Matson Parent Profit Sinks 93 Percent

Alexander & Baldwin, industrial real estate operator and parent of Matson Navigation, earned a profit for the first quarter of $3 million, a 93 percent slump compared with earnings of $42.1 million in the first quarter of the prior year.

Revenue for the first quarter of 2009 fell 45 percent to $319.9 million.

Part of the decline in revenue was due to comparison with a quarter in which A&B sold a larger than normal amount of real estate. But another major difference was an unprecedented crash in shipments carried by Matson Navigation. The volume drop at Matson “has no modern parallel,” said W. Allen Doane, A&B’s chairman and chief executive officer. In Hawaii, the company posted a 14 percent decline with a 44 percent plunge in auto shipments. At the same time, China volume was off 18 percent in the first quarter as compared to the same period in 2008. As a result, the ocean transportation segment posted an operating loss of $500,000.

During the period, Matson cut its non-union workforce by nearly 15 percent and took one ship out of its fleet deployment to reduce operating costs. Restructuring in the segment cost $6 million. Reduced demand at Matson Integrated Logistics spurred staff reduction and other cost cutting measures there.

“Our financial performance for the first quarter of 2009 was negatively impacted by the deepening national and international economic contraction,” said Doane. “Increased weakness in our transportation segments, slower sales and leasing activity in our real estate businesses and increased non-cash pension expenses combined to significantly decrease earnings.”

Contact Thomas L. Gallagher at tgallagher@joc.com .