A&B quarterly profit sags
By Andrew Gomes
Advertiser Staff Writer
On the heels of losing a bid to buy Kaka‘ako retail center operator Victoria Ward Ltd., Alexander & Baldwin Inc. told analysts today that the company is pursuing more than $40 million in other real estate acquisitions.
“We are quite active looking for some value-driven investments for the company,” said Allen Doane, A&B’s president and chief executive officer, in a conference call with analysts a day after the company released first-quarter earnings.
A&B has a capital spending plan this year of $120 million, $80 million of which is earmarked for real estate activity, Doane said. More than half of the $80 million is for acquisitions as opposed to property development, he added.
Doane said he wasn’t able to identify or comment about properties being sought, but he said A&B is working on “several large projects.”
The company also expects to announce a long-term real estate development project in Hawai‘i with a partner, Doane said without giving details.
Doane explained that the company’s pursuit of Victoria Ward, one of Hawai‘i’s largest landowners, was tripped up by an escalating price that got to a point where A&B felt it would not be a good investment for the company.
Ala Moana Center owner General Growth Properties Inc. made a last-minute bid of $250 million to buy Victoria Ward in a deal that was announced last week and is expected to close by the end of July.
“There is a tendency to sometimes chase things beyond a point where they make good economic sense, so we pushed away from the table,” Doane said.
Other planned capital expenditures for A&B include $25 million to $30 million at ocean cargo transportation subsidiary Matson Navigation Co., and $10 million in A&B’s agribusiness ventures.
The anticipated spending at Matson does not include money for new ships, although Doane said the company is close to making a decision on whether to order construction of two, roughly $100 million container vessels for Matson’s Hawai‘i service.
“We’re not quite there yet,” Doane said, “But we’re relatively close to a decision.”
Yesterday, A&B announced first-quarter net income was down 56 percent, to $9.8 million, compared with $22.4 million during the first three months of last year.
Shares of A&B stock closed today at $28.19, down nearly 32 cents, or 1 percent.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
