Molasses settlement hits Matson earnings

AUGUST 4, 2015 — U.S. flag operator Matson, Inc. (NYSE: MATX) today reported net income of $9.9 million, or $0.23 per diluted share for the quarter ended June 30, 2015. It said that second quarter results were negatively impacted by $13.5 million of additional selling, general and administrative expenses related to the company’s acquisition of Horizon Lines, Inc. and by $11.4 million of costs related to settlement with the State of Hawaii to resolve all claims arising from the discharge of molasses into Honolulu Harbor in September 2013 (see earlier story), which together reduced earnings per diluted share by $0.33.

Net income for the quarter ended June 30, 2014 was $18.1 million, or $0.42 per diluted share.
Consolidated revenue for the second quarter 2015 was $447.6 million compared with $436.4 million reported for the second quarter 2014.

Matt Cox, Matson’s President and Chief Executive Officer, commented, “Our core businesses delivered strong results in the second quarter, led by continued levels of exceptional demand for our premium expedited China service, yield improvements in Hawaii and Guam, further improvements at SSAT, and, for the first time, operating results from our Alaska acquisition. However, these favorable operational gains were offset by costs related to our Alaska acquisition and, more recently, the resolution of the molasses incident.”

Referring to Matson’s acquisition of the Horizon Alaska operations, Mr. Cox said “we’re off to a good start and our integration is progressing as planned. We are on track to achieve our earnings and cash flow accretion expectations for this business within two years. Looking ahead to the balance of 2015, we expect Ocean Transportation operating income to moderately exceed 2014 levels and we expect our core businesses to continue to generate significant cash flow to pay down debt, fund growth initiatives, including our new vessel investments, and return capital to shareholders.”