Matson bucks market trend, posts ‘best year’ in company history

Despite a down year in ocean shipping markets, profits at Hawaii-based Matson jumped 46 percent year-over-year to $103 million in 2015 following the carrier’s expansion into the Alaska trade.    Matson, Inc. posted a profit of $103 million in 2015, nearly 46 percent more than the $70.8 million it earned in 2014, according to the ocean carrier’s most recent financial statements.
   Total operating revenues for the full year in 2015 stood at nearly $1.89 billion, compared with $1.71 billion in 2014.
    In the fourth quarter 2015, company profits fell slightly, from $27.8 million in the fourth quarter of 2014 to $26.6 million in the most recent quarter. Total operating revenues in the fourth quarter of 2015 stood at $494.8 million compared with $443.5 million in the same 2014 period.
   “2015 was an exceptional year for Matson,” President and Chief Executive Officer Matt Cox said of the results. “Financially, it was the best year in our history.”
   Cox said Matson “substantially grew” its ocean business through the company’s acquisition of Horizon Lines’ Alaska service last year and “reinforced our position as the service leader in Hawaii, Guam, China and Micronesia.”
   “In 2016, we expect to continue to deliver strong operating results, although modestly lower than the record level achieved in 2015,” he said.
   Last year, Matson carried 149,500 containers between Hawaii and mainland United States, 8 percent more than in 2014. It also moved 70,000 automobiles, 0.8 percent fewer than in 2014.
   The company “achieved meaningful volume gains as it deployed additional vessels in response to a Pasha’s service reconfiguration” when Pasha discontinued Tacoma calls after taking over Horizon’s service to Hawaii last year, Matson said.
   Matson “believes that the Hawaii economy remains healthy and expects the continued progress of the construction cycle in urban Honolulu to generate modest volume growth,” it added. “As a result, for the full year 2016, the company expects its Hawaii container volume to be moderately higher than 2015.”
   In October 2015, construction began at Philly Shipyard on two 3,600-TEU containerships Matson is building for the Hawaii trade that are expected to be delivered in the third quarter of 2018 and first quarter of 2019, respectively. The company is evaluating whether to order two additional new vessels to complete renewal of its Hawaii fleet.
   In the trade between Alaska and the mainland, where Matson took over Horizon’s business on May 29 last year, Matson carried 14,200 containers on the routes between Tacoma and Anchorage, Kodiak and Dutch Harbor in 2015. Matson moved less cargo than Horizon in 2014, and Cox indicated this was, in part, because Matson decided not to continue Horizon’s practice of seeking low rated cargo that moves on barge during the slack season.
   In the coming year, Matson expects modestly lower volumes, in part because of the effect of lower oil prices on the Alaska economy.
   Like much of the ocean shipping industry, Matson’s service from China is being affected by overcapacity, and the company said it anticipates significantly lower freight rates in 2016 than in 2015.
   In the U.S. mainland to Guam trade, the company noted that APL has started a competing service and, as a result, it expects some competitive volume losses this year.
   Matson has a joint container terminal venture in the Port of Oakland with SSA, which it said should benefit from the recent decision by Ports America and TIL Group to close their terminal in Oakland.
   The company’s third party logistics division, Matson Logistics, saw declining revenues and operating income last year, but the company said it anticipates a modest increase in operating income in 2016.