Barnwell Industries' net slides as it goes without tax break
Barnwell Industries Inc. said yesterday its net income dropped 63.2 percent in its fiscal second quarter, but said most of the drop stemmed from a $1.96 million tax benefit in the year-ago quarter.
The Honolulu-based company, which conducts oil and natural gas operations in Alberta, Canada, and has real estate holdings on the Big Island, said there were no such tax benefits in the quarter that ended March 31.
Net income was $1.3 million, or 15 cents a share, compared with $3.4 million, or 39 cents a share, a year earlier. Revenue fell 17.1 percent to $11.2 million from $13.5 million.
The company's board of directors also maintained its dividend at 5 cents a share. It will be payable June 15 to stockholders of record on June 1.
Barnwell, which has benefited in recent years by the surge in energy prices, said its oil and natural gas unit invested nearly $5 million last quarter in oil and gas exploration and development. The unit participated in the drilling of 14 gross wells during the period.
"Of these 14 gross wells, 12 gross wells are considered to be successful while one gross well is being evaluated and one gross well was unsuccessful," said Morton Kinzler, chairman and chief executive of Barnwell.
Earlier this quarter, a wholly owned subsidiary of the company invested in a joint venture that purchased fee-simple ownership of two single-family house lots, and agreed to acquire five additional lots, in the Lot 4A Increment I area of Kaupulehu in North Kona to construct turnkey-style, single-family homes for future sales. The subsidiary is a joint venture that is 80 percent owned by Barnwell and 20 percent owned by a company controlled by Terry Johnston, a director of Barnwell.
"We believe this investment, together with our 1.5 percent passive investment (in its fiscal first quarter) in Hualalai Resort, one of the most successful resort projects in the U.S., will open up new opportunities for the future growth of the company," Kinzler said.