Alexander & Baldwin Inc.'s operations were already in a downturn before the economic setback caused by the Sept. 11 terrorist attacks on the United States, the company said in reporting a 19.3 percent decline in third-quarter profits.
A&Bs earnings tumble
By Russ Lynch
"Performance for the quarter reflected trends that were in place prior to the events of Sept. 11," said W. Allen Doane, president and chief executive officer.
"The slowing of the U.S. economy and Japan's continued struggle with its economy resulted in softening business conditions in Hawaii and somewhat lower freight volume" for Matson Navigation Co., the mainland-Hawaii freight line that is A&B's biggest subsidiary, Doane said.
Real estate leasing was strong but property sales were down, largely because a big part of the company's sales program was accomplished earlier in the year, he said.
A&B reported a third-quarter net of $17.3 million, or 42 cents a share, compared with a net of $21.4 million, or 53 cents a share, in the third quarter of 2000. Third-quarter revenues were $264.1 million, down 7.6 percent from $285.8 million in 2000.
For the first nine months of 2001, A&B had a net profit of $64.3 million, or $1.58 a share, down 15.4 percent from $76 million, or $1.85 a share, in 2000. Revenues of $834.1 million through nine months were up 3.3 percent from $807.2 million in 2000, but the profit comparison was affected by a special non-operating item in 2000.
Full-year figures will be changed radically by a one-time profit coming from the sale of A&B's shares in BancWest Corp. in the planned acquisition of the First Hawaiian Bank parent by its big French investor, BNP Paribas. That deal is expected to add $1.68 a share to A&B's 2001 earnings, Doane said.
On the operating level, Matson had a working profit of $24.2 million in the latest quarter, down 7 percent from $26.1 million in the third quarter of 2000. The drop was mostly because of lower Hawaii and Guam cargo volume and higher than expected transition costs in refurbishing the Sand Island container yard, the company said.
Matson expects lower cargo in the coming months and A&B will have to spend more on security as a result of the terrorist attacks, Doane said. Tourism also is in a serious decline.
"Although those effects are anticipated to be felt most seriously in the fourth quarter of this year, most forecasters expect that the state's economy will be weak throughout 2002, even as the gradual recovery in visitor count occurs," Doane said in yesterday's earnings announcement.
In the latest quarter, A&B posted a 36 percent decline in its real estate operating profit, to $8.3 million from a year-earlier $12.9 million. Of that, property leasing income profit was up 17 percent at $8.7 million from a year-earlier $7.5 million, but property sales had a small operating loss of $400,000 compared to an operating profit of $5.5 million in the year-earlier period. In the 2000 quarter, A&B's property sales had included a 13-acre parcel acquired by Home Depot.
Higher U.S. sugar prices were offset by a decline in results from A&B's 36 percent holding in California refiner C&H Sugar Co., resulting in a third-quarter operating profit from food products of $1.4 million, less than half the food profit of $2.9 million in the third quarter of 2000.