Matson reaffirms its bright outlook
May 07, 2014
Adhering to its initial positive forecast for 2014, Matson, Inc. says its businesses performed as anticipated in the first quarter of 2014, driven by sustained demand in their core markets and continued freight rate.
“While the timing of fuel surcharge collections significantly impacted financial results during this [past] quarter, our businesses are running well and continue to generate substantial cash flow,” Matt Cox, Matson’s President and Chief Executive Officer, told investors. “Coupled with our recent debt financing, we have ample capacity to fund our newbuild vessel commitments, pursue growth opportunities and maintain a healthy dividend.”
As reported here late last year, Matson announced that it raise its rates for the company’s Hawaii service by $175 per westbound container and $85 per eastbound container in 2014.
The company reported net income of $3.4 million, or $0.08 per diluted share for the quarter ended March 31, 2014. Net income for the quarter ended March 31, 2013 was $9.1 million, or $0.21 per diluted share. Consolidated revenue for the first quarter 2014 was $392.5 million compared with $394.7 million reported for the first quarter 2013.
“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,” said Cox. “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.”
Matson 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.
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!