Matson Inc. is navigating its own course following the ocean carrier and logistics provider’s separation from the Hawaii-based land and agriculture business of longtime parent Alexander & Baldwin.
During its first week of trading on the New York Stock Exchange, the former Matson Navigation’s stock fell to $26.21 a share from a July 2 opening price of $26.50. Alexander & Baldwin stock soared to $33.78 from $25.82 after Matson was cut loose.
Matson officials said they’re optimistic about their prospects as a standalone company. “As an independent company, Matson will be well capitalized, with a strong balance sheet and credit profile, thereby providing stability and the financial flexibility to pursue future growth opportunities,” CEO Matt Cox said.
The carrier dominates the domestic Jones Act trades to and from Hawaii and Guam, and has an express container service from China to Southern California. Matson Logistics, established in 1987, provides rail intermodal, highway brokerage and warehousing services. Matson also has interests in marine terminals in Honolulu and on the West Coast.
The company listed pro-forma operating profit last year of $79 million on $1.5 billion in revenue. Ocean transportation generated $74 million of the profit and $1.1 billion of the revenue.
Debt financing agreements before the separation provided Matson with a $375 million unsecured revolving senior credit facility, with an option for an additional $75 million. Matson also issued $170 million in senior unsecured notes averaging 3.97 percent and 9.3 years to maturity. The company has $56 million in privately placed notes secured by one of its ships, and $74.8 million of secured debt under the Maritime Administration’s Title XI program.
Matson’s fleet of 17 vessels includes container ships, combination container and roll-on, roll-off vessels and custom-designed barges used in hub-and-spoke feeder services to outlying islands in Hawaii.
In presentations to investors, company officials have emphasized Matson’s dominance in Hawaii and Guam and express China service to the West Coast, and the company’s terminals, logistics services, strong balance sheet and relatively modern Jones Act fleet, averaging 19 years old.
Matson has three sailings a week from the West Coast to Honolulu. With Horizon Lines’ exit from the trans-Pacific last year, Matson is the sole container ship operator to Guam.
Matson officials say their main focus will be on developing existing operations instead of growth through acquisitions, but that the company will watch for opportunities. “We’ve had a long interest in the Jones Act business in Alaska,” Cox said. “There are two operators that are there today, and if one of those two businesses were to become available for sale, we would be very interested.”