Honolulu-based A&B posted Thursday a second quarter profit of $29 million, or 70 cents a share, up from $13 million a year ago, or 31 cents a share. Its real estate division A&B Properties was profitable and its agribusiness division also swung to a profit, but most of the improvement to the bottom line came from a 75% jump in operating profit at its shipping division, Oakland, Calif.-based Matson Navigation Co.
Hawaii container and car traffic slipped, while Guam volume rose slightly, but business soared on the China Express, Matson's comparatively high-speed containership service from several central China ports to Long Beach, Calif. The service began a few years ago, with Matson sailing containships to China that formerly returned almost empty to Long Beach after taking cargo to Hawaii and Guam. Smaller and faster than the supervessels that sail from Hong Kong to the U.S. West Coast, these Matson ships visited other China ports, effectively taking a shortcut to Long Beach by sailing at a more northerly latitude than ships leaving Hong Kong.
"We have decided to initiate a second China shipping service, with five time-chartered, 3,500 TEU ships that will provide weekly service between three China ports and Long Beach," A&B said Thursday. The phrase "3,500 TEU" describes the number of standard containers that will fit on a ship and is the shipping industry's standard way of measuring the capacity of its vessels.
The new service, which starts in a matter of weeks, will serve Hong Kong, Shenzhen and Shanghai, and the rented ships will not stop in either Hawaii or Guam on their westbound runs. The original China Express service will continue.
China containers rose 35% from last year's second quarter to this year's, for a total of 15,000 containers, while Hawaii saw 33,700 containers, down 2% from year-before levels. Guam containers rose 17% to 4,200. Matson shipped 21,100 cars, down 22% from last year's second quarter.
Matson second quarter revenue was $257 million, up 18% from year-before levels, and operating profit, after that 75% year-to-year jump, was $37 million. A spinoff of the maritime shipping division that does logistics services for shippers on the mainland saw $89 million in revenue and $1.5 million operating profit in the quarter.
The next largest part of the company, A&B Properties, saw $8.5 million operating profit from real estate leasing, down 23%, and $8 million from real estate sales in the second quarter, down 17%, compared to the same time last year.
The third broad segment of A&B operations, agribusiness, including Kauai Coffee Co. and Maui's Hawaii Commercial & Sugar, swung to a $2 million operating profit on higher sugar production and prices. Production was 67% higher than last year. Coffee produced $1 million revenue.