Farmland Partners reports solid Q3 2025 performance with special dividend plans, yet signals potential headwinds for next year's earnings.
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Summary
- Farmland Partners reported a strong quarter for AFFO performance, but cautioned that next year's performance may be more modest due to one-time events driving current results.
- The company announced the sale of its brokerage and farm management subsidiary, Merriwise Associates, to simplify operations and focus on core business areas.
- A special dividend of 18 to 22 cents per share is planned for January 2026, reflecting continued shareholder value commitment.
- Net income was lower compared to the previous year, mainly due to decreased gains from property dispositions, although AFFO improved due to lower interest expenses and operating costs.
- Debt levels were reduced, and no debt is subject to interest rate resets in 2025, providing financial stability amidst market uncertainties.
- Management highlighted a recent transaction involving the exchange of preferred units for Illinois properties, showcasing asset appreciation.
- The company plans to renew its MetLife term loan and maintain its current capital structure, with no immediate plans for significant buybacks due to the upcoming special dividend.
- Farmland Partners continues to focus on its loan program to support revenue, with an expectation of maintaining high current yield through secured lending.
- Management expressed a cautious but positive outlook on the potential impact of a new China trade deal on the agricultural market, though it may not significantly alter long-term rents or land values.
Good day everyone and thank you for joining this Farmland Partners Q3 2025 earnings call. My name is Jim and I'll be the operator for today's session. A reminder that all lines have been placed in a muted or listen only mode to reduce background noise and later you will have the opportunity to ask questions. Also a reminder, today's session is being recorded. It is now my pleasure to turn the floor over to our Host, President and CEO, Mr. Luca Fabbri. Please go ahead, sir.
Thank you Jim Good morning and welcome to Farmland Partners Third Quarter 2025 Earnings Conference Call and webcast. We truly appreciate your taking the time to join us for this call because we see them as a very important opportunity to share with you our thinking and our strategy in a format less formal and more interactive than public filings and press releases. I will now turn over the call to our General Counsel Christine Garrison for some customary preliminary remarks.
Thank you, Luca, and thank you. To everyone on the call. The press release announcing our third quarter earnings was distributed after market closed yesterday. The supplemental package has been posted to the Investor Relations section of our website under the subheader Events and Presentations. For those who listen to the recording of this presentation, we remind you that the remarks made herein are as of today October 30, 2025 and will not be updated subsequent to this call. During this call we will make forward looking statements including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impact of acquisitions, dispositions and financing activities, business development opportunities, as well as comments on our outlook for our business rents and the broader agricultural market. We will also discuss certain non GAAP financial measures including Net Operating Income, FFO, Adjusted FFO, EBITDAre, and Adjusted EBITDAre. Definitions of these non GAAP measures, as well as reconciliations to the most comparable GAAP measures are included in the Company's press release announcing third quarter 2025 earnings, which is available on our website farmlandpartners.com and is furnished as an exhibit to our current report on Form 8K dated October 29, 2025. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the sec. I would now like to turn the call to our Executive Chairman Paul Pittman, Paul.