Alexander & Baldwin, Inc. has reported second quarter 2002 net income of $13,197,000, or $0.32 per share. Net income in the second quarter of 2001 was $24,514,000, or $0.61 per share, including a one-time gain of $0.23 per share on the sale of marketable bank securities. Revenue in the second quarter of 2002 was $279,185,000, compared with revenue of $293,012,000 in the second quarter of 2001. Net income for the first half of 2002 was $23,004,000, or $0.56 per share. For the first half of 2001, the Company reported net income of $46,948,000, or $1.16 per share. Revenue in the first half of 2002 was $512,972,000, compared with $567,793,000 in the first half of 2001. Second Quarter Results"We were pleased to see the second quarter results above the first, as we had anticipated," said Allen Doane, president and chief executive officer of A&B. "Year-to-date operating comparisons with 2001 are, however, unfavorable, mostly as a result of economic conditions precipitated by the events of September 11, 2001 and lower productivity at Matson's Sand Island container terminal. "In the second quarter of 2001, the Company sold 749,000 shares of stock in Pacific Century Financial Corp. for a gain of $9.4 million, or $0.23 a share. We had no comparable transaction this year. "Recently, domestic travelers have helped to boost total visitor arrivals to Hawaii close to those of comparable periods in 2001. Also aiding the local economy, the strength of the yen versus the U.S. dollar has raised the purchasing power of visitors to Hawaii from Japan. Low interest rates continue
to stimulate an active market in the state for residential properties. "Challenges to earnings growth include the present contract negotiations with longshore labor now taking place on the West Coast and in Hawaii, our continuing efforts to reach target levels of productivity at our container terminal in Hawaii, as well as broader concerns over the effects on consumer spending and travel that might result from the recent slump in the U.S. financial markets. "Among the highlights of the second quarter were: the first quarterly increase in Matson's westbound Hawaii container volume since the events of 9/11; the announced decision to proceed with a $220 million commitment to construct two replacement vessels for Matson's fleet; the restructuring of minority investments in two Matson affiliates; an announced joint venture partnership with DMB Associates, Inc. for the development of our 1,045 acre project, Kukui'Ula, in the Poipu resort area of Kauai; and the purchase of shopping centers in Long Beach, California, and in Mililani, here on Oahu, for an aggregate investment of $50 million." Ocean Transportation Segment Results Improve Versus 1st QuarterIn the second quarter of 2002, ocean transportation operating profit was $14.8 million. That was a decrease of $3.9 million, or 21 percent, from $18.7 million in the second quarter of 2001. The decrease in operating profit resulted primarily from continuing unfavorable year-to-year comparisons in stevedoring performance at the Sand Island terminal in Honolulu, offset to some extent by lower expenses from operating seven ships in the Hawaii trade, versus eight a year ago. The quarter's results, however, were substantially better than Matson's operating profit in the first quarter of this year, which were just $2.5 million. Second quarter 2002 Hawaii service container volume was seven-percent higher than in the second quarter of 2001; automobile volume was eight-percent lower. The improvement in container volume was due to a combination of contract-carriage volume and apparent strengthening in some segments of Hawaii's economy. Some portion of that freight increase also is attributable to shipments in advance of the June 30 expiration date of the West Coast longshore contract. In the first half of 2002, ocean transportation operating profit was $17.3 million. This was a decrease of $18.9 million, or 52 percent, from $36.2 million in the first half of 2001. The decrease resulted primarily from post 9/11 economic effects and from lower productivity at Sand Island.