Matson Navigation Co. saw a near doubling of its business between the U.S. West Coast and Guam in the first quarter of 2012 when compared to 2011 because of the decision by Horizon Lines to withdraw from the market.
The Oakland-based company moved 6,400 containers in the first quarter of 2012, compared to 3,300 in the same 2011 period.
Alexander and Baldwin, the parent of Matson, reported on Wednesday a profit of $3.8 million in the first quarter ending March 31, compared to $5.2 million in the same 2011 period. Revenue was $405 million in the quarter, compared to $373.3 million in the same 2010 period.
A&B made the announcement days before its shareholders meet this Friday to vote on a proposal that will facilitate the spin off of Matson from A&B's other real estate and agricultural businesses into a separately traded public company. It said its results in the first quarter reflect costs associated with plans to divide the company in half, as well as losses related to the shutdown of Matson's CLX2 service between the U.S. West Coast and China. Without those expenses and losses, net income for the first quarter would have been $7.2 million, compared to $13.2 million in the first quarter of 2011.
If the CLX2 revenue and losses are ignored, Matson had ocean transportation revenue of $279.7 million in the first quarter, 17 percent more than the $238.4 million recorded in the first quarter of 2010. Operating profit was $8.1 million, 50 percent more than the $5.4 million in the first quarter of 2011, again if the CLX2 losses are ignored. The increase in Guam business and a 6 percent increase in container volumes from its remaining business from China offset a 4 percent decline in Hawaii container volume to 32,500 in the first quarter of 2012 and a 6 percent decline in automobile volumes to 16,900 in the first quarter of 2012.
In the third quarter of 2011, the Matson finalized a decision to terminate Matson’s CLX2 service, due to the longer-term outlook for sustained high fuel prices and increasingly volatile transpacific rates.
In its most recent 10-Q filing with the Securities and Exchanges Commission, A&B said "overall, including charges incurred through March 31, 2012, the company expects to incur total cash and non-cash charges of approximately $15.5 million by September 30, 2012 related to vessel charter obligations, the off-hiring or disposal of containers, and the termination of an office lease and employees."
Matson said its logistics services business had revenue of $52.6 million in the first quarter, compared to $53.2 million in the first quarter of 2011. Operating profit for logistics fell to $300,000 from $1.6 million. - Chris Dupin