JONES Act carrier Matson Inc posted a more than seven fold increase in first quarter year-on-year net profit to US$25 million, drawn on revenues of $398.2 million, an increase of 1.5 per cent.
"Performance improved across all lines of business, led by continued levels of exceptional demand for our expedited China service," said Matson president and CEO Matt Cox, whose experience appears to contradict mega carriers like Maersk who say shippers won't pay for faster service.
Mr Cox also spoke of "modest yield improvements" in Hawaii and Guam, and further improvements in Logistics operations and SSAT.
"In addition, lower bunker fuel prices positively impacted our results, primarily due to timing differences as fuel surcharge collections outpaced fuel expenditures," he said.
"Our businesses are performing well and continue to generate substantial cash flow that, combined with our strong balance sheet, provides ample capacity to close our pending Alaska acquisition, fund new vessel construction commitments, and comfortably sustain our dividend," said Mr Cox.
"We continue to be encouraged by our prospects in Hawaii, and in a strengthening broader economy that will produce volume growth in our Jones Act markets and in logistics," he said
But Mr Cox worried about new vessel capacity expected to enter our core Hawaii market in the second quarter of this year.
"We expect our Hawaii container volume for the year to be relatively flat with 2014. Our premium expedited service offering from China is expected to remain in high demand. Overall, we remain well positioned to deliver 2015 operating results moderately higher than those we achieved in 2014."
Hawaii container volume was flat year on year as modest westbound market growth was largely offset by lower eastbound backhaul, said the Matson statement accompanying the results.
"China volume increased 5.1 per cent, reflecting continued strong demand for the company's premium expedited service; and Guam volume decreased five per cent due to the timing of select shipments. Hawaii automobile volume decreased 31.5 per cent primarily due to certain customer losses.
"In addition, the company incurred $0.2 million in legal and other expenses related to the molasses released into Honolulu Harbour in September 2013," said the company.
This refers to the aftermath of $2.1 million fine and other expenses related to the molasses spill which afflicted last years results.
Source : HKSG.