Americold Realty Trust ((COLD)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call from Americold Realty Trust painted a picture of both successes and ongoing challenges. While the company celebrated achievements in customer service, margin improvements, and strategic expansions, it also acknowledged hurdles related to occupancy levels and underperforming facilities. This balanced outlook provides a nuanced understanding of Americold’s current operational performance.
Strong Customer Service and Recognition
Americold Realty Trust has been recognized for its exceptional customer service, with multiple facilities receiving prestigious awards. These accolades include the Site of the Year from major clients such as ConAgra, Kraft Heinz, and Butterball, underscoring the company’s commitment to maintaining high standards in customer service.
Improved Economic Occupancy
The company’s same-store economic occupancy showed positive movement, reaching nearly 79% in the fourth quarter. This improvement was supported by a notable increase in rent and storage revenues from fixed commitment storage contracts, which grew by 680 basis points year-over-year, achieving approximately 59%.
Record Same-Store NOI and Margin Improvement
Americold’s same-store warehouse services NOI hit an impressive milestone, surpassing $125 million and exceeding their $100 million commitment. Additionally, the same-store warehouse services margin saw a significant boost, climbing to 13%, a near 7 percentage point increase from the prior year.
Expansion and Development Achievements
The company exceeded its 2024 guidance for announced project starts, including a $150 million automated expansion in Dallas-Fort Worth and a new import-export hub in Canada valued at $79 million. These strategic developments position Americold for continued growth.
Significant AFFO Growth
Americold reported a 16% increase in AFFO per share from 2023, with a full-year AFFO in 2024 reaching $1.47 per share. This growth highlights the company’s strong financial performance and operational efficiency.
Occupancy Challenges
Despite improvements, Americold faces occupancy challenges, with projections for flat economic occupancy in 2025, fluctuating between -100 to +100 basis points change from 2024.
Non-Same Store NOI Concerns
The non-same store pool presented challenges, generating negative NOI for 2024 with expectations of only modest improvements in 2025, ranging between $0 and $7 million.
Portfolio Management and Facility Closures
To address underperformance and manage costs, Americold plans to exit five facilities in 2025, focusing on consolidation to enhance operational efficiency.
Forward-Looking Guidance
Americold’s guidance for 2025 emphasizes operational efficiency and maintaining its strong customer service reputation. The company expects same-store economic occupancy to improve, with a 680 basis point increase in rent and storage revenues. It forecasts a full-year AFFO per share between $1.51 and $1.59, marking a 5% increase from 2024. Additionally, Americold anticipates throughput volume increases and sustained same-store warehouse services margins over 12%. The development pipeline includes significant investments in new facilities in Canada and New Zealand.
In summary, Americold Realty Trust’s latest earnings call reflects a company that is making strides in several key areas while grappling with certain challenges. The positive sentiment surrounding customer service and financial performance is tempered by the need for strategic portfolio management and addressing occupancy issues. Overall, the company appears poised for growth, with a strong focus on operational efficiency and strategic expansions.
