China, Alaska Services Boost Matson’s Third Quarter
U.S. carrier and container terminal operator Matson, Inc. reported a net income of USD 41.5 million for the third quarter of 2015, an increase of 93% compared to the same period last year.
“Third quarter results were strong, led by continued high demand for our expedited China service, a full quarter of our new Alaska business, volume improvements in Hawaii, and improved performance at SSAT and Logistics,” said Matt Cox, Matson’s President and Chief Executive Officer.
In the China trade, despite a continued decline in commodity freight rates for other ocean carriers, the company’s freight rates were higher in the third quarter 2015 than in the prior year period. Matson expects its expedited service to continue to realize a sizeable premium relative to commodity ocean carrier market rates for the fourth quarter 2015. However, for the fourth quarter Matson expects its China volume to be moderately lower than the prior year period due to one fewer sailing, the absence of the extraordinarily high demand experienced in the fourth quarter 2014 during the U.S. West Coast labor disruptions, and recent market softness.
The company’s third quarter results were negatively impacted by USD 10 million of additional expenses related to the acquisition of Horizon Lines, Inc. Net income for the quarter ended September 30, 2014 was USD 21.5 million. Consolidated revenue for the third quarter 2015 was USD 544.3 million compared with USD 441.8 million reported for the third quarter 2014.
“The integration of our new Alaska operations continues to progress well and the business is on track to achieve our earnings and cash flow accretion expectations. Looking ahead, Matson is well-positioned to generate significant cash flow to pay down debt, fund growth initiatives, including our new vessel investments, and return capital to shareholders via both dividends and the share repurchase program announced today,” Cox added.
The company continues to expect the integration of its Alaska operations to be completed within two years post-closing of the Horizon Lines acquisition.
For the nine months ended September 30, 2015, Matson reported net income of USD 76.4 million, compared with USD 43 million in 2014. Year-to-date 2015 results were negatively impacted by USD 23.5 million of additional selling, general and administrative expenses related to the Horizon Lines acquisition and by USD 11.4 million for the company’s settlement with the State of Hawaii to resolve all of the state’s claims arising from the discharge of molasses into Honolulu Harbor in September 2013. Consolidated revenue for the nine months ended September 30, 2015 was USD 1,390.1 million, compared with USD 1,270.7 million in 2014.
Ocean transportation revenue increased USD 115.3 million during the third quarter 2015 compared with the third quarter 2014.
On a year over year basis, Hawaii container volume increased by 14.8 percent primarily due to volume gains resulting from a competitor’s service reconfiguration and vessel mechanical failure, and modest market growth.
In addition, Matson’s Board of Directors has authorized a share repurchase program for up to 3 million shares of common stock, representing approximately seven percent of the company’s issued and outstanding common stock, through November 2, 2018.