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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (77647)	6/8/2025 9:22:40 AM
From: E_K_S	Read Replies (1) \| Respond to of 78484

Re: Americold Realty Trust (COLD) Let's Ask Perplexity. Americold Realty Trust (COLD): Is Ongoing Losses Normal for This REIT Category?Americold Realty Trust (COLD), which specializes in temperature-controlled warehouses, has indeed reported net losses for each of the last four years: 2024: -$94 million 2023: -$336 million 2022: -$19 million 2021: -$30 million 3 Is This Typical for REITs in This Category? No, ongoing net losses are not typical for REITs as a category, including those focused on logistics or industrial assets. Most successful REITs, especially those with established portfolios, are structured to generate steady, recurring income and positive net earnings over time. The REIT model is built around collecting rents, managing expenses, and distributing the majority of taxable income as dividends to shareholders. Persistent net losses are generally a red flag and not the norm for the sector. What’s Happening with Americold? Americold’s recent losses have been driven by a mix of operational challenges, market conditions, and significant non-cash charges like goodwill impairment (for example, a $236.5 million charge in Q4 2023) 1 2. Despite these net losses, Americold has reported growth in key operational metrics such as: Adjusted Funds From Operations (AFFO) per share: Up 16% in 2024, and up 31% in Q4 2023 versus the prior year 1 2. Warehouse same-store Net Operating Income (NOI): Up 11.4% in 2024 and 7.9% in 2023 1 2. Improvements in warehouse services margins and operational efficiency 1 2. These metrics are important because REIT investors often focus on AFFO and NOI as better indicators of ongoing cash-generating ability than net income, which can be distorted by depreciation and non-cash charges. How Does Americold Compare to Other REITs?Most large REITs—especially in the industrial, logistics, and storage sectors—report positive net income and pay regular dividends. Persistent net losses, especially over multiple years, are unusual and often reflect company-specific issues such as: Heavy acquisition or expansion costs High depreciation and amortization (a non-cash expense) Impairments or write-downs Industry-specific headwinds (e.g., rising interest rates, inflation, or supply/demand imbalances) 4 5 Americold’s losses have been larger than most peers, but the company emphasizes improving operational metrics and cash flow, suggesting that management believes the business is fundamentally sound and on a path to recovery 1 2. Key Takeaways Ongoing net losses are not normal for REITs as a category, including logistics or industrial REITs. Americold’s losses are partly due to non-cash charges and operational challenges, but the company is showing improvement in cash flow metrics like AFFO and NOI 1 2. Investors in REITs should look at AFFO and NOI alongside net income to assess true operating performance. Persistent losses over several years are a concern and should be evaluated in the context of management’s turnaround efforts and industry trends. In summary: While some REITs may report occasional losses due to market cycles or one-time charges, ongoing net losses over several years are not typical for the sector and warrant careful analysis of the underlying causes and management’s strategy for recovery --------------------------------------------------------- The goodwill impairment charge that significantly affected Americold’s recent financials was recognized in the fourth quarter of 2023 and totaled $236.5 million 4 6. This impairment was a major driver of the company’s reported losses for that year. Is this a one time event? We typicall monitor the FFO & AFFO metrics for REITs so those appear to be growing & positive. However, will need to monitor future reports to see if this type of write down is a recurring expense. Thank's for the alert.