Mainland business
helps A&B results

The gains offset a lower
operating profit for Matson Navigation

By Russ Lynch
Star-Bulletin

Alexander & Baldwin Inc. today reported a second-quarter profit only slightly higher than last year's, saying that while revenues at its big Matson Navigation Co. subsidiary were up a little, Matson also incurred higher costs.

A&B reported a profit of $18.3 million, or 40 cents a share, on revenues of $317.9 million for the three months that ended June 30. In the equivalent quarter last year, A&B had a profit of $17.8 million, or 39 cents a share, on revenues of $308 million.

The results were in line with the estimates of several national stock market analysts.

Matson's revenues were up 1 percent compared to the 1996 quarter, but the shipping line's operating profit of $22.8 million was down 14 percent from $26.6 million in the 1996 second quarter.

The company said shipments of automobiles and containers to and from Hawaii were down and costs were higher at the Matson container terminals.

However, Matson moved more cargo in its Guam service as well as up and down the West Coast and also was able to charge slightly higher rates in its mainland-Hawaii cargo service.

Second-quarter Hawaii container volume was down 2 percent compared to the second quarter of last year and automobile shipments between the mainland and Hawaii were down 17 percent.

A higher profit margin at the California and Hawaiian Sugar Co. refinery in California boosted A&B's food business operating profit to more than twice what it was in the 1996 quarter -- $6.6 million in the latest period compared to $2.7 million in the year-earlier period.

A&B's property leasing business produced an operating profit of $6.4 million in the latest quarter, up 3 percent from $6.2 million in the equivalent period of 1996. Property sales produced an operating profit of $3.1 million in the 1997 quarter, compared to $3 million in the 1996 period.

John C. Couch, A&B board chairman, president and chief executive officer, said the company found it easier to make money on the mainland where the economy is much more robust than in Hawaii.

But the current lack of vitality in Hawaii's economy has produced some attractive real estate investment opportunities, Couch said.