Alexander & Baldwin Inc.’s agricultural sector – led by Maui’s Hawaiian Commercial & Sugar Co. – produced a “strong performance” in 2011 while losses related to Matson Navigation Co. and the real estate sales division put a drag on company profits.
In reporting its 2011 and fourth-quarter financial results Monday, the Honolulu-based company said it logged a net income of $34.2 million, or 81 cents a share, for the year, down 63 percent from the $92.1 million, or $2.22 a share, in 2010 and down nearly 75 percent from the $132 million, or $3.19 a share, in 2008, as the Great Recession began roiling the national economy.
For the fourth quarter, A&B’s net income was only $1.6 million, or 4 cents a share, down from $20.2 million, or 48 cents a share, in the same quarter the previous year.
The company’s ocean transportation sector showed an operating profit of $74.1 million for the year, down from $118.7 million in 2010. This sector of the company suffered losses from the discontinuing of its second China-Long Beach service in the third quarter.
In addition, A&B said that the company continues to make progress on plans to separate its shipping and real estate/agricultural businesses in the second half of this year.
The agricultural sector, which includes HC&S and trucking and storage companies on Maui, Kauai and the Big Island, showed an operating profit of $22.2 million in 2011, up 264 percent from $6.1 million in 2010. This is a big contrast from three years ago, when agriculture lost $27 million and the board of directors debated shutting down sugar operations.
Alexander & Baldwin Inc. said today its board of directors has approved a plan to split the company into two separate companies, one focusing on real estate and agriculture and the other on shipping.
The two companies would be independent and publicly traded, the company said in a news release.
Under the plan, A&B shareholders will own one share of both A&B and Matson stock for each share of company stock owned. The separation is expected to be completed in the second half of 2012.
The announcement was made after the market closed. A&B’s shares rose $1.50 to $39.56 in after hours trading.
“Over the past decade, Alexander & Baldwin’s board of directors and management have periodically conducted strategic reviews, including an evaluation of the merits of separating into two companies,” said Walter Dods, A&B’s chairman. “After thorough evaluation, we have concluded that the increased size, capabilities and financial strength of both our land and transportation businesses now enable these operations to independently execute their strategies to maximize shareholder value.”
Honolulu-based A&B has grown substantially over the past decade. Its commercial real estate portfolio has increased by almost 50 percent to its present size of 7.9 million square feet, comprising 44 properties in Hawaii and eight mainland states. The portfolio of commercial properties generates a significant and stable source of cash flow for the company, and is an important source of capital for A&B’s real estate investment and development activity.
After a year and a half of review, the Public Utilities Commission has granted Pasha Hawaii Transport Lines authority to carry cargo between island ports, provisionally through the end of 2013.
Pasha (pronounced PAY-sha, the name of the California family that owns the privately held business) sails the MV Jean Anne to Kahului every two weeks. The Jean Anne is the only purpose-built vehicle transporter in the West Coast-Hawaii service, with a home port in San Diego. It’s next stop at Maui will be next Wednesday.
In a contested case, Pasha argued that competition would lead to a better allocation of resources and better service and prices for interisland vehicle freight and other bulky items that the Jean Anne can handle, such as construction materials.
Young Brothers, which has what Pasha calls a monopoly of interisland shipping, objected that the proposal was not an apples-to-apples comparison, since the Jean Anne will call only at big ports: Honolulu, Kahului, Hilo, Nawiliwili, Barbers Point and Pearl Harbor.
Smaller harbors, like Kaumalapau on Lanai and Kaunakakai on Molokai, are served by Young Brothers barges.