Power REIT (NYSE-A:PW) Inc has reported its financial and operating results for the three and twelve months ended December 31, 2021, showing a jump in revenue for both periods.
For the year ended December 31, 2021, Power REIT saw its revenue vault 98% to $8,457,914 from $4,272,709 in 2020, with net income attributable to common shareholders rising to $4,491,656 from $1,891,644, and basic net income per common share increasing to $1.41 from $0.99.
For the three months ended December 31, 2021, the company reported revenue of $1,785,809, up 28% from $1,394,613 at the same stage a year earlier, with net income attributable to common shareholders at $670,730 versus $863,970 in 2020, and basic net income per common share of $0.21 versus $0.42.
In a statement, David Lesser, Power REIT's chief executive officer commented: "We are pleased with our external growth activity last year. We invested approximately $48 million in 9 greenhouse properties primarily from the funds generated through our non-dilutive rights offering completed in February of 2021. These acquisitions are consistent with our business strategy that we commenced in 2019, positioning ourselves as an emerging technology company that focuses on real estate for greenhouse plant cultivation."
"With a focus on environmental sustainability across our entire platform, greenhouses provide superior sustainable farming alternatives for the future. Our goal moving into 2022 and beyond is to continue our growth efforts and generate long-term cash flow from our portfolio," he added.
READ: Power REIT says to fund additional capital improvements to greenhouse cultivation property in Maine
Lesser concluded, "From an earnings perspective, we increased our Core FFO per common share by 44% year over year. We remain confident in our long-term strategy that greenhouses provide the most economically and environmentally sustainable path for cultivation and focused on managing our existing portfolio in lockstep with accretive acquisitions."
During the year, Power REIT deployed all of the approximately $37 million of the capital raised in the rights offering which was completed in February 2021. During the fourth quarter of 2021, the trust reported a quarterly FFO (funds from operations) of $0.35 per share.
Power REIT's portfolio currently comprises:
- 21 Controlled Environment Agriculture (CEA) properties (greenhouses) totaling more than 1,000,000 square feet
- 7 solar farm ground leases totaling 601 acres; and
- 112 miles of railroad property
During 2021, the trust acquired nine greenhouse properties at an average unlevered yield of approximately 18%, which it said is indicative of the current market conditions where it seeks to acquire and expand its greenhouse portfolio.
Power REIT said its cash and cash equivalents totaled approximately $3.2 million as of December 31, 2021, a decrease of approximately $2.4 million from December 31, 2020. The primary use of cash was for working capital requirements and investment activities including $30.9 million paid for land and greenhouse cultivation facilities with $11.2 paid for construction and improvements for these facilities.
Greenhouse deal
In other news, Power REIT also said it is adding to its real estate portfolio with another 1.1 million square foot greenhouse facility in Nebraska.
The real estate company acquired the cultivation facility and associated housing property in the town of O’Neill for US$9.35 million.
In addition to that acquisition, Power REIT inked a long-term, triple-net lease with Millennium Produce of Nebraska LLC that sees Power REIT fund capital improvements to upgrade the tomato-ready cultivation facility for a capital commitment of $534,000.
"This is a very exciting transaction for Power REIT - it is our largest greenhouse facility acquired to-date and our first focused on the cultivation of food crops,” CEO Lesser said.
“We acquired this facility at a significant discount to replacement cost with minimal upgrades needed at closing to commence cultivation. The facility had been operational for 15 years cultivating tomatoes, and we are confident that MillPro will leverage the "ready-to-grow" status of the greenhouse to be a competitive, high-quality, low-cost producer of fresh tomatoes."
The transaction, along with the Millennium Produce agreement, sees Power REIT double its greenhouse footprint.
“We are excited to continue our relationship with MILC at another greenhouse cultivation facility and our first food cultivation operation,” Lesser added. “We believe greenhouse cultivation is the sustainable and low-cost approach to relative to traditional outdoor cultivation of certain crops.”
The company has posted an updated investor presentation which is available using the following link: https://www.pwreit.com/investor
Power REIT, with a focus on the 'Triple Bottom Line' and a commitment to people, planet and profit, is a specialized real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets including properties for Controlled Environment Agriculture, Renewable Energy and Transportation.
The company is actively seeking to expand its real estate portfolio related to Controlled Environment Agriculture in the form of greenhouses for the cultivation of food and cannabis.
--Updated with acquisition information--
Contact the author at jon.hopkins@proactiveinvestors.com