Matson 2016 profit off 21.8pc to US$80.5 million as sales rise 2.9 per cent
HONOLULU's Matson shipping line posted a 21.8 per cent year-on-year decline in 2016 net profit to US$80.5 million, drawn on revenues of $1.54 billion, which increased 2.9 per cent.Fourth quarter profit, described as "operating income margin", was down 27.5 per cent year on year to $7.9 million drawn on revenues of $406.1 million, up 1.3 per cent.
"Matson's core businesses performed largely as expected in the fourth quarter. However, the quarter was negatively impacted by the increase in bunker fuel prices from mid-November through December," said Matson president and CEO Matt Cox.
"Full year 2016 financial results failed to match the exceptional results achieved in 2015, when we benefited from record rates in our expedited China service and volume gains in Hawaii as our primary competitor suffered operational difficulties," Mr Cox said.
"2016 was a year in which we made critical investments for our future," he added. "We finalised our Hawaii fleet renewal programme by ordering two new Kanaloa-class vessels and we expanded our logistics platform into Alaska with the acquisition of Span Alaska."
Mr Cox said the two new combination container and roll-on/roll-off ships that are scheduled for delivery at the end of 2019 and in mid-2020, as well as the acquisition of Span Alaska, are expected to increase profitability in the years ahead.
For 2017, Mr Cox said, "We expect to see modest improvement in each of our core businesses with the exception of Guam, where we expect further competitive losses due to the launch of a competitor's second sip. As a result, we expect Matson's 2017 operating income to be lower than it was in 2016."
Results were also negatively impacted by $29.6 million of additional selling, general and administrative expenses related the company's acquisition of Horizon Lines and by $13.3 million for the settlement with the State of Hawaii to resolve all of the State's claims arising from Matson's discharge of molasses into Honolulu Harbour in September 2013.
In China, container volume in the fourth quarter 2016 was 27.3 per cent higher year on year due to stronger demand for Matson's expedited service following the bankruptcy of Hanjin, the company said.