Matson results receive boost from strong China and Alaska volumes
Higher container volumes handled in the Chinese and Alaskan markets helped lift New York-listed Matson's total revenue for the third quarter of the year to $543.9m versus $500.4m in the year ago.
As a result, Ocean Transportation revenues were up 5.3% at $419.2m with contributions from higher fuel surcharges and a higher $7.5m contribution versus $3.6m in 2016 from the company's SSAT terminal joint venture in addition to the above reasons.
Box volumes for its expedited China service rose 11.7% year-on-year on robust demand as well as an extra sailing, while in Alaska, southbound volumes increased 8.2% on better-than-expected seafood harvest with an extra northbound sailing. A 22.2% rise in other container volumes from services to islands in Micronesia, the South Pacific and Okinawa also helped.
The stronger volumes though were offset by a 22.6% drop in box volumes in Guam where a US-flagged competitor ramped up services, and a 6.4% fall in container volumes in Hawaii as construction-related volumes dropped. The key Oahu market was transitioning from high-rise projects to master planned community projects with less need for products shipped by containers.
Logistics revenues rose 21.8% to $124.7m for the quarter mainly on freight forwarding contributions from its acquired Span Alaska business.
Net income for the third quarter stood at $34.1m compared with $25.3m in the year ago period
"Matson achieved better-than-expected third quarter results due to stronger demand for our expedited China service, stronger southbound volume in Alaska, the timing of fuel surcharge collections, and higher lift volumes at SSAT. These positive contributors were somewhat moderated by lower volume in Hawaii and continued competitive pressure in Guam," said Matson chairman and chief executive Matt Cox.
"Stronger performance year-to-date in China, Alaska, and SSAT have more than offset the negative trends this year in Guam and more recently with lower construction-related cargo in Hawaii. Overall, we expect our businesses to continue to perform well during the fourth quarter, and due to our stronger-than-expected third quarter results we are raising our outlook for full year earnings before interest, taxes, depreciation and amortisation to modestly exceed last year's ebitda."
It is forecasting full year ebitda to be slightly higher than the $290m reported in 2016.