Americold Realty Trust(US:COLD)2023-05-05 02:49Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.29, a 12% increase compared to the prior year, driven by a 12.3% revenue growth and a 26.1% NOI growth in the global warehouse same-store pool on a constant currency basis [42][43] - Same-store economic occupancy increased by 748 basis points year-over-year to 84.6%, marking a record-setting first quarter level [15][17] - Rent and storage revenue per economic occupied pallet increased by 10.3% compared to the prior year, while service revenue per throughput pallet increased by 8.6% [15][23] Business Line Data and Key Metrics Changes - The fixed commitment storage contracts accounted for 46.1% of rent and storage revenue, representing a 630 basis point improvement over the first quarter of 2022 [8][44] - Rent and storage revenue from fixed commitment contracts increased to $480 million, up from $367 million in the first quarter of 2022 [17] Market Data and Key Metrics Changes - The company is experiencing a low churn rate of approximately 3.1% of total warehouse revenues, consistent with historical rates [45] - The company has seen significant market share gains attributed to food manufacturers ramping up production and the increase in fixed commitments [62] Company Strategy and Development Direction - The company is focused on increasing fixed commitment contracts to smooth out revenue and reduce seasonality impacts [8][107] - Recent investments include a joint venture in Dubai, where the company owns 49% of RSA Cold Chain, indicating a strategic move to expand in the Middle East [19] - The company is also pursuing partnerships, such as with DP World, to enhance its logistics capabilities globally [46] Management's Comments on Operating Environment and Future Outlook - Management has increased the full-year 2023 AFFO per share guidance to a range of $1.16 to $1.26, reflecting strong first-quarter results and the impact of a recent cybersecurity event [21][43] - The company expects economic occupancy to increase by approximately 275 to 375 basis points for the full year, with a projected decline in throughput volumes of 1% to 3% [22][49] - Management acknowledges the ongoing cybersecurity event as a disruption but emphasizes commitment to long-term growth and operational recovery [28][90] Other Important Information - The company has invested $20 million in cybersecurity enhancements since late 2020, indicating a proactive approach to risk management [40] - The company expects SG&A expenses for the full year to be in the range of $228 million to $239 million, with core SG&A expected to be between $206 million and $215 million [25] Q&A Session Summary Question: What factors contributed to the higher occupancy in Q1? - Management indicated that the increase was primarily driven by food manufacturers ramping up production and a record-setting increase in fixed commitments, resulting in over $100 million year-over-year revenue growth in fixed commitments [30][62] Question: How does the company view occupancy trends for the remainder of the year? - Management expects occupancy to continue increasing throughout the year, with potential seasonal fluctuations but an overall upward trend anticipated for Q3 and Q4 [78] Question: What is the impact of the cybersecurity event on guidance? - Management acknowledged that the ongoing cybersecurity event is impacting multiple line items, estimating a drag of approximately $17 million to $20 million on guidance [116] Question: How is customer reaction to the cybersecurity incident? - Management emphasized proactive communication and the implementation of manual processes to maintain service levels during the recovery from the cybersecurity event [124] Question: What is the outlook for Europe? - Management reported that the European portfolio is performing well, with high occupancy and customer activity, and expects a good year ahead [129]