Kapalua resort bulk of company business in the fourth quarter
A much-shrunken Maui Land & Pineapple Co. finished 2009 losing $123.3 million, equivalent to $15.33 a share.
The year before, it had lost $79.4 million, or $9.98 a share.
With Maui Pineapple Co. gone and the Community Development segment almost at a standstill, in the fourth quarter the company business was mostly Kapalua resort.
The resort had revenue of $6.8 million, down from $8.5 million in the last quarter of 2008, reflecting the decline in the visitor industry. Its operating loss was $4,672,000, down from $6,621,000 the year before.
For the year, Kapalua had revenue of almost $30 million and losses of $16.1 million. Thus the resort accounted for about three-fifths of the company’s total operating revenues in 2009 of $50 million, and about 13 percent of losses.
Pineapple had continued at a low level through the end of the year, and it continued to pile up losses. The loss from discontinued operations of $24.7 million accounted for four-fifths of the $30.3 million in losses in the fourth quarter.
Since then, ML&P has sold much of its Maui Pine assets to Haliimaile Pineapple Co., run by former employees, who are attempting to revive pine cultivation, although with a market to be limited almost entirely to the islands.
Of all the losses during the year, pine made up $11 of the $15.33 per share.
Despite the poor results across all sectors, ML&P stock has been riding up along with the broad market. It reached a 12-month low of $2.05 per share in February and rose to $5.23 Tuesday. The fourth-quarter results were released after the New York Stock Exchange closed.
The results released Tuesday were unaudited interim numbers. The final, audited report, with management commentary, is expected to be submitted to the Securities and Exchange Commission by the end of this month.
The 2009 operating results have been adjusted to remove the discontinued Maui Pine operations. Without pine, ML&P in 2009 was about the same size as ML&P in 2008: $50.4 million in revenue.
As of Tuesday, its market capitalization was about $41 million, about one-seventh of what it was before the wheels came off.
The company said its fourth quarter results include charges of $20.9 million related to the sale and lease of Maui Pine assets, employee severance from the approximately 285 layoffs and cancellation of contracts.
The company’s failed joint venture into Kapalua Bay Holdings (the Residences at Kapalua) cost it nearly as much as the failure of pineapple. In 2008-09, ML&P took losses of $92.5 million. The project was completed, after a suspenseful search for new lenders after the failure of Lehman Brothers, and it continues to offer units for sale.
The KBH losses contributed to operating losses of $62.6 million last year (and more than $100 million in two years) for Community Development. With little in the way of new product on hand, and not much demand for either resort commercial or resort residential property, the sector had 2009 sales of only $19.9 million, including sales of undeveloped land.
The resort saw fewer visitors (along with the rest of the island and state), lower revenues due to price cutting, fewer rounds of golf and lower income from retail and villa rental operations. After operating the resort itself since developing it three decades ago, late last year ML&P brought in Outrigger to manage it.
That was among the cost-cutting measures that helped reduce the level of operating losses in the fourth quarter.