Matson increases profits from shipping, logistics

Matson increases profits from shipping, logistics    Alexander & Baldwin group’s container shipping and logistics activities increased group profits substantially last year, but with mixed fourth quarter results.
   Matson’s U.S. Jones Act ocean transportation arm saw its fourth quarter operating profit fall 23 percent to $25.3 million. Revenue from this segment rose 16 percent to $230.5 million, with strong increases in Hawaii automobile and container volumes. The decrease in fourth quarter profit was primarily the result of the non-recurrence of a $16.7 million pension conversion gain that had been recorded in the fourth quarter of 2003.
   “During the fourth quarter of 2004, cargo volume was strong but Matson operated two additional ships for most of the quarter to help meet that demand and to offset the effects of shoreside labor shortages in Southern California ports,” Alexander & Baldwin said.
   Matson’s logistics activities recorded an improved fourth quarter operating profit of $3.1 million, up from $1 million a year earlier,    and a 60-percent jump in revenue to $109.8 million. A 40-percent increase in units handled in the quarter was due an acquisition in late 2003 and unit growth in virtually all segments of the business — domestic, international, highway and air freight.
   For the year, both the ocean transportation and logistics businesses improved their operating profits.
   Matson’ shipping revenue rose 10 percent to $850.1 million in 2004 from $776.3 million in 2003. Operating profit from ocean transportation increased from $93.2 million in 2003 to $108.3 million last year, representing 13 percent of revenue. The revenue increase came from higher Hawaii cargo volume, improved yields and cargo mix, increases in the fuel surcharge and vessel charters.
   Matson’s logistics business doubled its operating profit to $8.9 million in 2004 from $4.3 million in 2003. Revenue from this segment jumped 59 percent in 2004 to $376.9 million.
   The fast growing logistics business accounted for 31 percent of Matson’s combined $1.2 billion shipping and logistics revenue in 2004, up from 23 percent in 2003.
   “As far as the outlook for 2005, we expect to improve upon 2004,” said Allen Doane, president of Alexander & Baldwin. “Matson’s Hawaii fleet is now back to its normal eight-ship configuration and Hawaii’s economy appears to have momentum that will carry through for the remainder of the year.”
   However, Matson expects increased competition from additional capacity to be deployed in the Hawaii trade.