US-based container carrier Matson reported a 40 percent drop in its net income for the quarter ended September 30, 2016, due to lower freight volumes.
The company’s net income fell to USD 25 million in the third quarter of this year from USD 41.5 million recorded in the same quarter last year.
Moreover, consolidated revenue for the third quarter 2016 was USD 500.4 million against USD 544.3 million reported for the three-month period last year.
The company’s third quarter 2016 Hawaii container volume declined year-over-year, “due to the moderation of competitive gains and a lull in the market.”
In China, the Matson’s container volume in the third quarter 2016 was slightly lower year-over-year, as continued market softness in the first two months of the quarter was partially offset by increased demand for the company’s expedited service offering related to the market dislocation that followed Hanjin Shipping’s bankruptcy filing.
Container volume in the third quarter 2016 in Guam was modestly lower on a year-over-year basis. According to Matson, it is the result of competitive losses to a bi-weekly US flagged containership service that commenced in January 2016.
Alaska volume was lower than expected due to energy sector related macroeconomic headwinds and lower seafood harvest in 2016.
“Despite these challenges, we are encouraged by the strong demand for our highly differentiated expedited China service and our steady performance in Guam,” Matt Cox, Matson’s President and Chief Executive Officer said.
For the nine months ended September 30, 2016, Matson reported a net income of USD 61.1 million, against USD 76.4 million in 2015.
Additionally, the company’s consolidated revenue for the nine-month period ended September 30, 2016, was USD 1,422.3 million, compared to USD 1,390.1 million in 2015.
In its outlook for the fourth quarter of 2016, the company expects its Hawaii container volume to be lower than the fourth quarter 2015, which benefitted from volume gains associated with a competitor’s service reconfiguration and related issues.
For the fourth quarter of 2016, the company expects the ongoing muted economic activity in Alaska to result in container volume that approximates the level achieved in the fourth quarter 2015.
“For the balance of 2016, we expect our core businesses to continue generating strong cash flow which, combined with available capacity under our USD 400 million revolving credit facility and additional debt financings, will provide for our fleet renewal investments and the return of capital to shareholders,” Cox said.