- Expects 2Q23 operating income for Ocean Transportation to be
$78.0 to $83.0
million
- Expects 2Q23 operating income for Logistics to be $13.5 to $14.5
million
- Expects 2Q23 net income and diluted EPS to be $76.3 to $81.5
million and $2.14 to
$2.28, respectively
- Year-over-year decrease in consolidated operating income driven
primarily by lower contribution from China service
- Repurchased approximately 0.6 million shares in 2Q23
- Announces second quarter earnings call date on August 1, 2023
HONOLULU, July 20,
2023 /PRNewswire/ -- Matson, Inc. ("Matson" or the
"Company") (NYSE: MATX) today announces preliminary second quarter
financial results, provides a business update and announces that
its second quarter earnings call will be held on August 1, 2023.
"Matson's Ocean Transportation and Logistics business segments
performed well despite a challenging business environment and
sluggish economic growth," said Chairman and Chief Executive
Officer Matt Cox. "Within
Ocean Transportation, our China
service saw higher sequential quarterly freight demand but
generated lower year-over-year volume and freight rates, which were
the primary contributors to the year-over-year decline in our
consolidated operating income. Currently in the Transpacific
marketplace, we are seeing modest reductions in deployed capacity
and retail inventories are in a relatively better position than
earlier in the year, but retailers continue to carefully manage
inventory levels in the face of lower consumer demand. We
further expect the tradelane to experience a muted peak season, but
for Matson, we expect our China
service to be near full during the traditional peak season.
Absent an economic 'hard landing' in the U.S., we continue to
expect trade dynamics to gradually improve for the remainder of the
year as the Transpacific marketplace transitions to a more
normalized level of consumer demand and retail inventory stocking
levels. Regardless of the economic environment, we expect to
continue to earn a significant rate premium to the Shanghai
Containerized Freight Index reflecting our fast and reliable ocean
services and unmatched destination services."
Mr. Cox added, "In our domestic ocean tradelanes, we saw lower
year-over-year volumes in Hawaii,
Alaska and Guam compared to the year ago period.
The year-over-year decline in Hawaii volume was primarily due to lower
retail-related volume. The year-over-year volume declines in
Guam and Alaska were primarily driven by lower general
demand and lower seafood volume, respectively. In Logistics,
operating income decreased year-over-year primarily due to lower
contributions from transportation brokerage and supply chain
management. As a result, Matson expects second quarter
operating income for Ocean Transportation of $78.0 to $83.0 million and Logistics operating income
of $13.5 to $14.5 million. We also expect second
quarter 2023 net income and diluted EPS to be $76.3 to $81.5 million and $2.14 to $2.28,
respectively."
Second Quarter Tradelane Volume (Forty-foot equivalent units
(FEU)) (1)(2):
For the three months ended June 30,
2023 compared to the three months ended June 30, 2022 and on a FEU basis:
- Hawaii container volume
decreased 7.1 percent primarily due to lower retail-related
volume;
- Alaska container volume
decreased 7.2 percent due to (i) lower export seafood volume from
the Alaska-Asia Express service ("AAX"), (ii) lower northbound
volume due to one less sailing and (iii) lower southbound volume
primarily due to lower household goods and domestic seafood
volume;
- China container volume was
24.6 percent lower primarily due to (i) CCX volume in 2Q22 (CCX
service was discontinued in 3Q22), (ii) lower capacity in the CLX
due to the dry-docking of Daniel K.
Inouye and (iii) one less CLX+ sailing;
- Guam container volume was 7.5
percent lower primarily due to lower general demand; and
- Other container volume decreased 29.0 percent.
(1)
|
Approximate volumes
included for the period are based on the voyage departure date, but
revenue and operating income are adjusted to reflect the percentage
of revenue and operating income earned during the reporting period
for voyages in transit at the end of each reporting
period.
|
(2)
|
Other containers
includes containers from services in various islands in Micronesia
and the South Pacific, and Okinawa, Japan.
|
Liquidity, Debt and Share Repurchases
Matson's cash and cash equivalents as of June 30, 2023 was approximately $120.0 million, which excludes $583.9 million in cash on deposit within the
Capital Construction Fund (CCF). Total debt as of
June 30, 2023 was $462.4 million.(3) During the
second quarter of 2023, Matson made an approximately $50.0 million milestone payment from the CCF as
part of the new vessel build program.
During the second quarter of 2023, Matson repurchased
approximately 0.6 million shares for a total cost of
$42.4 million. As of
June 30, 2023, the Company had approximately 3.3 million
shares remaining in its share repurchase program.
A slide presentation that accompanies this press release is
available on the Company's website at www.matson.com, under
Investors.
(3)
|
Total debt is presented
before any reduction for deferred loan fees as required by
GAAP.
|
Teleconference and Webcast
A conference call is scheduled on August
1, 2023 at 4:30 p.m. ET when
Matt Cox, Chairman and Chief
Executive Officer, and Joel Wine,
Executive Vice President and Chief Financial Officer, will discuss
Matson's second quarter results.
Date of Conference
Call:
|
Tuesday, August 1,
2023
|
Scheduled
Time:
|
4:30 p.m. ET / 1:30
p.m. PT / 10:30 a.m. HT
|
The conference call will be broadcast live along with an
additional slide presentation on the Company's website at
www.matson.com, under Investors.
Participants may register for the conference call at:
https://register.vevent.com/register/BI2405370e930a41939d6774bd4e7cc3dc
Registered participants will receive the conference call dial-in
number and a unique PIN code to access the live event. While
not required, it is recommended you join 10 minutes prior to the
event starting time. A replay of the conference call will be
available approximately two hours after the event by accessing the
webcast link at www.matson.com, under Investors.
About the Company
Founded in 1882, Matson (NYSE: MATX) is a leading provider of
ocean transportation and logistics services. Matson provides
a vital lifeline of ocean freight transportation services to the
domestic non-contiguous economies of Hawaii, Alaska, and Guam, and to other island economies in
Micronesia. Matson also operates premium, expedited services
from China to Long Beach, California, provides service to
Okinawa, Japan and various islands
in the South Pacific, and operates an international export service
from Dutch Harbor to Asia.
The Company's fleet of owned and chartered vessels includes
containerships, combination container and roll-on/roll-off ships
and custom-designed barges. Matson Logistics, established in
1987, extends the geographic reach of Matson's transportation
network throughout North America
and Asia. Its integrated, asset-light logistics services
include rail intermodal, highway brokerage, warehousing, freight
consolidation, supply chain management, and freight forwarding to
Alaska. Additional information about the Company is available
at www.matson.com.
Forward-Looking Statements
Statements in this news release that are not historical facts
are "forward-looking statements," within the meaning of the Private
Securities Litigation Reform Act of 1995, including without
limitation those statements regarding performance and financial
results; retail inventories; deployed capacity in the Transpacific;
consumer demand; Matson's capacity utilization in the peak season;
economic uncertainty; trade dynamics; and Matson's rate premium to
the Shanghai Containerized Freight Index. These statements
involve a number of risks and uncertainties that could cause actual
results to differ materially from those contemplated by the
relevant forward-looking statement, including but not limited to
risks and uncertainties relating to repeal, substantial amendment
or waiver of the Jones Act or its application, or our failure to
maintain our status as a United
States citizen under the Jones Act; changes in macroeconomic
conditions, geopolitical developments, or governmental policies,
including from the COVID-19 pandemic; our ability to offer a
differentiated service in China
for which customers are willing to pay a significant premium; new
or increased competition or improvements in competitors' service
levels; our relationship with customers, agents, vendors and
partners and changes in related agreements; fuel prices, our
ability to collect fuel-related surcharges and/or the cost or
limited availability of required fuels; evolving stakeholder
expectations related to environmental, social and governance
matters; timely or successful completion of fleet upgrade
initiatives; the ability of Philly Shipyard to construct and
deliver the new Aloha Class vessels on the contemplated timeframe;
the occurrence of poor weather, natural disasters, maritime
accidents, spill events and other physical and operating risks,
including those arising from climate change; transitional and other
risks arising from climate change; the magnitude and timing of the
impact of public health crises, including COVID-19; significant
operating agreements and leases that may not be replaced on
favorable terms; any unanticipated dry-dock or repair expenses;
joint venture relationships; conducting business in foreign
shipping markets, including the imposition of tariffs or a change
in international trade policies; any delays or cost overruns
related to the modernization of terminals; war, terrorist attacks
or other acts of violence; consummating and integrating
acquisitions; relations with our unions; satisfactory negotiation
and renewal of expired collective bargaining agreements without
significant disruption to Matson's operations; loss of key
personnel or failure to adequately manage human capital; the use of
our information technology and communication systems and
cybersecurity attacks; changes in our credit profile and our future
financial performance; our ability to obtain future debt
financings; continuation of the Title XI and CCF programs; costs to
comply with and liability related to numerous safety,
environmental, and other laws and regulations; and disputes, legal
and other proceedings and government inquiries or
investigations. These forward-looking statements are not
guarantees of future performance. This release should be read
in conjunction with our Annual Report on Form 10-K for the year
ended December 31, 2022 and our other
filings with the SEC through the date of this release, which
identify important factors that could affect the forward-looking
statements in this release. We do not undertake any
obligation to update our forward-looking statements.
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SOURCE Matson, Inc.