Lineage said the cold storage market is still working through a supply overhang after the industry added too much capacity in response to the pandemic. It estimates the market is 10% overbuilt, noting it has idled some locations recently and that a few competitors are on the brink of shutting down.
Lineage (NASDAQ: LINE) ceased operations at 10 facilities last year and at 5 locations so far this year. The actions have idled 2.5 million square feet, or 1% of its U.S. portfolio. It said on a Wednesday quarterly call with **** ysts that some locations could come back online.
It plans to sell roughly $1 billion in **** ets, using the proceeds to deleverage the balance sheet (from 6x net debt-to-EBITDA to 5-5.5x). Management said supply rationalization will ultimately favor scaled providers with automation and transportation capabilities.
The company reported a net loss of $32 million for the second quarter on Wednesday before the market opened. Adjusted funds from operations (AFFO) of 76 cents per share came in 5 cents lower year over year.
Consolidated net revenue of $1.36 billion was 1% higher y/y and slightly ahead of the $1.35 billion consensus estimate.

#lineage