On November 6, 2024, Lineage Inc (LINE, Financial) released its 8-K filing detailing its financial results for the third quarter of 2024. Lineage Inc, a Real Estate Investment Trust (REIT), is the world's largest global temperature-controlled warehouse REIT, providing a range of services including Cold Storage Warehousing and Automated Warehousing. The company focuses on enhancing the supply chain efficiency for food and beverage producers, retailers, and distributors.
Financial Performance and Challenges
Lineage Inc reported a total revenue decrease of 2.2% to $1.3 billion for the third quarter of 2024. Despite this decline, the company faced a net loss of $543 million, or $2.44 per diluted common share. This loss is significant, highlighting the challenges the company faces in managing costs and achieving profitability. The increase in total operating expenses, which rose to $1.85 billion from $1.23 billion, contributed to this loss.
Key Financial Achievements
Lineage Inc's financial achievements include raising $5.1 billion from its July 2024 IPO, marking the largest real estate IPO of all time. The company used these proceeds to reduce $4.9 billion of debt, achieving investment-grade credit ratings from Fitch and Moody's. Additionally, the company declared an initial quarterly dividend of $0.38 per share, representing an annualized dividend rate of $1.52 per share.
Income Statement and Balance Sheet Highlights
Lineage Inc's total NOI increased by 2.1% to $439 million, and Adjusted EBITDA rose by 5.4% to $333 million, with an adjusted EBITDA margin increase of 110 basis points to 24.9%. The company's AFFO saw a significant increase of 51.8% to $208 million, with AFFO per share rising by 20% to $0.90. These metrics are crucial for REITs as they reflect the company's ability to generate cash flow and support dividend payments.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $1.3 billion | $1.329 billion |
| Net Loss | ($543) million | ($50) million |
| Adjusted EBITDA | $333 million | N/A |
| AFFO | $208 million | N/A |
Strategic Developments
Lineage Inc opened a new, fully automated cold storage warehouse in Hazleton, PA, and acquired ColdPoint Logistics for $223 million, expanding its presence in the Kansas City market. These strategic moves are expected to enhance the company's operational capabilities and market reach.
We are excited to report strong results for our first quarter as a public company, demonstrating our ability to perform well in various economic environments," said Greg Lehmkuhl, president and chief executive officer of Lineage, Inc.
Analysis and Outlook
Lineage Inc's performance in the third quarter of 2024 reflects both the opportunities and challenges faced by the company. The successful IPO and debt reduction are significant achievements that strengthen the company's financial position. However, the net loss indicates ongoing challenges in managing operational costs. The company's strategic acquisitions and expansions are expected to drive future growth, but careful management of expenses will be crucial to achieving profitability.
For the full year 2024, Lineage Inc expects Adjusted FFO per share to range between $3.16 and $3.20, with fourth-quarter AFFO projected between $180 million and $190 million. These projections underscore the company's focus on enhancing shareholder value through strategic growth and operational efficiency.
Explore the complete 8-K earnings release (here) from Lineage Inc for further details.
