For the quarter ended December 31, 2018, net income stood at USD 20.6 million, compared a net income of USD 166.9 million reported in the corresponding quarter a year earlier, representing a decrease of 87.7 percent year over year.
Consolidated revenue for the fourth quarter of 2018 was USD 564.9 million, against USD 516.1 million seen in the fourth quarter of 2017.
Additionally, Matson reported net income of USD 109 million for the full year 2018, a drop of 53 percent when compared to a net income of USD 232 million posted in 2017. Revenue for the full year 2018 was USD 2,222.8 million, compared with USD 2,046.9 million in the prior year.
“Our operating performance in the fourth quarter was in-line with expectations, with strong demand in our China service and strong execution across all service lines in Logistics,” Matt Cox, Matson’s Chairman and Chief Executive Officer, commented.
“For the year, we performed well with exceptional performance in our China service and significant contributions from Logistics and SSAT, all of which helped propel the company’s annual cash flow from operations to a new high,” Cox added.
The company’s container volume in the Hawaii service in the fourth quarter 2018 was flat year-over-year despite modest growth in the Hawaii economy.
In China, Matson’s container volume in the fourth quarter 2018 was 3.8 percent higher year-over-year as the company experienced elevated demand for its service late in the quarter during a period that is traditionally not as strong. The company achieved average freight rates higher than the fourth quarter of 2017.
Moreover, the company’s container volume in the fourth quarter of 2018 in Guam was 10.6 percent higher year-over-year primarily due to typhoon relief volume. In addition, in Alaska, the company’s container volume for the fourth quarter 2018 was 4.2 percent higher year-over-year due to higher northbound volume.
The contribution in the fourth quarter 2018 from the company’s SSAT terminal joint venture investment was USD 0.9 million lower than the fourth quarter 2017 due primarily to higher operating costs, partially offset by higher revenue resulting from higher lift volume. For 2019, Matson expects the contribution from SSAT to be lower as a result of lower lift volume coming off an exceptionally strong lift volume level in 2018.
For the full year 2019, ocean transportation operating income is expected to approximate the USD 131.1 million achieved in 2018.
In Q4 2018, operating income for the Matson’s logistics segment was USD 4.4 million higher than in Q4 2017 due to improved performance across all of the service lines. The company expects logistics’ operating income for the full year 2019 to approximate the level achieved in 2018 of USD 32.7 million.
In November 2018, a subsidiary of Matson entered into an agreement to sell MV Maunalei containership for approximately USD 106 million, and subsequently lease back the ship. As a result of this transaction, the company expects on an annual basis USD 12 million in lease expense and USD 4.8 million in lower depreciation and amortization expense, resulting in USD 7.2 million in lower operating income. In addition, a decline in EBITDA is expected as a result of the abovementioned sale and leaseback.
“For the full year 2019, we expect steady financial performance with logistics to approximate the level achieved in 2018 and a higher contribution from Alaska, offset by lower contributions from our China service and at SSAT, both of which are coming off exceptionally strong years,” Cox continued.
“While we expect net income in 2019 to decline year-over-year, we expect EBITDA in 2019 to approximate the level achieved in 2018 after taking into account a full year impact in 2018 of the vessel sale and leaseback transaction,” he concluded.
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