Matson sees sharp increase in first quarter profits

The ocean carrier expects to close on its acquisition of Horizon Line’s Alaska business in second quarter.

   Matson reported profits of $25 million in the first quarter that ended March 31, 2015 compared with $3.4 million in the same quarter the previous year.
   Revenues in the first quarter of 2015 were $398.2 million compared with $392.5 million reported for the first quarter 2014.
   Matt Cox, Matson’s president and chief executive officer said of the results, “Performance improved across all lines of business, led by continued levels of exceptional demand for our expedited China service, modest yield improvements in Hawaii and Guam, and further improvements in Logistics operations and SSAT. In addition, lower bunker fuel prices positively impacted our results, primarily due to timing differences as fuel surcharge collections outpaced fuel expenditures.”
   “Our businesses are performing well and continue to generate substantial cash flow that, combined with our strong balance sheet, provides ample capacity to close our pending Alaska acquisition, fund new vessel construction commitments, and comfortably sustain our dividend,” said Cox.
   Matson plans to close on its acquisition of Horizon Line’s Alaska business in the second quarter of 2015. Horizon is being broken up, and is selling its Hawaii service to Pasha. That deal is also expected to close this quarter.
   Pasha is also adding a new container and roll-on/roll-off ship that will enter the trade between Hawaii and the U.S. mainland later this week.
   Cox noted while Matson is “encouraged by our prospects in Hawaii, and in a strengthening broader economy that will produce volume growth in our Jones Act markets and in logistics,” the new ship being introduced by Pasha will add new vessel capacity. “We expect our Hawaii container volume for the year to be relatively flat with 2014.”
   A string of ships that Matson operates to Hawaii and Guam continues to China and offers an expedited service from China. Cox said that service is expected to remain in high demand. He noted the loop “operates from a dedicated terminal in Long Beach as part of our joint venture with SSAT.”
   “We run a smaller and simpler operation that allows us to manage port congestion more effectively, while maintaining our industry-leading same day or next day cargo availability,.” Cox added. “We recently concluded our annual contracting cycle and as expected I’m pleased to report we achieved healthy increases in our contracted rates.”