Analyst Note| Kevin Brown |
Americold Realty had a disappointing first quarter, though we didn't see anything in the period that would materially affect our long-term outlook or $34 fair value estimate. With the pandemic causing low demand from restaurants in the first quarter, food manufacturers are not fully utilizing inventory space, though management sees that demand ramping up as the vaccination level progresses. As a result, same-store economic occupancy was only 76.7% in the first quarter, 600 basis points lower than the same period in 2020, and same-store physical occupancy was 920 basis points lower to 68.1%. Offsetting the lower occupancy was solid same-store rent growth of 4.7%, which led to same-store revenue falling only 1.8%. While Americold was able to control expenses and keep the same-store figure flat year over year, the revenue decline caused same-store net operating income to fall 5.2%. As a result, Americold reported adjusted funds from operations of just $0.30 per share for the first quarter, $0.03 below the same period in 2020.