• Same-Store Economic Occupancy: Improved slightly to almost 79% in Q4 2024.
• Rent and Storage Revenue from Fixed Commitment Contracts: Approximately 59% for Q4, a 680 basis point improvement year-over-year.
• Same-Store Warehouse Services NOI: Incremental $125 million generated in 2024, exceeding the $100 million commitment.
• Same-Store Warehouse Services Margins: Finished at 13%, up almost 7 percentage points from last year.
• Same-Store Rent and Storage Revenue per Economically Occupied Pallet: Increased by approximately 3% year-over-year on a constant currency basis in Q4.
• Same-Store Services Revenue per Throughput Pallet: Increased by approximately 6% year-over-year in Q4.
• Same-Store NOI: Approximately $204 million in Q4, a 6% increase from the prior year.
• Q4 AFFO: Approximately $106 million or $0.37 per share.
• Full Year Same-Store NOI Growth: Over 11% in 2024.
• Full Year AFFO: $1.47 per share in 2024.
• 2025 AFFO Guidance: $1.51 to $1.59 per share, with a midpoint of $1.55, representing an approximate 5% increase from 2024.
• Total Net Debt: $3.4 billion at quarter end.
• Total Liquidity: Approximately $922 million.
• Net Debt to Core EBITDA: Approximately 5.4 times.
• 2025 Same-Store Constant Currency Revenue Growth Guidance: 2% to 4%.
• 2025 Same-Store Constant Currency NOI Growth Guidance: 4% to 6%.
• 2025 Interest Expense Guidance: $145 million to $150 million, with $19 million capitalized.
• 2025 Maintenance Capital Expenditures Guidance: $82 million to $88 million.

• Warning! GuruFocus has detected 7 Warning Signs with COLD.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Americold Realty Trust Inc (NYSE:COLD) achieved a 16% increase in AFFO per share in 2024 compared to 2023, demonstrating strong financial performance.
• The company successfully grew its same-store warehouse services margins to 13%, up almost 7 percentage points from the previous year.
• Americold Realty Trust Inc (NYSE:COLD) has been recognized for exceptional customer service, with multiple facilities receiving awards from major clients like Conagra, Kraft Heinz, and Butterball.
• The company has a robust development pipeline exceeding $1 billion, with strategic partnerships and new projects underway, including a $150 million automated expansion in Dallas-Fort Worth.
• Americold Realty Trust Inc (NYSE:COLD) maintained a strong capital position with total liquidity of approximately $922 million and a net debt to core EBITDA ratio of 5.4 times.

Negative Points

• Economic occupancy remained flat, with expectations of only slight improvements in 2025, indicating challenges in increasing occupancy rates.
• The company is facing a challenging market environment with lower inventory levels and the need for stabilization in the market.
• Non-same-store NOI is expected to be between $0 to $7 million in 2025, reflecting the slow ramp-up of new facilities and potential underperformance.
• The gap between economic and physical occupancy is widening due to increased fixed commitments, which could pose a risk if not managed effectively.
• Americold Realty Trust Inc (NYSE:COLD) is strategically exiting five facilities in 2025, which may lead to transitional challenges and potential cost implications.

Q & A Highlights

Q: Can you explain the occupancy target for 2025 and how it relates to economic and physical occupancy? A: George Chappelle, CEO, stated that the guidance is flat, indicating no improvement in economic occupancy over the year. The expectation is for stabilization with a return to seasonal trends, where the first half of the year will be lower than the second half. Robert Chambers, President, added that the gap between physical and economic occupancy is not a concern, as it naturally widens with increased fixed commitments due to the seasonal nature of the business.

Q: How conservative is the service margin guidance, and what are the expectations for future margins? A: George Chappelle, CEO, explained that the service margins are expected to be greater than 12%, which is an expansion from the current base. While the guidance might be slightly conservative, it reflects the current environment's uncertainties. The company is confident in achieving margins in excess of 12% due to productivity initiatives and business mix.

Q: What are the expectations for market stabilization and normalization in 2025? A: George Chappelle, CEO, mentioned that the company expects stabilization in the market with a return to traditional seasonal trends. The belief is that the second half of the year will see higher occupancy due to low current inventory levels and increased throughput. Jay Wells, CFO, added that the company has shown the ability to grow profitability even in a lower base environment.

Q: Can you provide more details on the probability-weighted new business pipeline and its impact on revenue growth? A: Robert Chambers, President, explained that the $200 million probability-weighted pipeline is higher than in previous years, with a focus on long-term deals and fixed commitments. The pipeline includes market share gains and outsourcing opportunities, particularly in the retail sector. The company expects this pipeline to contribute to occupancy gains in the second half of the year.

Q: How are the strategic partnerships with CPKC and DP World contributing to the development pipeline? A: George Chappelle, CEO, stated that the partnerships with CPKC and DP World are part of a $1 billion development pipeline. The projects are underwritten to a 10% to 12% return, with opportunities across various segments and geographies. Robert Chambers, President, added that the current projects cover all three development priorities: expansions, customer-dedicated capacity, and partnership builds.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.