Atlanta, Georgia-headquartered Americold Realty, which until Lineage Logistics announced acquisition of Preferred Freezer Services on February 25 was ranked as the world’s largest owner and operator of public refrigerated warehouses, has posted financial and operating results for the fourth quarter and year ending on December 31, 2018.
During Q4 global warehouse segment revenues were $305.5 million, an increase of $7.9 million, or 2.6%, compared to $297.6 million generated in the fourth quarter of 2017. Sales for the full year advanced 3.9% to $1.60 billion.
Warehouse segment contribution was $100.5 million, or 32.9% of segment revenue, for the fourth quarter of 2018, compared to $93.9 million, or 31.6% of segment revenue, for the prior year. This represents a 7.0% improvement in segment profitability over Q4 of 2017 and an expansion of 130 basis points in period-over-period segment margin.
Net income amounted to $2.7 million, or $0.02 per diluted common share, and adjusted net income of $28.9 million for the fourth quarter. For the full year of 2018, net income was $48.0 million, or $0.31 per diluted common share, while adjusted net income was $95.5 million.
The company ended Q4 with 143 facilities in its global warehouse network. Of the total, 136 meet Americold’s definition of facilities with at least 24 months of consecutive “normalized operations” and are reported as “same store.” The remaining seven warehouses are in various stages of operations and are classified as “non-same store.”
Americold reported that it continues to drive its customer mix, warehouse utilization and other productivity improvements, which served to push total warehouse margins to 31.8% in 2018 – a 140 basis point increase over the prior full year.
At the same time, the company expanded its footprint, having stabilized two facilities in Clearfield, Utah, and Middleboro, Massachusetts, and made significant progress toward the completion of a fully automated expansion facility in Chicago, Illinois. Additionally, a letter of intent was signed to build and operate three automated facilities for a major customer.
PortFresh Holdings Plans
On January 31 the acquisition of PortFresh Holdings was announced, along with plans to develop the facility to support temperature-controlled food trade through Georgia’s Port of Savannah by building a 15 million cubic foot state-of-the-art cold storage facility on adjacent land owned by PortFresh. The total price of the purchase, including 163 acres of contiguous land, was approximately $35 million. The cost of planned construction is expected to be between $55 and $65 million.
“The Port of Savannah is one of the fastest growing ports in the United States, and has seen increased traffic of temperature-controlled trade,” said Fred Boehler, Americold’s president and chief executive officer. “With this investment, we are fulfilling our customers’ requests to expand into the growing market, which provides an efficient and cost-effective solution to meet their import and export needs.”
The planned facility will feature 37,000 pallet positions, advanced blast freezing capabilities, plus ample space and infrastructure to support refrigerated container trade. Americold expects to begin construction during the first half of this year, with the opening likely to take place during in the first quarter of 2020.
The Port of Savannah imported 1.8 million TEUs (twenty-foot equivalent units) of containerized cargo in 2017, a 10.6% increase over 2016, making it the nation’s fourth-largest port, according to the 2018 US Ports Report from Descartes Datamyne. Its Southern United States location, ocean carrier network and access to transportation channels, including links to growing markets in South America and Europe, reduces transportation time when compared to Northeastern ports, which require additional trucking and transport.