There was a time when Matson Navigation Co. generated most of the profits for Alexander & Baldwin Inc. It still does, but the difficult economic environment has changed the balance at the conglomerate, and now agriculture has regained some of the stature it had in the old days.
Agriculture occupied an unaccustomed bright spot when the company reported third-quarter results Tuesday. Net income was $8.7 million, or 21 cents per share, compared to $25.7 million, or 62 cents per share last year.
Sugar production at Hawaiian Commercial & Sugar Co. is up 7 percent to 148,700 tons and operating profit margin for the first nine months was 15 percent.
That is a huge turnaround from the situation three years ago, when agriculture lost more than $27 million and the board of directors debated whether to stay in sugar. Since then, A&B has gotten out of coffee, a minor but often profitable sector it turned to when it got out of sugar on Kauai.
In those days, expansion of Matson into Asia was seen as a growth opportunity, but a year ago the company abandoned its second China-Long Beach service.
Matson is still huge, with $795 million in revenue this year, compared to $99 million for agriculture. But the operating profit margin, allowing for discontinued operations, is down to 7.7 percent.
And part of that big revenue is due to skyrocketing fuel prices. Matson passes along these increases to customers, so it takes in more money, but there is no profit in it.
Although China was a disappointment, ocean cargo volume to Hawaii held steady, even gained a little.
For the first three quarters, net income was $32.6 million, or 77 cents per share, compared to $71.9 million, or $1.74 per share last year.
Revenue for the first nine months of 2011 was $1.26 billion, compared to $1.17 billion last year.
President Stan Kuriyama said: "Exclusive of losses from our discontinued second China-Long Beach service, the company's overall performance for the third quarter was relatively consistent with last year's results. We have benefited from the solid performance of our core Hawaii transportation service, improved agribusiness results, and consistent performance from our real estate segments."
Occupancy rates for Mainland commercial real estate were 92 percent, and for Hawaii 91 percent.
Before the 2008 economic downturn, rates were typically 98 percent or better.
* Harry Eagar can be reached at email@example.com.