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ML&P logs $157K 2nd quarter loss

Kapalua company weathering the pandemic for now

Maui Land & Pineapple Co., which logged a $157,000 loss in the second quarter, reported weathering COVID-19 in the quarter, but if the pandemic continues “for an extended period, our future business operations . . . will be significantly affected.”

ML&P, one of the island’s larger land owners with 23,000 acres, released its April-to-June report Tuesday. The net loss actually was less than the $181,000 in the same quarter last year. Total operating revenues were down to $1.7 million, compared to $2.5 million last year.

The company reported less income from commercial properties and from resort amenities due to COVID-19.

The commercial properties’ loss was the result of lower percentage rental income from the commercial leasing portfolio due to the impacts of COVID-19, the quarterly report said. Percentage rental income was about $37,000, compared to $458,000 for the same quarter last year.

“We do not expect any significant amount of percentage rental income for the remainder of 2020,” the company said. “Continued restrictions on public gatherings, such as stay-at-home orders and guidelines, and the threat of COVID-19 or other infectious disease may adversely affect our tenants’ ability to pay.”

The company also noted that its leasing operations “face substantial competition from other property owners in Maui and Hawaii.”

Resort amenity income also took a hit. The company operates the Kapalua Club, which provides members special programs and access and other privileges to amenities at the Kapalua Resort, including a spa and private pool-side dining beach club.

The pandemic restricted access to some facilities and amenities resulting in partial refunds of membership dues, which is expected to continue until the emergency orders are lifted, ML&P said.

The company logged operating income of $15,000 for the sector during the quarter, compared to $40,000 last year.

The closure of the Kapalua Plantation Course for a $10 million renovation project in February 2019 and an increase in golf course rates charged to the company led to increases in operations costs and expenses in the sector, the company said.

In the real estate sector, ML&P reported no sales in the quarter.

However, on July 1, ML&P entered into an office lease and license agreement with Coldwell Banker Island Properties to provide general brokerage services to the area, the company reported. Under the terms of the agreement, the company will collect monthly royalty fees for use of certain trademarks in exchange for a covenant not to compete. ML&P will no longer receive commission income on resales of properties in the Kapalua Resort and surrounding areas.

ML&P reported receiving a $246,000 loan under the federal Paycheck Protection Program in April but chose to return the entire amount following further guidance from federal entities. There were no prepayment penalties.

For the six months ending June 30, ML&P reported a net loss of $1.2 million or 6 cents per share, compared to a net loss of $1.3 million or 7 cents per share in 2019. The company reported total operating revenues of $3.7 million and $4.8 million during the six months ending June 30 this year and in 2019.

In other company updates in the report:

• ML&P is working on leach fields for its Upcountry wastewater treatment facility, which was the subject of a violation order by the state Department of Health over wastewater effluent. The construction, which was approved by the Health Department, is expected to be completed in December.

• The due diligence period on the sale of the Kapalua Central Resort project for $43.9 million to KCRMD LLC has been extended from July 31 to four months after travel restrictions are lifted. The closing date is 30 days after the last day of due diligence.

* Lee Imada can be reached at leeimada@mauinews.com.

** This story has been updated since its original publication on Aug. 13, 2020.

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