Company expects improvements in core Hawaii and Alaska trade lanes.
Matson said it had a profit of $14.2 million in the first quarter ending March 31, more than twice the $7 million it earned in the first quarter of 2017.
Consolidated revenue for the first quarter 2018 was $511.4 million, compared with $474.4 million reported for the first quarter 2017.
Matt Cox, Matson’s chairman and chief executive officer, said the company is “off to a good start” with both its ocean transportation and logistics businesses exceeding expectations.
He said the improvement in ocean transportation was primarily the result of lower vessel operating costs, a higher contribution from Matson’s terminal joint venture SSAT, higher volume in its Alaska service and the timing of fuel surcharge collections, partially moderated by lower volume in China and continued competitive pressure in Guam.
In its logistics segment, Cox said the company “saw improved performance in almost all service lines.”
“For 2018, we continue to expect improvements in each of our core trade lanes with the exception of Guam and China,” said Cox. “In Guam, we expect to face continued competitive pressure, and in China we continue to expect modestly lower volume coming off an exceptionally strong 2017. As a result of the first-quarter performance, we now expect Matson’s 2018 operating income to be modestly higher than the level achieved in 2017.”
Matson said revenue from its ocean transportation businesses “increased $9.3 million, or 2.5 percent, during the three months ended March 31, 2018, compared with the three months ended March 31, 2017. This increase was primarily due to higher fuel surcharge revenue and higher volume in Alaska, partially offset by lower volume in China and lower revenue in Guam.”
The company said the Hawaii economy continues to be strong because of “healthy tourism activity and low unemployment,” and said it expects “flat-to-modest volume growth in 2018.”
In the company’s eastbound China-to-U.S. transpacific service, Matson said its container volume in the first quarter was 22.2 percent lower year-over-year largely due to two fewer sailings and lower volume during the Lunar New Year period.
Cox said during a telephone call with analysts that with many transpacific contracts running from May 1 to April 30, the company has completed all but one or two of the 100 or so contracts it has in its China service and is seeing modest increases in rates when compared to last year.
In Guam, where APL also operates, Matson said it faces “a heightened competitive environment and lower volume than the levels achieved in 2017.”
In Alaska, where it competes with TOTE, Matson said container volume for the first quarter 2018 was 10.1 percent higher year-over-year, primarily due to an increase in northbound volume mainly related to the dry-docking of Matson’s vessel and one additional sailing. For the full year, Matson said it expects Alaska volume to be “modestly higher” in northbound volumes this year when compared to 2017, partially offset by lower southbound seafood-related volume.
Matson said its logistics revenue “increased $27.7 million, or 26.5 percent, during the three months ended March 31, 2018, compared with the three months ended March 31, 2017. This increase was primarily due to higher highway and intermodal brokerage revenue.”
Matson ‘off to a good start’ in 2018
