Matson shows sharp profit decline in March

   Matson said Monday that it had a profit of $3.4 million in the first quarter ending March 31 compared to $9.1 million in the first quarter of 2013.
   Revenue was $392.5 million in the first quarter of 2014 compared to $394.7 million in the first quarter of 2013.
   Matt Cox, Matson’s president and chief executive officer, said, “Our businesses performed as we anticipated in the first quarter of 2014, driven by sustained demand in our core markets and continued freight rate strength in all of our markets.”
   He said timing of fuel surcharge collections significantly impacted financial results during the first quarter but that Matson’s businesses “are running well and continue to generate substantial cash flow. Coupled with our recent debt financing, we have ample capacity to fund our new-build vessel commitments, pursue growth opportunities and maintain a healthy dividend.”  
   Matson said for the full year 2014, it expects ocean transportation operating income to be near or slightly above the level achieved in 2013, which was $104.3 million,” excluding settlement of a $9.95 million litigation charge, related to settlement of a whistleblower lawsuit. Matson said it “believes that the Hawaii economy is in a multi-year recovery and anticipates modest market growth in the trade in 2014.”
   Pasha’s plans to launch a new container/ro-ro service between California and Hawaii in the fourth quarter “could impact the company’s container volume.”
   “In the China trade, overcapacity is expected to continue at least through 2014, with vessel deliveries outpacing demand growth.  However, the company expects to maintain its volume and average freight rates with high vessel utilization levels, as its expedited service continues to realize a premium to market rates. In Guam, muted growth is expected and the company envisions its volume to be modestly better than 2013, assuming no new competitors enter the market,” Matson said.
   Matson said it expects 2014 operating income for its logistics operations “to modestly exceed the 2013 level of $6.0 million, driven by continued volume growth, expense control and improvements in warehouse operations.”