Americold Realty Trust swung to a profit in the second quarter after it hiked rent for space in its freezer-warehouses and charged more to ship goods in trucks on behalf of customers.
Net income at the Atlanta-based real estate investment trust reached $3.9 million for the quarter, compared to a $13.4 million loss in the same period a year earlier. Revenue rose 11% to $730 million.
Funds from operations, a key metric for REITs, increased 69% to $65 million, partly because of its warehouse acquisitions.
Cold storage specialists like Americold and Lineage Logistics have faced headwinds because of supply chain disruptions and labor shortages. In response, Americold increased prices to rent space in its facilities and for transportation services.
“We continue to make great progress in repricing our warehouse business to offset inflationary pressures,” Americold CEO George Chappelle said during a Thursday conference call.
Total rent and storage revenue per physical occupied pallet increased 6% to $62.41 from $58.50 per pallet a year earlier. Revenue from transportation services rose 4% to $82 million.
Americold recorded quarterly losses in the second and fourth quarters of 2021 and the first quarter of this year. In November, Americold fired CEO Fred Boehler and replaced him with Chappelle, a former Tyson Foods executive. In March this year, Americold fired Carlos Rodriguez as chief operating officer.
Despite the industry’s problems, private equity firm Bain Capital and Texas real estate developer Barber Partners created a $500 million fund to build cold-storage facilities in high-growth markets. The partnership’s new warehouses will be branded as Chill Storage facilities.
Americold is also expanding to meet an expected increase in demand. In September last year, it bought an 11.5 million-cubic-foot warehouse in Newark, New Jersey, for $377 million. The REIT also has acquired properties in the past year in Denver, St. Louis and Australia.
Americold owns and operates 249 temperature-controlled warehouses and other facilities in the U.S., Canada, Brazil, Chile, Poland, the United Kingdom and other countries. Its customers include Kroger, Safeway and other retailers, and food manufacturers like Conagra and Smithfield.