STAR-BULLETIN / OCTOBER 2002
Ocean transportation revenue at Alexander & Baldwin grew 19.8 percent during the first quarter.
Shipping, leases Alexander & Baldwin Inc., meeting its own improved expectations, posted a 79.6 percent jump in first-quarter earnings as ocean-shipping volume and real estate activity remained strong.
lift A&B earnings
The parent of Matson Navigation
saw profits jump 79.6 percentBy Tim Ruel
truel@starbulletin.com
Meanwhile, the company's shipping subsidiary Matson Navigation Co. said today it is reducing its fuel surcharge in Hawaii and Guam to 6.5 percent from 7.5 percent, starting May 4, because of dropping fuel prices. Matson had raised the surcharge in March from 6 percent. The company said it will continue to watch fuel costs and adjust the surcharge accordingly.
A&B said its net income in the quarter was $17.6 million, or 43 cents a share, compared with $9.8 million, or 24 cents a share, a year ago. Revenue rose 16.3 percent to $273.4 million from $235 million.
Matson had expected the results to be significantly better than the depressed results of the previous year because shipping in the first quarter of 2002 was hurt by the effects of the Sept. 11, 2001, attacks.
"The winding-down of military activity in Iraq creates more favorable conditions for tourism, a key driver of Hawaii's economy," said Allen Doane, president and chief executive officer of A&B. "Asian tourism, however, has been beset by a number of challenges that will continue to dampen Japanese visitation to Hawaii." Japanese visitor arrivals in April have fallen 29 percent from a year ago, according to preliminary state data as of yesterday. "Current indicators suggest a soft second quarter in Hawaii tourism, with strengthening occurring in the third quarter," Doane said.
Matson's revenue from ocean transportation rose 19.8 percent to $186.1 million from $155.3 million last year, helping to boost profit five-fold to $12.1 million from $2.4 million. "Matson's freight volumes were strong, its pricing environment stable and productivity improvements had a positive impact at the Sand Island terminal in Honolulu," Doane said.
Container shipments rose 9 percent in the first quarter, while automobile shipments jumped 53 percent on improved demand. Vessel operating costs rose because of the late 2002 reintroduction of an eighth vessel serving Hawaii.
Property sales were down 55 percent to $16.7 million from $37.3 million last year, when real estate subsidiary A&B Properties Inc. sold a seven-building distribution complex in a suburban Dallas industrial park.
A&B said today it has signed a letter of intent to invest $40 million in equity and debt in a proposed luxury residential condominium development, Hokua at 1288 Ala Moana. A 40-story, $210 million tower, Hokua is a project of the MacNaughton and Kobayashi groups. Sales contracts have been signed for 227 of the 247 residential units, and construction is scheduled to start later this year and finish by late 2005. A&B said it would be a joint development and financial partner, pending project financing and partnership documentation.
Near the end of the quarter, an A&B unit bought the 1100 Alakea office building in Honolulu for $20 million, marking the first major downtown real estate transaction since late 2001. The building's Japanese developer paid $33 million in 1989 for the 26,352 square feet of land under the property. A&B also bought a Kahului, Maui, shopping center for $9.2 million shortly before the quarter ended.
A&B's revenue from property leasing increased 7.3 percent to $19.1 million from $17.8 million, improving leasing profitability to $8.6 million from $8.2 million.
Reduced production of raw sugar and higher operating costs led to 10 percent decreases in revenue and profits from food products, A&B said. Food product revenue fell to $14.9 million from $16.6 million, while operating profit fell to $1.9 million from $2.1 million.
Sugar took a hit from wet harvesting conditions and a late start on Maui after off-season factory maintenance, A&B said. It owns Hawaiian Commercial & Sugar Co. and Kauai Coffee Co.
A&B's stock, traded on the Nasdaq exchange, fell 6 cents today to $26.65.
Star-Bulletin reporter Dave Segal contributed to this report.
Alexander & Baldwin Inc.
