Matson reports increased Q2 revenue, profit

Carrier expects improved performance on all trade lanes except China and Guam and says its logistics business is booming..    Matson Inc. said it had net income in the second quarter ending June 30 of $32.6 million compared with $24 million in the same 2017 period. Consolidated revenue for the second quarter 2018 was $557.1 million compared with $512.5 million reported for the second quarter 2017.
    Matt Cox, Matson’s chairman and chief executive officer, said in the company’s ocean transportation business, “we continue to expect improvements in each of our core trade lanes with the exception of Guam and China.” Matson’s main services are between the mainland U.S. and Hawaii and Alaska.
   In Guam, he said, the company expects “continued competitive pressure, and in China we continue to expect modestly lower volume coming off an exceptionally strong 2017.”
    Cox said the company is raising the outlook for the year for its logistics business “given the strong trends across all service lines.”
    Matson said container volumes in its Hawaii service in the second quarter were flat year-over-year. It moved about 38,600 TEUs in the second quarter in the Hawaii trade.
    “The Hawaii economy continues to be strong, supported primarily by healthy tourism activity and low unemployment. The company expects volume in 2018 to approximate the level achieved in 2017, reflecting a solid Hawaii economy and stable market share.”
    In its express eastbound transpacific service from China to the U.S., Matson moved about 15,900 TEUs, 1,000 fewer than in the same period last year, “largely due to one less sailing. Matson continued to realize a sizeable rate premium in the second quarter 2018 and achieved average freight rates modestly higher than the second quarter 2017. For 2018, the company expects pricing to approximate the average rate achieved in 2017 and volume to be modestly lower than the level achieved in 2017.”
   In the Guam trade, the company moved about 4,800 TEUs in the second quarter, 600 fewer than in the same 2017 period. Matson is seeing increased competition from APL in the Guam trade. Last month a federal court dismissed Matson’s challenge to a decision by the Maritime Administration to allow APL to put subsidized ships enrolled in the Maritime Security Program into the Guam trade.
   While Matson ships cargo to Guam directly from the U.S. West Coast, APL operates ships between Guam and Japan and Korea, where they can receive transshipped cargo from both the U.S. and other parts of the world.
   In Alaska, the Matson container volume for the second quarter was 17,400 TEUs, 100 fewer than in the same 2017 period. The company attributed that to “lower southbound volume as a result of a delayed start to the seafood season. For 2018, the company expects volume to be modestly higher than the level achieved in 2017 with improvement in northbound volume, partially offset by lower southbound seafood-related volume due to a moderation from the very strong seafood harvest levels in 2017.”
   Matson said it expects full-year operating income for its ocean transportation business to be modestly higher than the operating income of $126.4 million achieved in 2017.
    In the company’s logistics business, the company said revenue in second-quarter 2018 was $150.5 million, 25.6 percent higher than in the same 2017 period and operating income was $9.5 million, 35.7 percent higher than in the second quarter of 2017, largely due to higher contributions from highway brokerage.
   “For the second half of 2018 in logistics, the company expects year-over-year improvement in operating income to approximate the year-over-year increase achieved in the first half of 2018,” which was 53.9 percent.