Lineage, Inc.(US:LINE)2025-04-30 12:00Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $1,290 million, down 3% compared to Q1 2024 [14] - Adjusted EBITDA decreased 7% to $304 million, with an adjusted EBITDA margin down 110 basis points to 23.5% [14] - AFFO for the quarter increased 48% to $219 million, with AFFO per share up 6% to $0.86 [14] Business Line Data and Key Metrics Changes - Global warehousing segment revenue was down 3% to $348 million, with NOI also down 3% to $57 million, maintaining a flat NOI margin at 16.4% [19] - Same store warehouse NOI decreased by 7.9% [8] - The company reported a 6% growth in AFFO per share despite the overall revenue decline [8] Market Data and Key Metrics Changes - Same store physical occupancy remained strong at 76.5%, despite lower revenue per throughput and occupied talent [9] - The macroeconomic environment has led to customers pausing supply chain investments and maintaining lean inventory levels [9] Company Strategy and Development Direction - The company announced landmark agreements with Tyson Foods, involving approximately $1 billion in capital deployment, expected to generate over $100 million in annual EBITDA [5][6] - The company is focused on enhancing its technology and automation capabilities, with ongoing development projects in Europe and the U.S. [12][25] - The company aims to maintain its competitive advantages through a technology-first approach and a robust pipeline of strategic acquisitions [26] Management's Comments on Operating Environment and Future Outlook - Management noted that the current operating environment is characterized by high interest rates, shifting consumer sentiment, and macroeconomic uncertainty [9] - The company expects to return to same store warehouse growth in the second half of the year, driven by normal seasonal increases and easier comparisons [10][18] - Management expressed confidence in the company's ability to weather the current challenges due to its diversified customer base and strong balance sheet [26][27] Other Important Information - The company has a net debt of $6.7 billion and total liquidity of $1.7 billion, providing flexibility for future capital deployment opportunities [20] - The company is maintaining its 2025 guidance for adjusted EBITDA and AFFO per share, despite near-term uncertainties [21] Q&A Session Summary Question: Can you clarify the throughput volume tied to import/export business? - Management clarified that 15% of throughput is directly tied to import/export business, with the rest related to domestic consumption [30] Question: What is the long-term commitment from Tyson Foods regarding the acquired assets? - Management indicated that the agreements with Tyson Foods are long-term and multiyear, primarily focused on distribution [39][41] Question: How does the company expect occupancy to trend throughout the year? - Management expects normal seasonality to return in the second half of the year, with elevated levels compared to the first half [46] Question: What is driving the weakness in storage and service rental rates? - Management noted that the decline in rental rates is due to customers resetting volume guarantees at lower levels and increased competition in the market [52] Question: How is the company managing labor costs in the current environment? - Management reported stable labor costs with wage increases of about 3.5% per year, while also focusing on productivity improvements [102] Question: How does the company view the impact of tariffs on customer behavior? - Management noted that tariffs have created uncertainty, leading customers to delay major supply chain decisions [70]