Maui News

A&B Net Income is Down Two-Thirds in 2009

February 3, 2010, 4:04 PM HST
* Updated February 4, 9:31 AM
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Posted by Wendy Osher

Earnings at Alexander & Baldwin, Inc. (NYSE:ALEX) for 2009 were down about two thirds from the previous year.  Net income for the company dropped from $132.4 million in 2008 to just $44.2 million in 2009.

Meantime, revenue for the full year 2009 was $1,404.8 million, compared to revenue of $1,879.8 million for the full year 2008.

Company president and CEO Stan Kuriyama said, “The Company’s modest profit in 2009 was hard earned in a very difficult operating environment for all of our lines of business.”

The company’s agribusiness segment reported continued struggles with drought-induced lower yields in its core sugar operations.  A&B also received lower rates for power it produced and sold to the electric utilities on Maui and Kauai.

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“Increases in domestic sugar prices and improving yield forecasts have positioned Agribusiness for a major improvement in 2010. Adequate access to irrigation water must be maintained to ensure ongoing operating viability over the longer term,” said Kuryiama.

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Kuriyama said the cost cutting actions taken in the past two years, well positions the company in 2010 as markets begin to recover.

Kuriyama said, “Despite the challenging earnings environment, the Company generated positive operating cash flow, while improving its overall financial condition. While some of 2009’s economic challenges will persist throughout 2010, the Company is much better positioned to create near-term earnings growth and long-term value in a more stabilized environment.”

In the company’s Ocean Transportation sector, Kuriyama said there should be benefits as volumes stabilize in the key Hawaii trade and prices firm in the China trade.  He did note there may be challenges in achieving historical margins at lower volume levels.

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The report further noted that Logistics Services should similarly benefit from some recovery in domestic volumes and rates.

In the Real Estate sector, the company anticipates leasing to be challenged with lower revenues due to lower rents and occupancies, and higher depreciation related to newly acquired properties.  Despite the challenges, A&B anticipates continued generation of significant cash net operating income.

“As economic growth returns, we are confident that the Company’s capital resources to support new investments, and strong franchises and market positions in our shipping and real estate businesses, will result in shareholder value creation and earnings growth in 2010 and beyond,” said Kuriyama.

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