Matson parent sees lower profit
Matson Navigation, Alexander & Baldwin’s ocean transportation arm, had fourth quarter operating profit of $13.5 million, down 36 percent from the year-earlier period.
Revenue for the quarter slipped 2 percent to $234.8 million. The number of containers it carried from Hawaii was down 5 percent, but automobiles carried rose 35 percent. Matson operates ships between the U.S. West Coast, Hawaii, Guam and China.
Matson added a car deck to one of its ships, the Mokihana. Work on the deck was done in China and Alabama and completed in December 2007, after the Coast Guard ruled work in China would not violate the so-called “second proviso” of the Jones Act, which prohibits vessels “rebuilt” abroad from engaging in the coastwise trade.
The Shipbuilders Council of America and Pasha Hawaii Transport Lines, which operates a roll-on/roll-off ship between the mainland and Hawaii challenged the Coast Guard’s decision to allow the Mokihana to continue to operate in the Jones Act trade, but a judge ruled in December 2009 in favor of the Coast Guard and Matson.
Matson also saw a 22 percent increase in container volumes in its service to China and a 9 percent increase in its Guam business.
Matson said it had higher vessel operating expenses related to the failure of a rudder on the Mokihana during the quarter. The company said that led to higher vessel repair expense and the need to temporarily add a 10th ship to the fleet to ensure that schedule and service integrity was maintained.
Matson said its logistic services business had fourth quarter intermodal revenue of $48.5 million, down 18 percent, and highway revenue of $33.6 million, also down 18 percent. Operating profit for the logistic services business was $1.2 million, off 71 percent.
It said logistics business revenue fell because of “lower rates, which were driven largely by lower fuel surcharges and competitive pricing pressures, and lower intermodal volume. Intermodal volume decreased 5 percent, with a significant reduction in international intermodal volume related to lower U.S. import demand and a shift of carrier business directly to the rail providers.”
Overall, Alexander & Baldwin said it had fourth quarter net profit of $20.1 million, compared to $23.9 million in the same 2008 period.
Fourth quarter revenue was $365 million, compared to revenue of $395.4 million in the same period of 2008.
“Fourth quarter 2009 operating profit benefited from strong property sales and a non-operating gain in agribusiness, which offset the impacts on ocean transportation segment results from rudder damage to one of the company’s vessels,” said Stan Kuriyama, president and chief executive officer of A&B.