Barnwell earnings show decline of 52 percent
Barnwell Industries Inc., a Honolulu-based oil exploration company, said its net earnings fell 52 percent in the first three months of 2001 compared with the same period a year ago, but added the drop was due only to a property sale last year that artificially inflated earnings.
Excluding the impact from the property sale, net earnings actually would have shown an increase of about $900,000 in the three months ended March 31 over the year-earlier period because of higher natural gas prices, said Barnwell Chairman and Chief Executive Morton H. Kinzler.
Barnwell reported net earnings of $1.4 million, or $1.02 per share diluted, in the three months ended March 31, compared with $2.67 million, or $1.93 per share diluted, for the same period a year earlier. Revenues were $7.08 million for the period, compared with $11.41 million a year earlier.
"Revenues and net earnings for the three and six months ended March 31, 2001, were generated only by our oil and gas and contract drilling segments, while last year's ... revenues and net earnings also included revenues and net earnings due to the receipt of option proceeds for the sale of rights to develop residential parcels within the Four Seasons Resort Hualalai at Historic Ka'upulehu," Kinzler said.
Early last year, Barnwell sold 20 percent of the residential parcels it controls at the Four Seasons Resort, said Russell Gifford, Barnwell executive vice president and chief financial officer. The rights were sold to Hualalai Development Corp., the developer of the resort and a subsidiary of Kajima Corp. of Japan. Hualalai Development holds options to buy the remaining 80 percent of the residential property rights and must exercise half those options by April 30, 2003, or lose its preferential position in line for getting the rights, Gifford said.
Barnwell also took a step last month to increase its stake in the unsold residential property rights. Barnwell paid $5 million for an additional 27.5 percent of Ka'upulehu Developments, which holds the unsold property rights, increasing its ownership of Ka'upulehu from 50.1 percent to 77.6 percent, Gifford said.