Matson profit falls

Cost-cutting was not enough to prevent a fall in quarterly profits at Matson Navigation.

Parent Alexander & Baldwin (A&B) reported Wednesday that the containership operator saw a 30% drop in fourth-quarter operating profits, which fell to $21.1m from $30.1m a year a go.

The New York-listed company blamed the plunge on falling volume and higher maintenance and repair costs.

Alexander & Baldwin's Honolulu headquarters

"In the fourth quarter, as the full thrust of the economic contraction took hold, volume dropped sharply, resulting in a 30 percent decline in ocean transportation operating profit,” said A&B chief executive Allen Doane.

Containers on the company's China service fell by 16% to 11,100 teu in the quarter as Asian import demand slumped significantly.

Yield and cost-containing initiatives help blunt the profits fall, but operating profit margins shrank from 11.5% to 8.8%.

"In all of our trade lanes, vigorous focus on cargo mix, yield enhancement, fleet optimization and cost containment initiatives throughout the year partially offset the unexpectedly precipitous volume decline," Doane said.

Revenue fell by 9% to $240m.

For the year, Matson's operating profits fell by 16% to $106m, even though revenue rose by 2% to $1.02bn.

Alexander & Baldwin, a New York-listed real estate and shipping group, saw profits fall from $36.4m a year ago to $23.9m in the latest reporting period.

Matson operates 17 vessels on services between the US mainland, Hawaii, Guam and China.

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