns while lightening exposure in certain regions, particularly in the Midwest [14][16] Question: How is the company thinking about leverage in relation to asset sales? - The company views asset sales as leverage neutral, with proceeds first used to reduce debt associated with sold farms [18][19] Question: What is the outlook for the acquisition market? - The company is not likely to aggressively accelerate asset sales, as current market conditions do not present significant buying opportunities [22][23] Question: How does the revenue line look on a same-store basis? - Most of the revenue reduction is attributed to tenant reimbursement issues rather than a decrease in actual reimbursements [32][33] Question: What are the challenges faced in specific agricultural regions? - The Northern Plains and High Plains regions are struggling due to transportation costs and market pricing, affecting rental income [37][39] Question: What is the status of the class-action lawsuit? - The company has filed a motion to dismiss the lawsuit, which they believe lacks merit [42] Question: How does the company view the impact of trade negotiations on agriculture? - Management believes that a breakdown in trade negotiations could have a negative short-term impact on farm operators, but long-term effects on land values will be modest [46][47]