Americold Realty Trust, Inc. (NYSE: COLD) (the “Company”), a global leader in temperature-controlled logistics, real estate, and value-added services focused on the ownership, operation, acquisition and development of temperature-controlled warehouses, today announced financial and operating results for the first quarter ended March 31, 2024.
George Chappelle, Chief Executive Officer of Americold Realty Trust, stated, “We are pleased with our first quarter where we delivered exceptional operational results and continued to execute on our core priorities. We produced double digit growth in total NOI which resulted in a year-over-year increase in AFFO per share of over 28%. This performance was primarily driven by our Global Warehouse same store pool, which generated NOI growth of 10.1%, on a constant currency basis. Our strong same-store pool results were due to significant improvements in our Services Margins, where we delivered record first quarter margins of 10.7%, on a constant currency basis. Our laser focus on our four core priorities; Customer Service, Labor Management, Pricing, and Development, is the catalyst which allowed us to achieve these profitable results, which we expect to be sustainable across our platform over the long term.”
“Our significant investments in our ERP infrastructure are showing early positive returns, resulting in improved revenue recognition and better variable cost management, and are delivering sustainable returns in line with our previously disclosed expectations. Additionally, our collaborations with CPKC and DP World continue to fuel our development pipeline for future profitable growth as we broke ground this quarter on our inaugural facility on CPKC’s intermodal terminal in Kansas City, and have entered Phase 3 of our expansion project in Dubai with our JV partner RSA Global. Lastly, we are pleased to announce a new conventional expansion project in Sydney, Australia, anchored by one of the country’s largest grocers, for a total investment of approximately $36 million US dollars.”
First Quarter 2024 Highlights
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Total revenue of $665.0 million, a 1.7% change from $676.5 million in Q1 2023.
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Total NOI increased 12.4% to $210.8 million from $187.6 million in Q1 2023.
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Net income of $9.8 million, or $0.03 per diluted common share.
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Core FFO of $77.3 million, or $0.27 per diluted common share.
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AFFO of $104.9 million, or $0.37 per diluted common share.
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Global Warehouse segment same store revenue decreased 0.7% on an actual basis, or increased 0.8% on a constant currency basis. Global Warehouse segment same store NOI increased 8.6%, or 10.1% on a constant currency basis.
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Broke ground on two developments in Kansas City, Missouri, and Dubai with our two strategic partners, CPKC and DP World.
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Announced expansion project in Sydney, Australia, for $36 million, anchored by one of the country’s largest grocers. This expansion consists of 2.8 million cubic feet and 13,000 pallet positions.
2024 Outlook
The table below includes the details of our annual guidance. The Company’s guidance is provided for informational purposes based on current plans and assumptions and is subject to change. The ranges for these metrics do not include the impact of acquisitions, dispositions, or capital markets activity beyond that which has been previously announced.
| As of | As of | |
| May 9, 2024 | February 22, 2024 | |
| Warehouse segment same store revenue growth (constant currency) | 2.5% – 5.5% | 2.5% – 5.5% |
| Warehouse segment same store NOI growth (constant currency) | 700 – 750 bps higher than associated revenue | 400 – 450 bps higher than associated revenue |
| Warehouse segment non-same store NOI | $(7)M – $1M | $(3)M – $9M |
| Transportation and Managed segment NOI | $42M – $47M | $45M – $50M |
| Total selling, general and administrative expense (inclusive of share-based compensation expense of $23M – $25M and $5M – $7M of Orion amortization) | $247M – $261M | $247M – $261M |
| Interest expense | $135M – $143M | $141M – $149M |
| Current income tax expense | $9M – $12M | $9M – $12M |
| Deferred income tax benefit | $6M – $8M | $6M – $8M |
| Non real estate depreciation and amortization expense | $109M – $117M | $112M – $118M |
| Total maintenance capital expenditures | $80M – $90M | $80M – $90M |
| Development starts(1) | $200M – $300M | $200M – $300M |
| AFFO per share | $1.38 – $1.46 | $1.32 – $1.42 |
| Assumed FX rates | 1 ARS = 0.0012 USD 1 AUS = 0.6576 USD 1 BRL = 0.1925 USD 1 CAD = 0.7401 USD 1 EUR = 1.0857 USD 1 GBP = 1.2684 USD 1 NZD = 0.6128 USD 1 PLN = 0.2507 USD |
1 ARS = 0.0012 USD 1 AUS = 0.6615 USD 1 BRL = 0.2016 USD 1 CAD = 0.7438 USD 1 EUR = 1.0914 USD 1 GBP = 1.2662 USD 1 NZD = 0.6168 USD 1 PLN = 0.2520 USD |
Investor Webcast and Conference Call
The Company will hold a webcast and conference call on Thursday, May 9, 2024 at 5:00 p.m. Eastern Time to discuss its first quarter 2024 results. A live webcast of the call will be available via the Investors section of Americold Realty Trust’s website at www.americold.com. To listen to the live webcast, please go to the site at least fifteen minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.
The conference call can also be accessed by dialing 1-877-407-3982 or 1-201-493-6780. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID#13743082. The telephone replay will be available starting shortly after the call until May 23, 2024.
The Company’s supplemental package will be available prior to the conference call in the Investors section of the Company’s website at http://ir.americold.com.
During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.
First Quarter 2024 Total Company Financial Results
Total revenue for the first quarter of 2024 was $665.0 million, a 1.7% change from the $676.5 million from the same quarter of the prior year, which was the result of changes in our Transportation and Third-party managed segments, partially offset by growth within our Global Warehouse segment. The growth within our Global Warehouse segment was driven by incremental revenue from recently completed expansion and development projects, our pricing initiatives and rate escalations.
Total NOI for the first quarter of 2024 was $210.8 million, an increase of 12.4% from the same quarter of the prior year. This increase is a result of strong variable cost control driving higher warehouse services margins.
For the first quarter of 2024, the Company reported net income of $9.8 million, or $0.03 earnings per diluted share, compared to net loss of $2.6 million, or $0.01 loss per diluted share, for the comparable quarter of the prior year.
Core EBITDA was $155.8 million for the first quarter of 2024, compared to $133.1 million for the comparable quarter of the prior year. This reflects a 17.1% increase over prior year on an actual basis, and 18.9% on a constant currency basis. The increase is due to the same factors driving the increase in NOI mentioned above.
For the first quarter of 2024, Core FFO was $77.3 million, or $0.27 per diluted share, compared to $60.8 million, or $0.22 per diluted share, for the first quarter of 2023.
For the first quarter of 2024, AFFO was $104.9 million, or $0.37 per diluted share, compared to $79.9 million, or $0.29 per diluted share, for the same quarter of the prior year.
Please see the Company’s supplemental financial information for the definitions and reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures.
First Quarter 2024 Global Warehouse Segment Results
The following table presents revenues, contribution (NOI) and margins for our same store and non-same store warehouses with a reconciliation to the total financial metrics of our warehouse segment for the three months and year ended March 31, 2024. Refer to our “Real Estate Portfolio” section below for the composition of our non-same store pool.
| Three Months Ended March 31, | Change | ||||||||||||||||
| Dollars and units in thousands, except per pallet data | 2024 Actual | 2024 Constant Currency(1) | 2023 Actual | Actual | Constant Currency | ||||||||||||
| TOTAL WAREHOUSE SEGMENT | |||||||||||||||||
| Number of total warehouses | 236 | 238 | n/a | n/a | |||||||||||||
| Rent and storage | $ | 269,424 | $ | 274,666 | $ | 271,407 | (0.7) % | 1.2 | % | ||||||||
| Warehouse services | 328,286 | 332,428 | 323,645 | 1.4 | % | 2.7 | % | ||||||||||
| Total revenue | $ | 597,710 | $ | 607,094 | $ | 595,052 | 0.4 | % | 2.0 | % | |||||||
| Global Warehouse contribution (NOI) | $ | 197,131 | $ | 199,991 | $ | 174,827 | 12.8 | % | 14.4 | % | |||||||
| Global Warehouse margin | 33.0 | % | 32.9 | % | 29.4 | % | 360 bps | 356 bps | |||||||||
| Global Warehouse rent and storage metrics: | |||||||||||||||||
| Average economic occupied pallets | 4,393 | n/a | 4,553 | (3.5) % | n/a | ||||||||||||
| Average physical occupied pallets | 3,810 | n/a | 4,190 | (9.1) % | n/a | ||||||||||||
| Average physical pallet positions | 5,531 | n/a | 5,417 | 2.1 | % | n/a | |||||||||||
| Economic occupancy percentage | 79.4 | % | n/a | 84.0 | % | -462 bps | n/a | ||||||||||
| Physical occupancy percentage | 68.9 | % | n/a | 77.3 | % | -846 bps | n/a | ||||||||||
| Total rent and storage revenue per average economic occupied pallet | $ | 61.33 | $ | 62.52 | $ | 59.62 | 2.9 | % | 4.9 | % | |||||||
| Total rent and storage revenue per average physical occupied pallet | $ | 70.71 | $ | 72.09 | $ | 64.77 | 9.2 | % | 11.3 | % | |||||||
| Global Warehouse services metrics: | |||||||||||||||||
| Throughput pallets | 9,050 | n/a | 9,653 | (6.2 | )% | n/a | |||||||||||
| Total warehouse services revenue per throughput pallet | $ | 36.27 | $ | 36.73 | $ | 33.53 | 8.2 | % | 9.6 | % | |||||||
| SAME STORE WAREHOUSE | |||||||||||||||||
| Number of same store warehouses | 226 | 226 | n/a | n/a | |||||||||||||
| Global Warehouse same store revenue: | |||||||||||||||||
| Rent and storage | $ | 256,295 | $ | 261,450 | $ | 264,050 | (2.9) % | (1.0 | )% | ||||||||
| Warehouse services | 320,416 | 324,447 | 316,978 | 1.1 | % | 2.4 | % | ||||||||||
| Total same store revenue | $ | 576,711 | $ | 585,897 | $ | 581,028 | (0.7) % | 0.8 | % | ||||||||
| Global Warehouse same store contribution (NOI) | $ | 200,582 | $ | 203,386 | $ | 184,717 | 8.6 | % | 10.1 | % | |||||||
| Global Warehouse same store margin | 34.8 | % | 34.7 | % | 31.8 | % | 299 bps | 292 bps | |||||||||
| Global Warehouse same store rent and storage metrics: | |||||||||||||||||
| Average economic occupied pallets | 4,242 | n/a | 4,453 | (4.7) % | n/a | ||||||||||||
| Average physical occupied pallets | 3,683 | n/a | 4,107 | (10.3) % | n/a | ||||||||||||
| Average physical pallet positions | 5,246 | n/a | 5,277 | (0.6) % | n/a | ||||||||||||
| Economic occupancy percentage | 80.9 | % | n/a | 84.4 | % | -352 bps | n/a | ||||||||||
| Physical occupancy percentage | 70.2 | % | n/a | 77.8 | % | -762 bps | n/a | ||||||||||
| Same store rent and storage revenue per average economic occupied pallet | $ | 60.42 | $ | 61.63 | $ | 59.30 | 1.9 | % | 3.9 | % | |||||||
| Same store rent and storage revenue per average physical occupied pallet | $ | 69.59 | $ | 70.99 | $ | 64.29 | 8.2 | % | 10.4 | % | |||||||
| Global Warehouse same store services metrics: | |||||||||||||||||
| Throughput pallets | 8,682 | n/a | 9,396 | (7.6) % | n/a | ||||||||||||
| Same store warehouse services revenue per throughput pallet | $ | 36.91 | $ | 37.37 | $ | 33.74 | 9.4 | % | 10.8 | % | |||||||
| Three Months Ended March 31, | Change | ||||||||||||||
| Dollars and units in thousands, except per pallet data | 2024 Actual | 2024 Constant Currency(1) | 2023 Actual | Actual | Constant Currency | ||||||||||
| NON-SAME STORE WAREHOUSE | |||||||||||||||
| Number of non-same store warehouses(2) | 10 | 12 | n/a | n/a | |||||||||||
| Global Warehouse non-same store revenue: | |||||||||||||||
| Rent and storage | $ | 13,129 | $ | 13,216 | $ | 7,357 | n/r | n/r | |||||||
| Warehouse services | 7,870 | 7,981 | 6,667 | n/r | n/r | ||||||||||
| Total non-same store revenue | $ | 20,999 | $ | 21,197 | $ | 14,024 | n/r | n/r | |||||||
| Global Warehouse non-same store contribution (NOI) | $ | (3,451 | ) | $ | (3,395 | ) | $ | (9,890 | ) | n/r | n/r | ||||
| Global Warehouse non-same store margin | (16.4 | )% | (16.0 | )% | (70.5 | )% | n/r | n/r | |||||||
| Global Warehouse non-same store rent and storage metrics: | |||||||||||||||
| Average economic occupied pallets | 151 | n/a | 100 | n/r | n/a | ||||||||||
| Average physical occupied pallets | 127 | n/a | 83 | n/r | n/a | ||||||||||
| Average physical pallet positions | 285 | n/a | 140 | n/r | n/a | ||||||||||
| Economic occupancy percentage | 53.0 | % | n/a | 71.4 | % | n/r | n/a | ||||||||
| Physical occupancy percentage | 44.6 | % | n/a | 59.3 | % | n/r | n/a | ||||||||
| Non-same store rent and storage revenue per average economic occupied pallet | $ | 86.95 | $ | 87.52 | $ | 73.57 | n/r | n/r | |||||||
| Non-same store rent and storage revenue per average physical occupied pallet | $ | 103.38 | $ | 104.06 | $ | 88.64 | n/r | n/r | |||||||
| Global Warehouse non-same store services metrics: | |||||||||||||||
| Throughput pallets | 368 | n/a | 257 | n/r | n/a | ||||||||||
| Non-same store warehouse services revenue per throughput pallet | $ | 21.39 | $ | 21.69 | $ | 25.94 | n/r | n/r | |||||||
(1) The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.
(2) Refer to our “Real Estate Portfolio” section below for the composition of our non-same store pool.
(n/a = not applicable)
(n/r = not relevant)
For the first quarter of 2024, Global Warehouse segment revenue was $597.7 million, an increase of $2.7 million, or 0.4%, compared to $595.1 million for the first quarter of 2023. This growth was principally driven by recently completed development projects and acquisitions, and our pricing initiatives and rate escalations. This was partially offset by lower occupancy and throughput pallets due to consumer buying habits and the unfavorable impact of foreign currency translation.
Global Warehouse segment contribution (NOI) was $197.1 million for the first quarter of 2024 as compared to $174.8 million for the first quarter of 2023, an increase of $22.3 million or 12.8%. Global Warehouse segment contribution (NOI) increased due to higher revenue, strong variable cost controls and labor efficiencies. Global Warehouse segment margin was 33.0% for the first quarter of 2024, a 360 basis point increase compared to the same quarter of the prior year, driven by improvement in our warehouse services margin.
Fixed Commitment Rent and Storage Revenue
As of March 31, 2024, $597.9 million of the Company’s annualized rent and storage revenue were derived from customers with fixed commitment storage contracts. This compares to $576.8 million at the end of the fourth quarter of 2023 and $480.4 million at the end of the first quarter of 2023. We continue to make progress on commercializing business under this type of arrangement. On a combined pro forma basis, assuming a full twelve months of acquisitions revenue, 54.2% of rent and storage revenue was generated from fixed commitment storage contracts.
Economic and Physical Occupancy
Contracts that contain fixed commitments are designed to ensure the Company’s customers have space available when needed. For the first quarter of 2024, economic occupancy for the total warehouse segment was 79.4% and warehouse segment same store pool was 80.9%, representing a 1,054 basis point and 1,066 basis point increase above physical occupancy, respectively. Economic occupancy for the total warehouse segment decreased 462 basis points, and the warehouse segment same store pool decreased 352 basis points as compared to the first quarter of 2023. The reduction in occupancy reflects the ramp in manufacturer production during the fourth quarter of 2022 as labor improved, which did not recur in 2023.
Real Estate Portfolio
As of March 31, 2024, the Company’s portfolio consists of 241 facilities. The Company ended the first quarter of 2024 with 236 facilities in its Global Warehouse segment portfolio and five facilities in its Third-party managed segment. The same store population consists of 226 facilities for the quarter ended March 31, 2024. The remaining 10 non-same store population consists of: five sites in the expansion and development phase, two facilities that we purchased in 2023, one facility requiring capital investment in anticipation of repurposing, one leased facility expiring during the second quarter of 2024 which has already ramped down operations, and one site in which we have ceased operations and intend to lease to a third party.
Balance Sheet Activity and Liquidity
As of March 31, 2024, the Company had total liquidity of approximately $732.5 million, including cash and capacity on its revolving credit facility. Total debt outstanding was $3.2 billion (inclusive of $235.2 million of financing leases/sale lease-backs and exclusive of unamortized deferred financing fees), of which 93% was in an unsecured structure. At quarter end, net debt to pro forma Core EBITDA was approximately 5.4x. The Company’s total debt outstanding includes $3.0 billion of unsecured debt, which excludes sale-leaseback and financing lease obligations. The Company’s real estate debt has a remaining weighted average term of 4.9 years and carries a weighted average contractual interest rate of 3.9%. As of March 31, 2024, 86% of the Company’s total debt outstanding was at a fixed rate, inclusive of hedged variable-rate for fixed-rate debt. The Company has no material debt maturities until 2026, inclusive of extension options.
Dividend
On March 7, 2024, the Company’s Board of Directors declared a dividend of $0.22 per share for the first quarter of 2024, which was paid on April 15, 2024 to common stockholders of record as of March 28, 2024.