Americold Realty Trust(COLD) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported total revenue of $706 million for Q1 2022, reflecting an 11% increase across all segments, primarily driven by the warehouse segment [29] - Total company NOI was $158 million, a 1% increase, while the NOI margin decreased by 234 basis points to 22.4% [29][30] - AFFO per share was $0.26, with core EBITDA at $111 million, a decrease of 5.9% year-over-year [31] Business Line Data and Key Metrics Changes - Global warehouse segment revenue was $541 million, an 11% increase compared to the prior year, with NOI at $146 million, a slight increase of 0.1% [32] - Same-store global warehouse segment revenue was $483 million, up 4.5% year-over-year, while same-store NOI was $139 million, down 4.7% [34][35] - Same-store economic occupancy was 77.6%, reflecting a slight increase of 22 basis points from the previous year [36] Market Data and Key Metrics Changes - The company experienced a 6% total revenue growth in its global warehouse same-store pool, while NOI declined by 3.6% [15] - Power costs increased by approximately 18% year-over-year, significantly impacting the European portfolio [23] - The churn rate remained low at approximately 3.3% of total warehouse revenues, indicating stable customer retention [26] Company Strategy and Development Direction - The company is focused on repricing its warehouse business to offset inflationary pressures, achieving a 5.6% increase in rent and storage revenue per economic occupied pallet [7] - There is an ongoing effort to optimize the labor mix, aiming to increase the proportion of permanent associates to improve productivity and efficiency [8][10] - The company is committed to delivering development projects on time and on budget, with recent projects performing in line with expected yields [12] Management's Comments on Operating Environment and Future Outlook - Management noted that the labor situation remains challenging, with customers struggling to produce at pre-COVID levels due to labor shortages [45] - The company expects inflationary pressures to continue, impacting costs and pricing strategies [40] - There is a commitment to maintaining guidance for AFFO per share in the range of $1 to $1.10, despite ongoing challenges in food manufacturing [40] Other Important Information - The company published its third ESG report, committing to science-based targets for greenhouse gas emissions and aiming for green building certifications on 50% of its portfolio by 2030 [17][18] - A partnership with Kraft Heinz and Feed the Children was announced to deliver frozen potatoes to families in need, highlighting the company's community engagement efforts [18] Q&A Session Summary Question: What are customers saying about labor challenges? - Customers report that the labor situation has not improved, and they are struggling to produce at historical levels [45] Question: How should we think about occupancy trends throughout the year? - The Q1 results were impacted by the timing of Easter, and a normalization is expected with a projected decline of 100 to 200 basis points for the year [46] Question: What is the expectation for refilling the channel amid labor issues? - There is no set timeframe for when the labor force will return to pre-COVID levels, and customers are motivated to increase production but face significant challenges [49] Question: How are inflationary costs being managed? - The company is implementing price increases to cover rising costs, with a focus on quickly passing through these costs to customers [61][62] Question: How is the Russia-Ukraine conflict impacting the business? - The primary impact observed is an increase in power costs, particularly in Europe, but there have been no significant reductions in production levels [66]