Rivco’s Debt Cuts and Market Pressures Pose Strategic Challenges Ahead
Rivco Australia Limited reported a steady quarterly performance with NAV growth and declared its 17th consecutive increasing dividend, while progressing its strategic internalisation.
- Pre-tax NAV rises to $1.86 per share, post-tax NAV at $1.67
- Declared fully franked interim dividend of 3.72 cents per share
- Leased portfolio steady at 53%, WALE extends to 3.6 years
- Water allocation prices surge due to limited supply and early irrigation demand
- Debt facility reduced to $40 million with $18 million drawn, net debt ratio at 5.4%
Quarterly Performance Highlights
Rivco Australia Limited (ASX – RIV) has delivered a solid quarterly update for September 2025, reflecting steady growth in its core water entitlement portfolio and operational metrics. The company’s pre-tax net asset value (NAV) increased by 2 cents to $1.86 per share, while the post-tax NAV also rose by 2 cents to $1.67 per share. This uplift was primarily driven by the award of new season water allocations and elevated water allocation prices heading into the peak irrigation season.
Supporting this performance, Rivco declared a fully franked interim dividend of 3.72 cents per share, payable on 31 October 2025. This marks the company’s 17th consecutive dividend increase since inception, underscoring its commitment to consistent and disciplined capital returns.
Portfolio and Market Dynamics
The company’s leased portfolio percentage remained stable at 53%, with new leases offsetting expiries. Notably, the weighted average lease expiry (WALE) extended to 3.6 years from 2.4 years in the previous quarter, reflecting longer-term lease agreements that provide greater revenue visibility.
Water allocation prices experienced upward pressure during the quarter, driven by limited supply and early-season irrigation demand amid warm and windy conditions. Spot prices in key regions such as the lower Murray reached approximately $300 per megalitre, the highest since 2020. This price environment has bolstered Rivco’s operational cashflows, with receipts from customers rising to $2.8 million for the quarter.
Financial Position and Debt Management
Rivco has strategically reduced its debt facility from $130 million to $40 million to better align with capital requirements and reduce facility fees. At quarter-end, $18 million was drawn, leaving $22 million undrawn and available for future acquisitions or capital initiatives. The company’s net debt to water ratio remains low at 5.4%, up slightly from 4.7% in the prior quarter, reflecting prudent balance sheet management.
Progress on Internalisation and Strategic Outlook
A significant milestone was achieved with shareholders approving the company’s name change to Rivco Australia Limited, effective 15 October 2025, symbolizing its transition to a fully internalised business. The company has engaged key external service providers, completed IT system transfers, and is preparing to move into new offices, all steps toward operational independence.
Looking ahead, Rivco is focused on enhancing and stabilising earnings, refining its dividend framework, and strengthening debt and capital management practices. These efforts aim to support sustainable long-term shareholder value amid evolving market conditions.
Bottom Line?
Rivco’s steady NAV growth and dividend consistency, coupled with its internalisation progress, position it well, but market and climatic uncertainties remain key watchpoints.
Questions in the middle?
- How will Rivco’s internalisation impact operational costs and future profitability?
- What are the company’s plans to increase its leased portfolio beyond 53%?
- How might ongoing water allocation price volatility affect earnings stability?
