Shutdown at docks hurts A&B profits
By Andrew Gomes
Advertiser Staff Writer
Last year's West Coast dock shutdown took a toll on profits at Honolulu-based diversified ocean transportation, real estate and agriculture company Alexander & Baldwin Inc., which Thursday reported 2002 net income of $58.2 million.
Earnings were down from 2001 profits of $110.6 million, but primarily because of the company's one-time $77.8 million after-tax gain in 2001 from sales of stock in Pacific Century Financial Corp. and BancWest Corp.
Comparisons of A&B's financial performance between the two years was also skewed by the 9/11 effects on Hawai'i's economy and the dock shutdown that disrupted shipping last year.
But given the anomalies, Allen Doane, A&B president and chief executive officer, said the company came close to increasing profits last year.
Revenue last year totaled $1.09 billion, down 8.4 percent from $1.19 billion in 2001.
On a per-share basis, net income last year was $1.42, compared to $2.73 in 2001. Doane said that excluding the bank stock proceeds as well as one-time asset devaluations in the same year, 2001 per-share earnings were $1.48.
The difference of 6 cents per share, Doane said, shows "how close we came to improvement, even with the burden of the labor disruptions and the economic overhang of 9/11 on the Hawai'i economy in the first half of 2002."
The West Coast dock shutdown late last year created a $12 million pretax hit to the company's ocean transportation subsidiary Matson Navigation Co., according to Doane.
Matson reported operating profits of $42.4 million, down 30 percent from $60.7 million in 2001.
Revenue for the unit was slightly higher last year at $686.9 million, a 1 percent increase over $682.3 million in 2001. The rise was due to rate changes and differences in commodities shipped. Container volume was up 2 percent while automobile volume fell 2 percent.
Matson's intermodal business, which arranges truck and rail service transportation, reported operating profits of $3.1 million last year, double the $1.5 million for 2001. Revenue from that business totaled $195.1 million and $122 million for the same respective periods.
In A&B's real estate division last year, property leasing operating profits totaled $32.9 million, down 4 percent from $34.1 million in 2001.
Operating profits from property sales were up 8 percent to $19.4 million, compared with $17.9 million in 2001. Total real estate sales revenue was up 4 percent to $93 million, compared with $89.2 million in the same year-over-year period.
A&B's food segment, comprising Hawaiian Commercial & Sugar Co. and Kauai Coffee Co., reported operating profits of $13.8 million last year, up from $5.7 million in 2001 due to increased sugar production and sales, tight cost controls, higher power sales and an asset write-off in 2001.
For the fourth quarter alone, A&B reported net income of $17.3 million, or 43 cents a share, compared with $46.4 million, or $1.15 a share, in the final quarter of 2001, which included the one-time gain of bank stock proceeds equivalent to $1.69 per share.
Doane said the company has taken steps toward trying to increase earnings this year, including implementing a terminal handling surcharge, acquiring Hawai'i real estate and continuing strong operations in the sugar business.
The company also announced it will pay a first-quarter dividend of 22.5 cents per share, payable on March 6 to shareholders of record as of Feb. 13.
Shares of A&B stock traded on the Nasdaq market closed yesterday at $26.24, up 13 cents the day after the company announced its earnings.
A&B shares have traded between $20.50 and $29.25 during the past 52 weeks.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
