Ocean shipping and logistics services provider Matson saw improved third quarter profits as higher China and domestic freight rates offset mixed container volumes.
Operating income was $227 million for the three months ended Sept. 30, up from $118 million in the year-ago quarter, the Honolulu-based carrier said in an earnings release. Revenue from ocean transportation increased to $799 million from $669 million.
Earnings per share was $5.89 compared with $3.40 y/y. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $289.4 million against $175.1 million.
Operating income margin improved to $28.4% from 17.7% in third quarter 2023.
China traffic underpinned significantly higher y/y freight rates with strong peak-season demand, along with higher rates in domestic trade lanes.
“A resilient U.S. economy and a stable consumer demand environment coupled with tighter supply chain conditions supported these elevated freight rates,” said Chairman and Chief Executive Matthew Cox in the release. “In the near term, we expect freight rates to moderate with normal seasonality, but remain elevated as long as the underlying economic, supply chain, and geopolitical conditions persist.”
Gains were seen in container volumes to and from China, up 2.6% to 40,000 forty foot equivalent units from 39,000 FEUs on two additional sailings, and Alaska, up 1.4% to 22,000 FEUs from 21,900 FEUs on higher retail-related demand. Hawai’i volume declined 2.2% to 36,200 FEUs from 37,000 FEUs on lower general demand. Hawai’i automobile shipments slowed 16.8% to 8,400 units from 10,100 units in 2023.
Matson expects Hawai’i container volume for all of 2024 to be modestly lower than 2023 primarily due to stalled tourism; continued challenges in the state’s population growth, and lower discretionary income as a result of higher inflation and interest rates.
Matson revised guidance, saying it expects total fourth-quarter operating income to be “meaningfully higher” than $75.3 million in the 2023 fourth quarter.
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