A&B’s net up
4% despite competition

But the company's stock
falls as it reports lower profit
at Matson unit

By Russ Lynch
Star-Bulletin

Alexander & Baldwin Inc. today reported a 4 percent increase in its second-quarter profit, despite a drop of 26 percent in the operating profit from its biggest subsidiary, Matson Navigation Co.

A&B said Matson faced increased competition, in the form of a new barge competitor in the mainland-Hawaii freight trade, as well as a continued fall-off in Hawaii cargo volume because of the state's stagnant economy.

In Nasdaq trading today, A&B shares fell $1.50 to close at $27.88.

The company reported an overall net profit of $19 million, or 42 cents a share, for the quarter ending June 30, compared with a net of $18.3 million, or 40 cents a share, in the equivalent quarter of 1997. Quarterly revenues were up 15 percent at $365.8 million from $317.9 million.

Matson produced an operating profit of $16.8 million in the latest quarter, down from $22.8 million in the year-earlier quarter. Property development and management had an operating profit of $19.6 million, up from $9.5 million.

Low sugar prices helped cut profits by more than half in A&B's food-products business, which had an operating profit of $3 million compared with $6.9 million in last year's period. The company said the low prices at its California & Hawaiian Sugar Co. refinery in California were somewhat offset by bigger volume and lower costs of raw sugar production.

John C. Couch, board chairman, president and chief executive officer, said the company continues to face challenges.

"While the strong mainland real estate market has helped our property segment, Hawaii's economy remains stalled," he said. "The islands' economic doldrums continue to adversely affect our ocean transportation and local property results."