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Real estate, Matson
lift A&B’s net

The company's 16% gain comes
despite a surge in fuel prices

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By Russ Lynch
Star-Bulletin

Third-quarter profits at Alexander & Baldwin Inc. rose 15.7 percent, thanks to strong performance at its biggest subsidiary, Matson Navigation Co., and a boost in income from its real estate business.

A&B said today it had a net of $21.4 million for the three months through Sept. 30, compared with $18.5 million in the 1999 quarter.

Per-share income in the latest period was 52 cents a share vs. the year-earlier's 43 cents, up 20.9 percent with 2.8 million more shares outstanding this year.

The company's earnings were in line with analysts' estimates and A&B's Nasdaq-traded shares closed up 44 cents at $25 today on Wall Street.

A&B reported third-quarter revenues of $273.5 million, up 11.7 percent from revenues of $244.9 million in the third-quarter of last year.

"A 19 percent improvement in Matson's operating profit was achieved despite a significant increase in fuel prices," said W. Allen Doane, A&B president and chief executive officer. "Auto and freight volume is increasing for the second consecutive year, after many years of declines."

Matson had two fuel surcharge increases early in the year and in the third quarter was charging customers 3.25 percent on top of their freight bills, but A&B spokesman John Kelley said today that fuel cost increases in the third quarter were still ahead of the surcharge.

Matson has since raised the fuel surcharge by one more percentage point and it is now 4.25 percent.

Matson's third-quarter operating profit was $26.1 million, up 19.2 percent from $21.9 million in the 1999 quarter. Matson's third-quarter revenues of $211.2 million, about 77 percent of A&B's total, were up 13.9 percent from the previous year's $185.5 million.

Property leasing had an operating profit of $7.5 million in the latest quarter, up 13.6 percent from a year-earlier $6.6 million, and property sales profits of $5.5 million were up 243.8 percent from $1.6 million.

A&B's smallest sector, food products, had a 39.6 percent drop in operating earnings, to $2.9 million in the latest period from a year-earlier $4.8 million. The company said sugar prices were at historic lows and production was hurt by drought conditions on Maui, where A&B has its 37,000-acre Hawaiian Commercial & Sugar Co. plantation.

Doane said, however, that U.S. raw sugar prices, which have been a drag on the profitability of A&B's food products business, have begun to recover.

"All in all, the third quarter was a good one," he said.