Americold Realty Trust(US:COLD)2024-02-23 03:19Financial Data and Key Metrics Changes - For the full year 2023, the company achieved a record same-store economic occupancy of 84.3%, an increase of almost 400 basis points compared to the previous record of 80.5% [22][61] - The company reported an AFFO per share of $0.38 for Q4 2023, a 31% increase year-over-year, marking a record level for quarterly AFFO per share [56] - The total net debt outstanding at the end of the quarter was $3.2 billion, with total liquidity of $797 million [74] Business Line Data and Key Metrics Changes - Rent and storage revenue from fixed commitment contracts increased to $577 million in Q4 2023, compared to $420 million in Q4 2022, representing a significant improvement [35] - Service revenue per throughput pallet increased by 9.1% in Q4 2023, reflecting the company's focus on pricing initiatives [66] - The company introduced a new labor metric indicating that 32% of hourly associates had less than 12 months of experience, down from a COVID high of 41% [24] Market Data and Key Metrics Changes - Throughput volumes declined by approximately 760 basis points year-over-year, although the decline improved sequentially by 140 basis points [29] - The company expects a slight decline in throughput volumes of 1% to 3% in 2024 due to a slowdown in end consumer demand [75] - The European warehouse business NOI grew by approximately 32% in 2023 despite a $237 million non-cash goodwill impairment due to higher interest rates and a weakened macroeconomic environment [113] Company Strategy and Development Direction - The company announced a $130 million greenfield development in Kansas City, Missouri, in collaboration with Canadian Pacific Kansas City (CPKC) [28] - A new multi-customer major market distribution center is planned in Dubai for $35 million, which will optimize temperature-sensitive food flows in the Gulf Cooperation Council [54][55] - The company is focused on maintaining high occupancy and fixed commitment contracts while expanding its development pipeline, which remains robust at over $1 billion [119] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a recovery in throughput volumes in the second half of 2024, despite challenges in the first half due to weak consumer demand [101][95] - The company anticipates that economic occupancy may decline slightly in 2024, but remains optimistic about maintaining strong occupancy levels [30][88] - Management highlighted the importance of customer service and commercialization efforts in driving occupancy and revenue growth [62] Other Important Information - The company completed five automated developments in 2023, enhancing its service capabilities [86] - A new Vice President of Investor Relations, Kevin Reed, has joined the company, bringing extensive experience in investor relations [36] - The company is committed to community initiatives, partnering with Feed The Children to assist families in underserved communities [33] Q&A Session Summary Question: What is the outlook for throughput in 2024? - Management expects a weak first half of 2024 but anticipates a stronger second half as consumer demand picks up [95][101] Question: How does the company view occupancy trends? - The company set a record occupancy of over 84% and is confident in maintaining strong occupancy levels despite a slight expected decline [96][118] Question: What are the expectations for new developments? - The company has a robust development pipeline and expects to continue pursuing both customer-dedicated builds and strategic partnerships for new developments [120][119]