News Summary
Lineage, a cold-storage REIT, reported a robust performance for Q2, with earnings of $211 million, surpassing projections. The company plans an IPO aimed at raising up to $3.85 billion. Despite a net loss, revenues exceeded expectations, showcasing growth amid ongoing expansion efforts.
Novi, Michigan – Lineage, a cold-storage real estate investment trust, announced a robust performance in its second quarter, reporting funds from operations of $211 million, or 81 cents per share. This figure exceeded Wall Street’s expectations, which had estimated funds from operations at 75 cents per share. Despite facing challenges, the company’s revenue for the quarter reached $1.35 billion, surpassing analysts’ forecasts of $1.33 billion.
However, the company did report a net loss of $6 million, translating to a loss of 3 cents per share for the quarter. Looking ahead, Lineage projects that for the current quarter ending in September, per-share funds from operations will fall between 75 cents and 79 cents. For the full year, the company anticipates a range of $3.20 to $3.40 in funds from operations per share.
As of March 31, the company boasts an extensive operations portfolio with 482 warehouses that have a combined capacity of 3 billion cubic feet. In a noteworthy development, Lineage has filed with the U.S. Securities and Exchange Commission for an initial public offering (IPO) aimed at raising up to $3.85 billion by releasing 47 million shares priced between $70 and $82 each. If the IPO is successful, it could establish Lineage’s market value at around $19.2 billion, potentially making it the largest first-time share sale of 2023.
Strategic Leadership and Financial Insights
For its IPO strategy, Lineage is collaborating with KKR & Co. as its lead financial adviser and has selected 20 underwriters for the offering, including major financial institutions such as Morgan Stanley, Goldman Sachs, Bank of America, JPMorgan Chase, and Wells Fargo. The company has intentions to list its shares on the Nasdaq Global Select Market under the ticker symbol LINE.
Lineage’s financial performance in 2023 shows a historical net loss of $96.2 million against a revenue of $5.3 billion. This represents an increase from a net loss of $76 million and revenue of $4.9 billion in the prior year. The company’s governance has been strengthened recently by the addition of Lynn Wentworth to its board of directors in 2022 and the appointment of Rob Crisci, former CFO of Roper Technologies, as its CFO.
Expansion Plans and Market Context
Lineage has been actively pursuing an aggressive acquisition strategy since 2008 to bolster its global footprint. Recent acquisitions include Grupo Fuentes in Spain, SK Logistics in Vietnam, and VersaCold Logistics Services in Canada. This strategy positions the company for continued growth and competitiveness in an expanding market.
The U.S. initial public offering market has seen a recovery in 2023, with approximately $20 billion raised, marking the best start to a year since 2021. This resurgence provides a favorable environment for companies like Lineage to launch their IPOs and capitalize on investor interest.
Conclusion
With its strong second-quarter earnings and a significant IPO filing, Lineage is positioning itself for substantial growth opportunities in the future while navigating net losses amid increasing revenues. As investors await further developments, the company’s focus on expansion and strategic partnerships will be critical in driving its success moving forward.
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Additional Resources
- DBusiness
- Wikipedia: Cold Storage
- Bloomberg
- Google Search: Lineage Cold Storage REIT
- Free Press
- Encyclopedia Britannica: Real Estate Investment Trust
Author: STAFF HERE NOVI WRITER
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