Rural Funds Group

Good morning and welcome to the Rural Funds Group half-year results presentation and the half-year ended 31 December 2025. After the presentation, there will be an opportunity to ask questions. To ask a question via teleconference, press star 1-1. You will hear an automated message advising your hand is raised. To withdraw your question, simply press star 1-1 again. To ask a question via the webcast, type the question in the dialogue box below the presentation and select submit. Please be advised that today's conference is being recorded. I would now like to hand the conference over to James Powell, General Manager of Investor Relations. Sir, please go ahead.

Good morning and welcome to the financial results presentation for the Rural Funds Group for the half year ended 31 December 2025. Presenting today is David Bryant, Managing Director, Tim Sheridan, Chief Operating Officer and Daniel Yap, Chief Financial Officer. After the presentation we've allowed time to take questions from attendees who can submit a question by typing into the question box and clicking submit. For those dialling in today to ask a verbal question please dial style 1 when prompted and I'll now hand over to our first presenter Tim.

Good morning everyone. I will present the financial results for the half before handing over to David Bryant. The first half of FY26 has been a positive period for the group. Net property income is up 7%, gearing has reduced on a pro forma basis and FY27 CAPEX is significantly lower compared to the past several years. Independent valuations and asset sales continue to confirm RFF's asset values and both adjusted funds from operations, AFFO and distributions are on track to achieve full year guidance. Now moving on to the financial results in more detail. The first slide of this section details RFF's key earnings drivers for the period. Net property income from leased assets increased by $3 million to $49 million. The 7% increase is mainly due to additional rent being charged from the development of leased macadamia orchards as well as annual indexation mechanisms that occur in all of our leases. Net farming income represented $1.1 million, mainly derived from favourable dryland cropping and cattle results on Kairou. While this result is an improvement on the prior corresponding period, the second half contribution of this segment is forecast to be significantly higher following the harvest of macadamia and cotton crops. From an expense perspective, fund expenses were in line with the prior period. However, interest on debt increased by $4 million. This was largely due to a decrease in the interest that is able to be capitalised, reflecting the completion of various asset development programs. These results provided net cash earnings or adjusted funds from operations of $21.5 million or 5.5 cents on a per unit basis. Importantly, AFFO is on track to achieve full year forecasts, noting the expected second half skew in farming income. After adding non-cash items, earnings of $44 million or 11.3 cents per unit was generated in first half 26. This is compared to $13 million for the prior period. The favourable result driven by positive revaluations on interest rate swaps as well as the gain on the sale of water entitlements. Finally on this page, RFF paid two distributions during the half, totalling 5.87 cents per unit which is in line with forecast. Now looking at the balance sheet. Assets increased marginally during the period as a consequence of development capital expenditure. The adjusted NAV per unit at 31 December was $3.10 per unit, a minor increase of 2 cents per unit, reflecting the mark-to-market of interest rate swaps. Proforma gearing remained largely unchanged at 39.1%, despite $70 million of development capex being deployed during the period. This capex was funded from the sale of two surplus sugarcane properties and excess water entitlements. These transactions demonstrate RFM's commitment to fund capital expenditure with asset sales and ultimately bring RFF's gearing back towards the target range of 30% to 35%. Further to this, additional asset sales are expected during the balance of this financial year. This next page provides additional detail of property valuation movements that have occurred within RFF over the past six months. Independent valuations were arranged for 25% of assets which were in line with book values and consistent with our policy to independently revalue all assets at least every two years. On the remaining portion of the portfolio, directors' valuations were applied. The movement in this segment mainly reflects the depreciation of bearer plans in line with accounting standards. Further evidence to support asset valuations is the divestment of farms which have occurred at or above book value. Two sugarcane farms were sold for 10% above their book value and water entitlements sold at their adjusted book value. Water is held at cost in the statutory accounts in line with accounting standards. and therefore this sale provided a substantial gain as they were sold at approximately 2.5 times their purchase price. Looking now at the capital management aspect of the group. During the period, RFF's core syndicate debt facility went through a scheduled refinance providing a tenor extension and an improvement in the bank margin. The core facility remains well within all covenants including the loan to value ratio and ICR. Despite our intention to fund development capital expenditure program with asset sales, we note that the facility does have sufficient headroom to fund committed capex for FY26 and 27 if necessary. Forecast FY27 committed capital expenditure compared to the prior three years is detailed on this page. It highlights that RFF is now past its peak capex requirement for intensive asset development programs with significantly lower forecast capex to occur in FY27. The debt facility is 60% hedged with a reasonable level of hedging locked in through to FY29. The portion of hedging may also increase as asset sales are completed and debt is reduced, positioning the fund well in the event of any future increases in interest rates. I'll now hand over to David. Thank you.