Farmland Partners ((FPI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Farmland Partners Inc. painted a picture of robust financial performance for the current quarter, underscored by strategic sales and exchanges that have bolstered shareholder value. Despite the positive results, there are concerns about the sustainability of these achievements into the next year, alongside increased legal expenses, which introduce a note of caution.
Strong AFFO Performance
The company reported an Adjusted Funds From Operations (AFFO) of $2.9 million, or $0.07 per share, for the three months ending September 30, 2025. This marks an improvement from the same period in 2024, primarily driven by lower interest expenses and increased interest income.
Sale of Murray Wise Associates
In a strategic move to streamline operations, Farmland Partners sold its brokerage and third-party farm management subsidiary, Murray Wise Associates. This sale is expected to simplify operations and deliver a favorable outcome for shareholders.
Exchange of Series A Preferred Units
The company exchanged $31 million worth of Series A preferred units for properties in Illinois, which have appreciated by 56% over the past decade. This exchange is part of Farmland Partners’ strategy to enhance asset value.
Special Dividend Announcement
Farmland Partners announced plans to issue a special dividend ranging from $0.18 to $0.22 per share in January 2026, reflecting the company’s commitment to returning value to shareholders.
Reduction in Interest Expenses
Interest expenses saw a significant decrease, with a reduction of $3.2 million for the three months and $8.4 million for the nine months ending September 30, 2025. This reduction has positively impacted the company’s financial performance.
Lower Net Income
Despite the positive AFFO, net income was reported at $0.5 million, or $0 per share, lower than the same period in 2024. This decrease was attributed to current period dispositions resulting in a loss of $0.5 million.
Potential Decrease in AFFO Next Year
The company cautioned that the strong AFFO reported this year was partly due to one-time events, and a more modest AFFO is expected in the coming year.
Increased Legal and Accounting Expenses
Legal and accounting expenses have risen due to ongoing litigation, including short and distort cases and a dispute in Louisiana, which could impact future financials.
Forward-Looking Guidance
Farmland Partners provided updated guidance for the full year 2025, projecting AFFO between $14.5 million and $16.6 million, or $0.32 to $0.36 per share. This outlook is supported by increased management fees and interest income from the FPI loan program. Additionally, the company highlighted strategic moves like the sale of Murray Wise Associates and the exchange of Series A preferred units, while also considering broader market conditions such as the potential impact of a new China trade deal on soybean exports.
In conclusion, the earnings call for Farmland Partners Inc. conveyed a strong financial performance for the current quarter, driven by strategic initiatives and reduced expenses. However, the sustainability of these results into the next year remains uncertain, with increased legal costs and potential decreases in AFFO posing challenges. Investors will be keenly watching how the company navigates these hurdles while capitalizing on its strategic moves.