STAR-BULLETIN FILE
Matson's containership M.V. Manukai was launched last year. The company's annual revenue topped $1 billion for the first time last year in a bright earnings report from parent Alexander & Baldwin Inc.
Matson’s revenue
exceeds $1 billionParent A&B has 8 percent
growth in fourth-quarter
earnings to $18.8 million
Alexander & Baldwin Inc., capping off a year that saw its ocean freight subsidiary exceed $1 billion in revenues for the first time, increased its net income 8 percent in the final quarter of 2003.
The parent of Matson Navigation Co. said yesterday that earnings last quarter were $18.8 million, or 44 cents a share, compared with $17.4 million, or 43 cents a share, a year earlier. Revenue rose 16.4 percent to $327.7 million from $281.6 million.
For 2003, A&B's net income climbed 39.7 percent to $81.3 million, or $1.95 a share, from $58.2 million, or $1.42 a share. Revenue rose 13.3 percent to $1.2 billion from $1.1 billion.
"The 2003 fourth quarter rounded out a good year for A&B, with especially strong performance at both Matson and A&B Properties," said Allen Doane, president and chief executive officer of A&B.
"As we look toward the company's performance in 2004, improved service levels at Matson, benefits from the new real estate investments and the improving economic outlook for Hawaii have the prospect, in combination, to result in continuing the growth of our earnings, although not at the pace achieved in 2003."
Matson's operating profit from ocean transportation more than tripled last quarter to $32.4 million from $9.2 million, benefiting from a one-time settlement gain of $16.7 million resulting from the conversion to a multiemployer pension plan -- with two other marine terminal operators -- from a single-employer pension plan. Higher freight and automobile volumes of 15 percent and 29 percent, respectively, also contributed to the increase in operating profit. Matson's revenue increased 14 percent to $119.3 million from $174.7 million.
The subsidiary also began a roll-on/roll-off auto service in the fourth quarter that added capacity to its fleet through the operation of a chartered vessel and modifications to another vessel.
"Smooth operations also continue for Matson's new containership, M.V. Manukai, which made its inaugural voyage in the third quarter," Doane said.
For the year, Matson's ocean transportation operating profit more than doubled to $92.8 million from $42.4 million. The big increase was skewed by the one-time pension settlement gain of 2003 and the impact in 2002 of labor disruptions on the West Coast. Revenue for the year rose 13 percent to $776.3 million from $686.9 million.
Matson Integrated Logistics Inc., the logistics services portion of Matson Navigation Co., posted record revenue in the quarter of $68.5 million, a 31 percent gain from $52.4 million a year ago. Operating profit in the quarter doubled to $1.4 million from $700,000. Matson Integrated also invested in its future by acquiring a truck brokerage company in December, TransAmerica Transportation Services Inc., which handles about 50,000 shipments annually.
The combination of revenue from Matson Navigation's ocean transportation and its wholly owned subsidiary, Matson Integrated, came to just more than $1 billion.
A&B Properties' sales and leasing results were a mixed picture in the fourth quarter after a year in which operating profit rose 12 percent in leasing and 23 percent in sales.
For the quarter, the real estate sales unit's operating profit fell 48 percent to $2.7 million from $5.2 million and revenue dropped 68 percent to $10.3 million from $31.8 million. Among the more prominent sales last quarter were two lots at Maui Business Park, eight full floors at Alakea Corporate Tower in Honolulu, 37 homes at the Kai Lani joint venture on Oahu and six at the HoloHolo Ku joint venture on the Big Island. The top acquisition in the quarter was a $67 million deal to buy 270 acres of entitled land at the Wailea resort. The deal closed in October.
A&B's leasing division unit increased operating profit 17 percent in the quarter to $9.8 million from $8.4 million and boosted revenue 6 percent to $20.3 million from $19.1 million. Occupancy rates remained at 94 percent on the mainland from the previous year's quarter and edged up to 91 percent in Hawaii from 90 percent a year ago.
Food products, which represents the parent company's smallest division, saw operating profit slump 91 percent to $500,000 from $5.8 million and revenue slip 13 percent to $29.3 million from $33.5 million as sugar production fell 19 percent to 49,500 tons from 61,100 tons.
Separately, A&B reduced the carrying value of its investment in C&H Sugar Co. in Crockett, Calif., near the San Francisco Bay Area, to $3.8 million from $11.5 million. By doing so, A&B took a $7.7 million pretax charge, which had the effect of lowering the company's earnings.
A&B also declared a first-quarter dividend of 22.5 cents a share, payable March 4 to shareholders of record Feb. 19. A&B's dividend, which has now remained at the same level for 25 straight quarters, offers a 2.7 percent annual yield.
The company also announced three executive promotions, including the position of chief financial officer, which will be effective Feb. 9.
Christopher Benjamin will be promoted to vice president and CFO from his present position of vice president of corporate development and planning. Thomas Wellman will be promoted to vice president, controller and treasurer. He currently is controller and assistant treasurer and has held a variety of financial management positions with A&B and its subsidiaries. Charles Loomis will be promoted to associate general counsel and will retain his position of vice president with A&B Properties.
