Americold Reports Q1 Loss, Citing Costs Related to Acquisitions
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Executives at cold storage warehousing and logistics operator Americold Realty Trust said that 15 months into the coronavirus pandemic there remains “ongoing supply chain disruption with reduced inventory holdings and volumes due to COVID-19.”
Manufacturers still are not producing food products at pre-COVID levels, and the recent production activity is not matching demand,” said Fred Boehler, CEO of the Atlanta-based company.
The inventory of food producers is “literally being eaten into,” he said on a conference call after first-quarter financial results were released May 6.
Americold reported a net loss of $14.2 million, or negative 6 cents a share, for the period ending March 31. That compares with a profit of $23.5 million, 12 cents, in the year-ago period.
The company said much of the loss can be attributed to increased acquisition and integration costs.
“From an external growth perspective, we continue to invest in strategic developments and acquisitions which enhance our global network, now spanning 13 countries across four continents,” Boehler said. “Since the beginning of the year, we have signed or completed three complementary acquisitions, Liberty Freezers in Canada, Bowman Stores in the United Kingdom and KMT Brrr! in New Jersey.”
On Dec. 30, AmeriCold closed its acquisition of Agro Merchants Group, the world’s fourth-largest temperature-controlled operator, for $1.74 billion.
In total, AmeriCold spent $2.6 billion for acquisitions, which expanded its cold storage operations by 342 million cubic feet of space.
Boehler said as he has spoken with Americold’s food manufacturing customers they note food production is beginning to increase as the economy recovers.
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“Throughout the COVID-19 pandemic, consumer demand has remained steady,” he said. “With the rollout of the vaccine and continued reopenings, we are seeing food manufacturer activity begin to ramp up again, which should result in more normalized inventory levels.”
The company said revenue increased across all business lines during the quarter:
• Global warehouse revenue increased 27.4% to $485,5 million compared with $381,7million during the 2020 period.
• The third-party managed segment reported revenue increased 12.5% to $73.1 million from $64.9 million.
• The transportation segment reported that revenue increased 112.3% to $76.2 million from $35.9 million during the prior year.
The company said the increases largely were the result of recent acquisitions.
“These increases are partially offset by the continued impacts of COVID-19 and resulting supply chain disruption, which impacted our throughput and lowered holdings across our network as production has been unable to keep up with steady consumer demand,” the company said in a press release that was part of the earnings package.
Americold now owns and operates 233 cold storage facilities, up from 172 at this time last year, with an estimated 1.4 billion cubic feet of space in North America, Europe, Asia-Pacific, and South America.
Americold Logistics ranks No. 25 on the Transport Topics Top 50 list of largest logistics companies in North America.
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