PANABO, Philippines — Dazzled by the opportunities offered by China’s vast and increasingly prosperous populace, Renante Flores Bangoy, the owner of a small banana plantation here in the southern Philippines, decided three years ago to stop selling to multinational fruit corporations and stake his future on Chinese appetites. Through a local exporter, he started shipping all his fruit to China.
Today, his estate on the tropical island of Mindanao is scattered with heaps of rotting bananas. For seven weeks now — ever since an aging U.S.-supplied Philippine warship squared off with Chinese vessels near a disputed shoal in the South China Sea — Bangoy has not been able to sell a single banana to China.
He is a victim of sudden Chinese restrictions on banana imports from the Philippines that China says have been imposed for health reasons but that Bangoy and other growers view as retaliation for a recent flare-up in contested waters around Scarborough Shoal.
“They just stopped buying,” Bangoy said. “It is a big disaster.”
His plight points to the volatile nationalist passions that lie just beneath the placid surface of Asia’s economic boom. It also underscores how quickly quarrels rooted in the distant past can disrupt the promise of a new era of shared prosperity and peace between rising China and its neighbors.
Scarborough Shoal, a cluster of coral reefs and islets, lies more than 500 miles from the Chinese mainland and 140 miles off the northern coast of the Philippines, well within a 200-nautical-mile “exclusive economic zone” provided for by the U.N. Convention on the Law of the Sea. But China — which claims most of the South China Sea, including portions also claimed by the Philippines, Vietnam, Malaysia, Brunei and Taiwan — insists that the shoal has been part of its territory
Maui Land & Pineapple Company, Inc. (MLP) reported a net loss of $13.2 million or $1.65 per share for the first quarter of 2009 compared to a net loss of $414,000, or $0.05 per share for the first quarter of 2008. Consolidated revenues were $15.6 million for the first quarter of 2009 compared to $25.4 million for the first quarter of 2008, a decrease of 39%. Results in the first quarter of 2009 largely reflect the continuing impact of the national and worldwide economic uncertainty that has resulted in reduced visitor counts to Maui and the State of Hawaii and slower sales of real estate. Approximately $10.5 million of the increase in the net loss resulted from the year-over-year decrease in profit from the Company’s equity investment in Kapalua Bay Holdings LLC. The Company’s $50 million cash sale of the Plantation Golf Course in March 2009 was accounted for as a financing transaction and, accordingly, no gain was recognized in the first quarter of 2009.
The Community Development segment reported an operating loss of $3.2 million for the first quarter of 2009 compared to operating income of $8.1 million for the first quarter of 2008. Revenues from this operating segment were $2.0 million for the first quarter of 2009 compared to $4.6 million for the first quarter of 2008. The Company recorded a loss from Kapalua Bay Holdings, LLC of $1.1 million in the first quarter of 2009 compared to income of $9.4 million in the first quarter of 2008. Lower results in 2009 from the Kapalua Bay equity investment reflect reduced sales for the first quarter of 2009 compared to the first quarter of 2008. Lower results from the Community Development segment in the first quarter of 2009 were also due to no land sales in the first quarter of 2009, compared to the sale of two non-core land parcels in the first quarter of 2008.
The Resort segment reported an operating loss of $4.2 million for the first quarter of 2009 compared to an operating loss of $2.3 million for the first quarter of 2008. Resort segment revenues decreased from $11.7 million in the first quarter of 2008 to $8.6 million for the first quarter of 2009 or 26%, reflecting lower revenues from the primary Resort operations, golf, retail and villas. A reduction in visitor arrivals and occupancy at the Resort was primarily responsible for the lower results in the first quarter of 2009.
The Agriculture segment produced an operating loss of $3.5 million for the first quarter of 2009 compared to an operating loss of $5.1 million for the first quarter of 2008. Revenues from the Agriculture segment decreased by 42% from $8.5 million in the first quarter of 2008 to $4.9 million in the first quarter of 2009 due to lower case volume of fresh pineapple sales. The lower loss in the first quarter of 2009 reflects higher average prices for fresh pineapple and lower operating costs in the Agriculture segment. In addition, the operating loss for the first quarter of 2008 included approximately $0.9 million in equipment write-offs and a provision of $0.9 million for potentially uncollectible accounts receivable.
MAUI LAND & PINEAPPLE COMPANY, INC.
Report of Consolidated Operations
(in thousands except per share amounts)
The Company’s reports for interim periods utilize numerous estimates of production, general and administrative expenses, and other costs for the full year. In addition, revenues from land sales are sporadic. Consequently, amounts in the interim reports are not necessarily indicative of results for the full year.
For Maui Land & Pineapple Company, Inc.
Robert I. Webber, 808-877-1674