Shopping center sales
catapult MLP’s profitsNapili Plaza and Queen Kaahumanu
Center deals pave the way to
quarterly earnings of $9.4 million
Coming off a dismal past year, Maui Land & Pineapple Co. reported third-quarter earnings yesterday of $9.4 million that was largely due to the sale of two shopping centers.
MLP's revenues rose 37.6 percent to $52.6 million from $38.2 million a year ago. The company's net income, which came out to $1.31 a share, was a sharp turnaround from a loss of $2.2 million, or a loss of 31 cents a share, in the year-ago period.
Improvements during MLP's third quarter were primarily due to the sale of the two centers and increased revenues from pineapple sales, said MLP Chief Financial Officer Paul Meyer.
"It was very nice to produce a substantial net income for the third quarter and for the year to date ($4.8 million), although it should be noted that the net income includes $10.5 million attributable to the sale of the Napili Plaza and the Queen Kaahumanu Center," Meyer said. "Our strategic plans are in place, and we are working to increase the volume of fresh whole pineapple that we sell and reduce our dependency on canned pineapple."
The company, which lost $4.7 million in the first half of 2003 on the heels of a $5.7 million loss in 2002, has undergone managerial and operational changes. MLP spent much of the quarter searching for a replacement for Gary Gifford, who retired as president and chief executive officer in May before hiring David C. Cole, who began work Oct. 15.
MLP also has been shedding the bulk of its commercial property. In August, the company sold Napili Plaza, a 45,200-square-foot neighborhood retail center in West Maui. In September, MLP also sold the Queen Kaahumanu Center, a 570,000-square-foot shopping complex in Kahului. The sale resulted in a $10.5 million gain, which was included in the company's third-quarter results, Meyer said.
Winding up the loose ends of the transactions could take as long as 13 months, Meyer said.
"There will be some continuing impact on the company, hopefully positive," Meyer said.
During the third quarter, MLP's pineapple operations, which in recent years had been a drag on the company, experienced an upswing with an operating profit of $225,000 compared with an operating loss of $2.2 million a year ago. Pineapple revenue rose 8 percent due to increased volume and higher sales prices from MLP's Costa Rica-based subsidiary, Royal Coast Tropical Fruit Co. Inc. MLP also cited increased sales volume of Hawaiian Gold, the fresh whole pineapple it grows on Maui.
Meyer said the company started expanding its production of Hawaiian Gold in 1998 and is just beginning to see the fruits of that labor.
"This extra sweet variety is much sweeter than traditional pineapple and it has a wonderful golden color, flavor and aroma. It's a much more desirable product and achieves a premium price," Meyer said, adding that profit margins are higher for fresh whole pineapple than canned.
Although no employees were laid off from the pineapple division in the third quarter, Meyer said future layoffs could occur as the company continues to tweak that division by putting more emphasis on fresh pineapple than on canned. About 10 employees were laid off from that division in the first half of the year. MLP had 1,870 employees companywide at the end of 2002.
Kapalua Resort's operating loss shrunk to $152,000 from a loss of $207,000 in the third quarter of 2002 as a shrinking inventory of available products resulted in fewer sales. Revenues fell 6 percent to just under $11 million from $11.6 million a year ago.
However, revenues from the resort's recreation and retail operations of Kapalua Villas and Kapalua Realty improved in the third quarter from a year ago.
The commercial and property division reported $15.9 million in revenues and a $15.3 million operating profit for the third quarter of 2003 as compared with revenues of $1.3 million and an operating loss of $340,000 for the same period last year. Higher revenues and improved operating results were due to lot sales at the Kapua Village employee subdivision as well as the sale of Napili Plaza and Queen Kaahumanu Center.
