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Rural Funds — Rural Funds Management (RFM Almond Funds) — Corporate Update (July 2015)

19 slides from Rural Funds's corporate update, July 2015

  1. Slide 1: RFM Almond Funds: 2015 Investor update

    RFM Almond Funds: 2015 Investor update Presented by: James Powell July 2015

  2. Slide 2: Agenda

    Agenda RFM attendees RFM Almond Funds: 2015 Andrea Lemmon 1. Investor & Adviser update Executive Manager – Funds Management – Industry update – 2014 harvest overview – 2015 distributions – 2015 harvest overview Daryl Winter National Manager - – Key projects Almonds – Conclusion 2. Californian Drough

  3. Slide 3: Industry update

    Industry update  Positive conditions continue for Australian almond growers, with good growing conditions and high prices  Australian almond industry “coming of age” measured by production, export sales and domestic consumption growth  Global demand continues to exceed supply  Californian 2015 c

  4. Slide 4: Almond price AUD

    Almond price AUD $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 May‐05 Sep‐05 Jan‐06 May‐06 Sep‐06 Jan‐07 May‐07 Sep‐07 Jan‐08 May‐08 Sep‐08 Jan‐09 May‐09 Sep‐09 Jan‐10 May‐10 Sep‐10 Jan‐11 May‐11 Sep‐11 Jan‐12 May‐12 Sep‐12 Jan‐13 May‐13 Sep‐13 Jan‐14 May‐14 Sep‐14 Jan‐15 May‐15 Notes: 1

  5. Slide 5: Industry update

    Industry update Three key factors provide a promising outlook for 1. Exceptional Californian drought the Australian almond industry: 1. Difficult conditions for Californian growers, source of 80% of the world’s almonds; 2. Declining AUD, favourable for Australian growers as almonds traded in USD; an

  6. Slide 6: 2014 harvest overview

    2014 harvest overview Almond Fund 2006 2007 2008 Project year 8 7 6 Yield ‐ t/ha 3.16 3.41 3.06 Almond price ‐ ($/kg) $8.79 $8.99 $8.83  Observations – Smaller crop following large 2013 crop (biennial bearing) – High yield compared to industry standard for 2014 – Costs affected by higher water usag

  7. Slide 7: 2015 distribution

    2015 distribution Almond Fund 2006 2007 2008 Harvest proceeds from 2014 crop $6,950.15 $6,616.11 $5,826.76 Interest revenue $32.96 $14.19 $10.71 Less estimated operating costs for 2015 crop: Management Fee ($226.17) ($245.92) ($245.92) Licence Fee ($1,438.42) ($1,250.79) ($1,250.77) Operating Costs

  8. Slide 8: 2015 harvest update

    2015 harvest update Almond Fund 2006 2007 2008 Project year 9 8 7 Groves size (ha) 0.25 0.2158 0.2158 Estimated yield ‐ t/ha 4.10 4.20 4.20  Observations – Larger crop for all varieties following smaller 2014 crop (biennial bearing), with approx. 80% hulling and shelling completed – High yield comp

  9. Slide 9: Key projects

    Key projects • FY15 projects included: – Frost fans installation – Drip tube upgrade (see Fig 1) – New bores – Harvest equipment • FY16 projects: – New bores and bore replacement – Fences – Harvest equipment – Scientific equipment Figure 1: Drip tube irrigation depiction 9

  10. Slide 10: Conclusion

    Conclusion • Continuing positive industry fundamentals for Australian almond growers • Distributions for the crop harvested in 2014, for all projects, to be processed in October following project audits • 2015 crop is ~80% processed and the expectation is for a significant crop (above 4t per hectare

  11. Slide 11: Californian drought

    Californian drought Presented by: Daryl Winter July 2015 Image: Lucy Nicholson/Reuters

  12. Slide 12: Californian agricultural production

    Californian agricultural production  California is the country's largest California's top 10 valued agricultural agricultural producer and exporter, commodities (2013) produces more than 400 agricultural Nursery plants commodities Tomatoes  Produces nearly half of US-grown Hay fruits, nuts and veg

  13. Slide 13: Record breaking and multi-year

    Record breaking and multi-year Source: Visual News / US Drought Monitor 13

  14. Slide 14: Diminishing snowpack - Lake Tahoe region

    Diminishing snowpack - Lake Tahoe region February 2011 February 2012 February 2014 Source: NASA 14

  15. Slide 15: Reservoir conditions

    Reservoir conditions Source: CDSE 15

  16. Slide 16: Reservoir conditions

    Reservoir conditions Folsom Lake, north of Sacramento, California Source: DMCSEE 16

  17. Slide 17: Combating perception

    Combating perception Source: California Almond Sustainability Program, California DWR 17

  18. Slide 18: What are the implications?

    What are the implications?  6.6 million acre-foot reduction in surface water  $2.2 billion economic cost  Loss of 17,100 seasonal and part-time jobs  $810 million in lost crop revenue, $203 million in dairy and other livestock value and additional groundwater pumping costing up to $454 million 

  19. Slide 19: Disclaimer

    Disclaimer RFM AFSL 226701 as Responsible Entity (RE) for RFM Almond Fund 2006 (ARSN 117 859 391), RFM Almond Fund 2007 (ARSN 124 998 527) and RFM Almond Fund 2008 (ARSN 127 947 960), has prepared this presentation based on information available to it. Although all reasonable care has been taken to

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