JACKSONVILLE, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- FRP Holdings, Inc. (NASDAQ-FRPH) -
FRP Holdings is a real estate asset developer and manager across three differing asset classes including Multifamily, Industrial and Commercial, and Mining and Royalty.
Third Quarter Highlights
- 8% increase in Net Income ($1.4 million vs $1.3 million)
- 39% increase in pro rata NOI ($11.3 million vs $8.1 million)
- Pro rata NOI includes a one-time, catch-up, minimum royalty payment of $1.9 million that applies to the prior twenty-four months as the tenant failed to meet a production requirement contained in the lease. This revenue was straight-lined over the life of the lease.
- 23% increase in the Multifamily segment's pro rata NOI primarily due to lease up of Bryant St., 408 Jackson, and The Verge. This comparison includes the results for these three projects from the same period last year (when these projects were still in our Development segment).
- 10% increase in Industrial and Commercial segment NOI
Shell construction is nearly complete for our Chelsea Project in Harford County, MD, which we expect to come in under budget. We are working to get shovel ready the sites of our two industrial JV's in Florida with an anticipated construction start for both in March of 2025. These three projects represent 640,000 square feet of new, Class A, industrial product requiring $116 million in total capex and are in keeping with our stated strategy of focusing on industrial development. We have underwritten all these projects at an unlevered 6-7% yield.
Comparative Results of Operations for the Three months ended September 30, 2024 and 2023
Consolidated Results
| (dollars in thousands) | Three Months EndedSeptember 30, | |||||||||||||
| 2024 | 2023 | Change | % | |||||||||||
| Revenues: | ||||||||||||||
| Lease revenue | $ | 7,434 | 7,509 | $ | (75 | ) | -1.0 | % | ||||||
| Mining royalty and rents | 3,199 | 3,082 | 117 | 3.8 | % | |||||||||
| Total revenues | 10,633 | 10,591 | 42 | .4 | % | |||||||||
| Cost of operations: | ||||||||||||||
| Depreciation, depletion and amortization | 2,551 | 2,816 | (265 | ) | -9.4 | % | ||||||||
| Operating expenses | 1,860 | 2,012 | (152 | ) | -7.6 | % | ||||||||
| Property taxes | 850 | 919 | (69 | ) | -7.5 | % | ||||||||
| General and administrative | 2,289 | 1,948 | 341 | 17.5 | % | |||||||||
| Total cost of operations | 7,550 | 7,695 | (145 | ) | -1.9 | % | ||||||||
| Total operating profit | 3,083 | 2,896 | 187 | 6.5 | % | |||||||||
| Net investment income | 2,304 | 2,700 | (396 | ) | -14.7 | % | ||||||||
| Interest expense | (742 | ) | (1,116 | ) | 374 | -33.5 | % | |||||||
| Equity in loss of joint ventures | (2,839 | ) | (2,913 | ) | 74 | -2.5 | % | |||||||
| (Loss) gain on sale of real estate | - | (1 | ) | 1 | -100.0 | % | ||||||||
| Income before income taxes | 1,806 | 1,566 | 240 | 15.3 | % | |||||||||
| Provision for income taxes | 427 | 467 | (40 | ) | -8.6 | % | ||||||||
| Net income | 1,379 | 1,099 | 280 | 25.5 | % | |||||||||
| Income (loss) attributable to noncontrolling interest | 18 | (160 | ) | 178 | -111.3 | % | ||||||||
| Net income attributable to the Company | $ | 1,361 | 1,259 | $ | 102 | 8.1 | % | |||||||
- Operating profit increased 6% as favorable results in Multifamily, Industrial and Commercial, and Mining were partially offset by higher net Development segment and General and administrative costs.
- Net investment income decreased $396,000 due to reduced income from our lending ventures ($75,000) and decreased preferred interest ($613,000) due to the conversion of FRP preferred equity to common equity at Bryant Street partially offset by increased earnings on cash equivalents ($292,000).
- Interest expense decreased $374,000 compared to the same quarter last year as we capitalized $408,000 more interest this quarter, partially offset by higher costs related to the increase in our line of credit with Wells Fargo. More interest was capitalized due to increased in-house and joint venture projects under development this quarter compared to last year.
- Equity in loss of Joint Ventures improved $74,000 due to improved results of our unconsolidated joint ventures. Results improved at The Verge ($372,000) due to lease up but were lower at .408 Jackson ($104,000) due to an increased real estate tax assessment and BC Realty ($196,000) due to a $302,000 write off of design costs for offices on phase II as we made the decision to repurpose the plan to a higher and better use.
Our Multifamily Segment has two consolidated joint ventures (Dock 79 and The Maren).
| Three months ended September 30 | |||||||||||||||||||
| (dollars in thousands) | 2024 | % | 2023 | % | Change | % | |||||||||||||
| Lease revenue | $ | 5,682 | 100.0 | % | 5,633 | 100.0 | % | 49 | .9 | % | |||||||||
| Depreciation and amortization | 1,985 | 35.0 | % | 2,265 | 40.1 | % | (280 | ) | -12.4 | % | |||||||||
| Operating expenses | 1,573 | 27.7 | % | 1,773 | 31.5 | % | (200 | ) | -11.3 | % | |||||||||
| Property taxes | 565 | 9.9 | % | 555 | 9.9 | % | 10 | 1.8 | % | ||||||||||
| Cost of operations | 4,123 | 72.6 | % | 4,593 | 81.5 | % | (470 | ) | -10.2 | % | |||||||||
| Operating profit before G&A | $ | 1,559 | 27.4 | % | 1,040 | 18.5 | % | 519 | 49.9 | % | |||||||||
Multifamily Segment (Pro rata unconsolidated)
Our Multifamily Segment has four unconsolidated joint ventures (Bryant Street, The Verge, Riverside, and .408 Jackson). Riverside was moved from the Development segment to the Multifamily segment in 2022, Bryant Street and .408 Jackson moved as of the beginning of 2024 and The Verge moved effective July 1, 2024, each upon reaching lease up stabilization.
| Three months ended September 30 | |||||||||||||||||||
| (dollars in thousands) | 2024 | % | 2023 | % | Change | % | |||||||||||||
| Lease revenue | $ | 5,119 | 100.0 | % | 4,103 | 100.0 | % | 1,016 | 24.8 | % | |||||||||
| Depreciation and amortization | 2,228 | 43.5 | % | 1,813 | 44.2 | % | 415 | 22.9 | % | ||||||||||
| Operating expenses | 1,895 | 37.0 | % | 1,652 | 40.3 | % | 243 | 14.7 | % | ||||||||||
| Property taxes | 467 | 9.1 | % | 487 | 11.9 | % | (20 | ) | -4.1 | % | |||||||||
| Cost of operations | 4,590 |
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