A&B off to 'solid' start this year
by Andrew Gomes
Advertiser Staff Writer
Selling Mililani Shopping Center in January helped Alexander & Baldwin Inc. boost its net income to $17.3 million in the first quarter, from $3 million in the same quarter last year.
Honolulu-based A&B said improvements in its ocean transportation business as well as prior operating cost cuts also contributed to what it referred to as a "solid" financial start to the year.
Revenue totaled $345 million in the first quarter, up from $315.3 million a year earlier.
"We are pleased with the company's overall positive performance in the quarter," said Stan Kuriyama, A&B's president and chief executive officer. "All in all, we are encouraged by what we see both inside and outside the company."
The price of A&B stock closed down 64 cents at $36.26 a share yesterday before the earnings announcement, though it remains near a 52-week high of $36.95 set April 29.
On a per share basis, first-quarter net income equated to 42 cents compared with 7 cents a year earlier.
A&B's biggest division, ocean transportation driven by subsidiary Matson Navigation Co., had mostly positive results led by a 51 percent gain in Hawai'i automobile shipments. Container shipping volume to and from Hawai'i was down 3 percent. Matson's China service ran near capacity to produce a 38 percent increase in container volume.
The company said the big increase in auto shipments was from rental car company orders. The Hawai'i container volume decline was largely from reduced construction material imports and agricultural product exports, though about half of the decline reflected a schedule change that advanced the delivery of about 400 containers from January to December.
Overall, A&B said its ocean transportation business had an operating profit of $10.4 million in the first quarter, compared with a $500,000 operating loss a year earlier that was heavily influenced by a $6 million charge associated with Matson job cuts.
Looking ahead to the rest of the year, A&B said it doesn't expect significant growth in Hawai'i container shipments, but it does expect a modest uptick in service to Guam late in the year because of military projects. Rates and demand are expected to remain strong in Matson's China service.
In real estate sales, A&B posted an operating profit of $21.4 million in the first quarter, up from $5.6 million a year earlier.
Much of the gain was from selling Mililani Shopping Center to a California company for $50.3 million. The sale came eight years after A&B bought the property for $30 million.
A few other transactions pushed total revenue from real estate sales to $60.3 million during the quarter, which was up from $25.2 million a year earlier.
In A&B's most challenged division, agribusiness, a first-quarter operating loss of $1.1 million was an improvement from a $1.9 million operating loss a year earlier. Revenue was down 20 percent to $14.2 million from $17.7 million.