The agribusiness sector of Alexander & Baldwin, which is mostly Hawaiian & Commercial Sugar Co. on Maui, logged an operating profit of $7 million for the second quarter, down $1.5 million from the April to June period last year.
The performance of the company's agribusiness was part of Alexander & Baldwin's second quarter report, which showed a $4.4 million net loss, or 10 cents per share. The company showed a net income of $12.3 million, or 29 cents a share, in the same quarter last year.
The company attributed the loss to costs associated with the separation of Matson from A&B. Revenue for the second quarter was $72.4 million, compared to $73.2 million last year.
"As previously reported, we successfully completed the separation of Alexander & Baldwin Inc. and Matson Inc. at the end of the second quarter, which created two Hawaii-based companies, each with a market capitalization of over a billion dollars," said Stanley M. Kuriyama, chairman and chief executive officer of Alexander & Baldwin, in a news release Wednesday. "Notwithstanding the focus on separation and the resultant impact on financial results, our operations performed well in the quarter, with a number of positive milestones achieved in our development and sales segment, coupled with steady operating performance in our leasing and agribusiness segments."
In its highlights of the second quarter, A&B cited the state Land Use Commission approval in May of the reclassification of 545 acres from agriculture to urban for its Waiale master-planned community. Plans call for 2,250 homes, commercial areas, a middle school, public facilities and parks in an area bisected by East Waiko Road with Kuihelani Highway to the east and Honoapiilani Highway and Waikapu to the west.
The company is now turning to obtaining county zoning for the project, the news release said.
The real estate development sector logged a loss of $9.9 million for the quarter, compared with a $10.6 million profit for the quarter last year. The company took a hit for three development projects in Santa Barbara and Bakersfield, Calif., "that are unlikely to be developed in light of the company's strategic decision to focus primarily on development of Hawaii real estate," the news release said. Those properties are currently vacant land.
The losses also were affected by the variability in the timing of sales closings, the news release said.
One bright spot was the sale of a 4.1 acre parcel to Costco in the Maui Business Park II that netted the company $3.7 million. The company's total revenue of $7 million in real estate development was "principally related to the sale," the news release said.
In the agribusiness sector, the lower revenue was related to lower pricing for its sugar shipments, the release said.
"While the company expects that full-year sugar pricing and volumes in 2012 will be similar to 2011, quarterly results are affected by the quantity of sugar shipped and the pricing of individual vessel loads," the release said. "The company sold a similar amount of sugar in the second quarter of 2012 as it did in 2011. However, it received higher pricing on a vessel-load shipped in the second quarter of 2011."
Total sugar produced was 57,500 tons, compared to 67,700 in the quarter in 2011, but the total bulk raw sugar sold was 36,000 tons in the second quarter, only 300 tons less than the 2011 quarter.
Alexander & Baldwin, www.alexanderbaldwin.com.