Matson Q1 2014 Profits Slip, Market Growth Expected
Leading US carrier in the Pacific Matson report that in the first quarter of 2014 its financial results were negatively impacted by the timing of fuel surcharge collections.
- Net Income of $3.4 million versus $9.1 million in 1Q13
- Operating income of $9.9 million versus $18.7 million in 1Q13- EBITDA of $27.3 million versus $36.0 million in 1Q13
- Financial results negatively impacted by timing of fuel surcharge collections
- Full year Ocean Transportation operating income expected to be near or slightly above 2013 level of $104.3 million and Logistics expected to modestly exceed 2013 level of $6.0 million
Matt Cox, Matson's President and Chief Executive Officer, commented, "Our businesses performed as we anticipated in the first quarter of 2014, driven by sustained demand in our core markets and continued freight rate strength in all of our markets. And while the timing of fuel surcharge collections significantly impacted financial results during this quarter, our businesses are running well and continue to generate substantial cash flow. Coupled with our recent debt financing, we have ample capacity to fund our newbuild vessel commitments, pursue growth opportunities and maintain a healthy dividend."
Mr. Cox added, "We continue to be encouraged by our prospects in Hawaii, and in a strengthening broader economy that will positively shape volume in our Jones Act trades and in Logistics. We expect modest improvement at SSAT and that our premium expedited service offering from China will continue to be in high demand. As a result, we are positioned well to meet or surpass our financial performance from last year."
Ocean Transportation: The Company believes that the Hawaii economy is in a multi-year recovery and anticipates modest market growth in the trade in 2014. However, a competitor is expected to launch new containership capacity into the trade in the fourth quarter of 2014, which could impact the Company's container volume. In the China trade, overcapacity is expected to continue at least through 2014, with vessel deliveries outpacing demand growth. However, the Company expects to maintain its volume and average freight rates with high vessel utilization levels, as its expedited service continues to realize a premium to market rates. In Guam, muted growth is expected and the Company envisions its volume to be modestly better than 2013, assuming no new competitors enter the market.
For the full year 2014, Ocean Transportation operating income is expected to be near or slightly above levels achieved in 2013, which was $104.3 million (exclusive of a $9.95 million Litigation Charge). This outlook excludes any future impact from the September 2013 molasses incident.
Logistics: The Company expects 2014 operating income to modestly exceed the 2013 level of $6.0 million, driven by continued volume growth, expense control and improvements in warehouse operations.
For more information go to: http://www.matson.com