Americold Realty Trust(COLD) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.28 for Q2 2023, with revenue growth of 3.9% and NOI growth of 13.8% year-over-year on a constant currency basis [33][57] - The full year 2023 AFFO per share guidance has been increased to a range of $1.20 to $1.30, reflecting strong operational performance despite the impact of a cybersecurity event [57][62] Business Line Data and Key Metrics Changes - Same store economic occupancy increased to 84.8%, a record-setting level for the second quarter, with a year-over-year increase of 687 basis points [16][20] - Rent and storage revenue from fixed commitment contracts increased to $521 million, up from $379 million in Q2 2022, representing an 800 basis point improvement [20] Market Data and Key Metrics Changes - The company observed a moderation in inflationary pressures, particularly in power costs, which positively impacted cost control measures [10][17] - Economic occupancy is expected to increase by approximately 400 to 500 basis points for the full year, with year-to-date increases of 722 basis points [57] Company Strategy and Development Direction - The company is focusing on expanding its strategic alliances, including a new agreement with Canadian Pacific Kansas City (CPKC) to build cold storage facilities along their railway network [37][62] - The company exited its LATAM joint venture to pursue better opportunities with lower risks, indicating a strategic shift towards more aligned partnerships [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the impact of the cybersecurity event is largely contained to Q2, with expectations for improved operational performance moving forward [31][46] - The company anticipates further expansion announcements in the second half of the year, driven by a robust development pipeline that includes both expansions and new projects [48][62] Other Important Information - The company completed the acquisition of a distribution facility in Brisbane, Australia, for approximately AUD36 million, expecting to stabilize it at a range of 9% to 10% over the next three years [22] - The company has classified its Brazilian joint venture, Comfrio, as assets held for sale and is exploring strategic alternatives for it [54] Q&A Session Summary Question: What is the cash usage for the Brazilian JV and the process to monetize it? - Management indicated that there is interest from buyers and a process is ongoing to sell the asset [38] Question: Are there lingering impacts from the cybersecurity event in Q3? - Management confirmed that the bulk of the impact has been accounted for in Q2, and guidance reflects no significant ongoing effects [46] Question: How does the company view competition from newer automated operators? - Management stated that they also provide highly automated solutions and continue to gain market share, as evidenced by record occupancy and low churn rates [70][71]