Americold Realty Trust (NYSE: COLD), a large real estate investment trust (REIT) that develops, owns and operates temperature-controlled warehouses for food products, reported somewhat mixed third-quarter results late Thursday, with revenue beating analysts' estimates by $13.54 million and funds from operations, a key metric of a REIT's cash flow, coming in at 20 cents a share, missing estimates by 13 cents a share, according to website Seeking Alpha.
The Atlanta-based company reported $466.2 million in total revenue, a 16% year-over-year increase. Net operating income, defined as revenue minus all reasonable operating expenses, rose 18.9% to $120.7 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 23.4% to $93.4 million on a constant-currency basis. Americold operates 176 warehouses in five countries. Net income was $27.1 million, compared to net income of $24.5 million in the same quarter last year.
Funds from operations (FFO) rose to $59.1 million, compared to $43.9 million in the same quarter last year, Americold said.
The company's Global Warehouse segment posted revenue of $365.6 million, a 23% increase over the 2018 quarter. Net operating income rose to $113.4 million, a 21.1% year-on-year increase.
Fred Boehler, Americold's president and CEO, said in a statement that the results were "strong." Supply and demand in the segment should be steady for the balance of 2019 and into 2020, Boehler said. "We continue to see a wealth of potential opportunities," he said.
The refrigerated warehouse segment of the global cold chain market, which encompasses an array of industries, is expected to reach $211.9 billion by 2024, with growth compounding annually at 7.7%, according to a report in September by BCC Research. Europe is expected to be the largest regional market for cold chain, with Asia showing the fastest annualized growth, the research said.
In a report earlier this year, real estate services firm CBRE Inc. (NYSE: CBRE) forecast that the U.S. industrial cold storage industry will need to add as much as 100 million square feet of capacity through 2022 to keep up with the anticipated growth of online grocery sales, which is currently about 2% of all U.S. grocery sales. In-progress and newly completed construction of second-quarter U.S. cold storage space amounted to just 4.5 million square feet, or 1.5% of overall industrial real estate construction, CBRE said.
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