Matson first half revenues fall despite Q2 bump

For the six months ended June 30, Matson reported net income of $31 million, or $0.72 per diluted share, compared with $36.1 million, or $0.83 per diluted share, in the same 2016 period, according to the ocean carrier’s most recent financial statements.    Honolulu-based ocean carrier Matson Inc. on July 31 reported net income of $24 million, or $0.55 per diluted share, for the second quarter of 2017, a $6 million improvement over the $18 million ($0.42 per diluted share) recorded in the same quarter last year, according to the company’s most recent financial statements.
   Consolidated revenue for the quarter stood at $512.5 million, compared with $467.7 million reported for the second quarter 2016. Ocean transportation revenues increased 5.9 percent ($21.8 million).
   For the six months ended June 30, Matson reported net income of $31 million ($0.72 per diluted share), compared with $36.1 million ($0.83 per diluted share) in the first half of 2016. Consolidated revenue for the six-month period jumped from $921.9 million in 2016 to $986.9 million this year.
   Matson’s ocean transportation revenue increased 3.5 percent ($25.7 million) year-over-year during the first half. This increase was primarily due to higher fuel surcharge revenue, higher container volume in China, and higher average freight rates in China and Hawaii, partially offset by lower volume in Hawaii, Guam and Alaska, the company said.
   During the first half, Hawaii container volumes (measured in FEUs) fell 4.1 percent year-over-year, primarily due to the absence of competitive volume gains in the prior year; Alaska volumes decreased 2.6 percent, attributable to the continued energy sector related economic contraction; China volumes shot up 18.8 percent due to stronger demand for the company’s expedited service and additional sailings during the first half 2017; and Guam volumes slipped 10.7 percent due to competitive losses, Matson said.
   “Matson achieved better than expected second quarter results, buoyed by stronger demand for our expedited China service, the timing of fuel surcharge collections, higher lift volumes at our SSAT terminal joint venture, and improved performance in Logistics,” Matt Cox, Matson’s chairman and chief executive officer said in a statement.
   “However, these gains were moderated by lower construction related cargo to Hawaii as the boom of high-rise condominium developments in Honolulu has begun to ebb and other real estate construction activity has yet to offset that decline,” he added.
   The company said it expects its the third quarter 2017 ocean transportation operating income to be moderately higher than the $42.7 million achieved in the third quarter 2016, but that its ocean transportation operating income for the full year 2017 to be lower than the $141.3 million achieved in 2016.  
   Regarding operating income for the company’s Matson Logistics segment, Matson said it expects Q3 2017 Logistics operating income to be about double the $3.5 million achieved in Q3 2016.
   For the full year 2017, the company said it expects $20 million in Logistics operating income, up significantly from the 2016 level of $11.9 million, primarily due to the inclusion of Span Alaska’s freight forwarding business for a full year. Matson Logistics acquired Span Alaska in August 2016.