Alexander & Baldwin said Wednesday that its Ocean Transportation unit, Matson Navigation, earned a fourth quarter operating profit of $13.5 million, which was down 36 percent from the $21.1 million it earned in the same quarter of 2008.
Matson’s revenue slid by 2 percent to $234.8 million from $239.5 million in the previous year quarter due to lower yields in the China trade, lower fuel surcharges and lower container volumes in the Hawaii trade. The company said these negatives were partially offset by higher China and Guam service volumes, favorable yields in the Hawaii trade and higher Hawaii auto volumes.
The company said Hawaii container volume dropped by 5 percent as it continued to be affected by the economic downturn although the rate of decline moderated in the fourth quarter.
“Ocean Transportation should benefit from stabilizing volumes in the key Hawaii trade and a firming of pricing in the China trade, but may be challenged to achieve historical margins at lower volume levels,” Alexander & Baldwin said in a statement.
The unit’s fourth quarter operating profit and margins were negatively impacted by the rudder failure on the Mokihana, which led to higher vessel repair expense and the need to temporarily add a 10th ship to the fleet to ensure that schedule and service integrity was maintained.
The estimated impact to operating profit was approximately $6.3 million, which reduced fourth quarter operating profit margin from 8.4 percent to 5.7 percent. By quarter's end, repairs on the Mokihana had been completed and the fleet returned to a nine-ship rotation.