Matson have reported revenues 3.0% higher in its 2016 financial results. Turnover for the year was $1,942m, with Q4 revenue of $519m, up 5.0% when compared with the same period in 2015. EBITDA for 2016 was down 4.5% to $289m, whilst in Q4 it was down 5.0% year-over-year. The group made a net profit of $80.5m.
Matson completed the purchase of Span Alaska, a shipping and freight forwarding company, on August 4, 2016, meaning Q4 was the first full quarter to include its additional revenues. EBITDA decreases were put down to lower freight rates in China, higher vessel operating expenses in Hawaii in the first half of 2016, unfavourable timing of fuel surcharge collections and higher terminal handling expenses. This was despite additional selling, general and administration expenses in 2015 related to its acquisition of Horizon Lines totalling £30m and a settlement charge totalling $13m. In Q4, Matson believed it was negatively impacted by a surge in bunker fuel prices and the timing of fuel surcharge collections.
Both its ocean transportation and logistics sectors produced revenue growth in the year, with increases of 2.9% and 3.5% respectively. In ocean transportation, Matson saw volume growth in Hawaii (containers up 0.6% and automobiles up 7.4%), Alaska (60.9%) and Micronesia/South Pacific (22.1%), with declines in China (-1.8%) and Guam (-2.7%). In logistics operations, the addition of Span Alaska contributed to higher freight forwarding revenue and intermodal volume.
Matt Cox, Matson’s President and Chief Executive Officer commented: “Matson’s core businesses performed largely as expected in the fourth quarter; however, the quarter was negatively impacted by the increase in bunker fuel prices from mid-November through December. While our full year 2016 financial results failed to match the exceptional results achieved in 2015, when we benefitted from record rates in our expedited China service and volume gains in Hawaii as our primary competitor suffered operational difficulties, 2016 was a year in which we made critical investments for our future. We finalized our Hawaii fleet renewal program by ordering two new Kanaloa Class vessels and we expanded our Logistics platform into Alaska with the acquisition of Span Alaska. Both of these investments are expected to enhance our market leading positions and drive increased profitability and cash flow generation in the years ahead.”
Looking to 2017, Cox added: “For 2017, we expect to see modest improvement in each of our core businesses with the exception of Guam where we expect further competitive losses due to the launch of a competitor’s second ship. As a result, we expect Matson’s 2017 operating income to be lower than it was in 2016.”