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Lineage Idles 5 More Cold Storage Facilities as Market Grapples With 10% Oversupply

Lineage Logistics halted operations at five cold storage facilities so far this year as part of an industry rationalization effort addressing overcapacity. The company estimates the cold storage market remains 10% overbuilt following pandemic-era expansion. Lineage shuttered 10 locations last year and said some competitors face potential closure.

The company reported a net loss of $32 million in the second quarter, with adjusted funds from operations declining 5 cents year-over-year to 76 cents per share. Same-warehouse occupancy improved to 75.8%, though pallet throughput fell 2% and storage revenue per pallet declined 1%. Food inventory declines at ports reduced container volumes 14%.

Lineage plans to sell approximately $1 billion in assets to reduce leverage from 6x net debt-to-EBITDA to 5x. The company expects normal seasonal patterns ahead with modest revenue headwinds. Management reiterated guidance for net pricing increases of 1% to 2%, narrowed full-year adjusted EBITDA guidance to $1.29 billion, and raised AFFO guidance to $2.05 per share. Lineage has 20 facilities under construction that will add $134 million in incremental net operating income.