The board of INVL Baltic Farmland, a company that invests in agricultural land, has proposed paying EUR 217,000 in dividends for 2015, EUR 0.066 per share. The company's board has submitted the proposal to the INVL Baltic Farmland meeting of shareholders, scheduled for 25 March. If the general meeting approves the dividend, it will be 10 percent higher year-on-year.
"We are guided by our approved dividend policy and have proposed that the capital surplus be paid out to the shareholders," INVL Baltic Farmland Board Chairman Alvydas Banys said.
INVL Baltic Farmland has also reported its 2016 forecast, projecting annual lease revenues at EUR 530,000 and a net profit at EUR 300,000. The projections are based on current land lease contracts as well as the assumption that the value of land controlled by INVL Baltic Farmland will not change in 2016 and that there will be no land sale transactions.
"Demand for farmland for lease in fertile soil areas remains high, so we expect revenues from lease to increase by 15 percent per hectare on average in 2016, depending on the fertility of the land," said Kristina Urboniene, the director of INVL Farmland Management, which is the administrator of INVL Baltic Farmland's land.
She added that, following the prevailing trend to rely on multi-year plans in the agriculture business, the company is currently seeking to move to long-term lease contracts that are more beneficial to both parties. As the demand keeps growing on the market, those who opt for long-term contracts will be entitled to conservative price indexing on an annual basis, whereas customers opting for short-term contracts will face faster increases in price.
In 2015, INVL Baltic Farmland reported an audited net profit of EUR 838,000 on sales of EUR 460,000, while its net asset value per share rose by 8.4 percent from EUR 3.02 to EUR 3.27, including the dividend.
The subsidiary companies of INVL Baltic Farmland, which is listed on the NASDAQ Vilnius stock exchange, control 3,000 hectares of farmland in Lithuania, leasing it to agricultural companies and farmers. INVL Baltic Farmland's equity stood at EUR 10.57 million at the end of 2015, at EUR 3.21 per share. INVL Baltic Farmland's dividend policy is to pay shareholders dividends of not less than EUR 0.06 per share.