Alexander & Baldwin, parent company of Matson Navigation Co., said a “continued weak transpacific operating environment” was reflected in sharply lower operating profit for its ocean transportation operations.
A&B, which is also involved in real estate and agriculture, said ocean transportation operating profit was $14 million in the fourth quarter ending Dec. 31, 51 percent below the same period a year earlier. Revenue was $282.6 million for the fourth quarter, up 5 percent from the same 2010 period.
For the full-year 2011, ocean transportation operating profit was $81.2 million, down 32 percent from 2010. Revenue was $1.08 billion in 2011, up 6 percent.
The company eliminated its CLX2 service, one of its two transpacific services between the United States and China, in the third quarter.
“Container volume in Matson’s Hawaii trade lane has benefited from a gradually improving Hawaii economy,” said Stanley M. Kuriyama, A&B’s president and chief executive officer, in a statement. “In contrast, a difficult transpacific container freight rate environment — one in which carriers incurred heavy losses in 2011 — significantly impacted the performance of our CLX1 service; however, even under these adverse conditions, CLX1’s double head haul and premium service allowed it to remain profitable.”
The CLX-1 service brings cargo from the U.S. West Coast to Hawaii and Guam on westbound sailings, and from China to the U.S. West Coast on eastbound sailings.
Kuriyama said weakness in the transpacific trade lane also negatively affected volume for the company’s joint terminal venture with SSA Terminals.
The company said its logistics business posted an operating loss of $600,000 in the fourth quarter of 2011, compared to an operating profit of $2 million during the same period in 2010.
Logistics revenue for the fourth quarter of 2011 was $92.8 million, down 5 percent from the fourth quarter of 2010. It said this reflected lower highway and international intermodal volume, and lower demand at its West Coast warehousing facilities.
For the full-year 2011, logistics operating profit was $5 million, 31 percent less than in 2010. Operating profit decreased despite increased intermodal volume due to lower warehousing results from lower demand, a decrease in highway results due to lower volume, and a large move for the Department of Defense in 2010.
Logistics revenue for 2011 was $234.5 million, 15 percent more than the prior year.
A&B said its previously announced plan to spin off its shipping and logistics business into a separate company advanced, with the company on Monday entering an agreement and plan of merger to reorganize itself as a holding company incorporated in Hawaii. It said the holding company structure will help facilitate the separation. Existing shareholders will get shares in both of the new companies.
A&B’s plan to divide itself into two companies still needs shareholder approval, which will happen at its annual meeting later this year. — Chris Dupin
Matson profits hurt by weak transpacific
