• Earnings of $124.1m, up 103.8m
• Net property income up 5.7%
• AFFO and DPU in-line with forecasts
• Property assets revaluation movement of 1.8%
• Pro forma gearing reduced to 31.8%

Rural Funds Group (ASX: RFF) released its FY26 financial results, showing earnings of $124.1 million, a significant increase of $103.8 million from the previous year. The rise was primarily driven by the contracted sale of assets above book values and the market-to-market of interest rate swaps. Net property income also increased by 5.7% to $100.5 million, attributed to additional rental income from capital expenditure, particularly in macadamia orchards, and indexation. The adjusted funds from operations (AFFO) and distributions per unit (DPU) were in line with forecasts at 11.7 cents per unit and 11.73 cents per unit, respectively. The adjusted net asset value (NAV) rose by 4.5% to $3.22 per unit, reflecting property revaluations and mark-to-market of interest rate swaps. The company also provided forecasts for FY27, expecting AFFO and DPU to remain at 11.7 cents per unit. The portfolio saw a revaluation movement of 1.8%, primarily due to gains on pro forma asset sales. Asset divestments, including six properties and water entitlements, were completed at an average 18% premium to prior book values, providing funding for capital expenditure. Pro forma gearing was reduced to 31.8%, within the target range of 30-35%.

FY27 forecast: AFFO of 11.7 cents per unit, DPU of 11.73 cents per unit

Rural Funds Group expects to maintain AFFO and DPU at 11.7 cents per unit for FY27, with staged development of two properties to generate future AFFO.