By ILIMA LOOMIS, Staff Writer
POSTED: October 31, 2009
Maui Land & Pineapple Co. has reported a $25.5 million loss for the third quarter of 2009.
The loss includes $22.8 million in recorded losses on the company’s investment in Kapalua Bay Holdings. On top of previous write-downs, that means the company now has lost all of the money it originally invested in the venture, said Chief Financial Officer John Durkin.
"Unfortunately, we’ve now written down all our equity in Kapalua Bay Residences," he said.
The latest report brings ML&P’s total losses for the first nine months of 2009 to $92.9 million – larger than the $71.6 million loss the company recorded for the entire year in 2008.
All sectors of the company saw operating losses in the third quarter of this year, but some lost less money than they did at the same time last year.
The resort segment reported an operating loss of $2.7 million for the quarter – compared to losing $5.7 million for the same period in 2008.
Durkin called that a "pretty significant improvement" over last year.
He credited physical improvements at the resort and surrounding lands, aggressive pricing to keep room occupancy "decent" and promotions at the resort’s golf courses with helping to move revenues back in the right direction.
"The changes we’ve made at the resort in the past year have had a pretty positive impact to reduce our losses," he said.
Agriculture reported an operating loss of $4.1 million – a big decrease from the $9.5 million loss it reported at the same time last year.
Most of the improvement was due to cost savings from the reduction of agricultural operations, Durkin said.
The company had no decision yet on the future of its pineapple operations.
"We’ll be considering that in the near future," he said.
Maui Land & Pineapple’s agriculture and resort branches have seen their work forces significantly cut back by layoffs in 2008 and earlier this year.
The company announced in February it was cutting 100 jobs at Kapalua Resort and its corporate headquarters, and the remaining employees took a 10 percent pay cut. In July 2008, it laid off 274 employees, reducing its work force at Maui Pineapple Co. by almost half.
ML&P’s biggest losses of the third quarter this year were recorded in its development branch, which reported a $16.9 million loss. The development segment had reported a $2.4 million profit in the same period last year.
While development took the hit for losses on the company’s Kapalua Bay investments, it also recorded profits from two land sales: the 125-acre Makana Estates parcel mauka of Honoapiilani Highway in Kapalua, which sold in September for $10 million; and a 3.4-acre "executive residence" on Inu Place in Kula, sold in August to John Smalley for $1.4 million.
"There’s a minus and a plus," Durkin said.
He said the company was continuing to make changes to improve its bottom line.
"Overall, it’s a tough environment," he said. "We’ve made a lot of progress in terms of cutting costs and increasing the competitiveness of the company."
* Ilima Loomis can be reached at firstname.lastname@example.org.