Hawaii-based ocean cargo carrier Matson Inc. more than doubled its profit last year, largely on expanded China service that included transporting supplies to combat COVID-19 on the mainland.
The company earned $193.1 million last year, up 133 % from $82.7 million the year before, according to a financial report released Tuesday.
Revenue rose by $180 million, or 8 %, to $2.38 billion from $2.20 billion in the same period.
Matson said an 86% increase in cargo for its long-running China service, which it began expanding in May using chartered ships, drove most of the big profit gain.
In Hawaii, Matson’s container volume slipped 0.6% last year from the year before.
This slight decrease for the company that delivers most goods to the state was mainly a result of drastically lower tourism offset by higher demand for sustenance and home improvement goods as well as competitor Pasha Hawaii having one ship out of service for maintenance during one quarter of the year.
Matson also reported delivering 46, 600 automobiles in Hawaii last year, a 26% drop from 62, 900 vehicles the year before.
“Without a doubt, 2020 was a significant year for us, ” Matt Cox, Matson chairman and CEO, told stock analysts on a conference call Tuesday. “I’m proud of our accomplishments in this difficult environment and a year that we will long remember as far from normal.”
The unusual year surprised even Matson, which in January estimated its profit during the last three months of 2020 would be between $76.1 million and $81.6 million. It turned out to be $85.6 mil lion. Fourth-quarter profit a year earlier totaled $15.6 million.
Matson began adjusting to increased demand for service from China in May with a few ship charters that shifted into a weekly serv ice with premium cargo rates driven by strong customer demand for goods including personal protective equipment, cleaning products, home improvement supplies, electronics for working from home and many e-commerce goods.
The company ended up leasing six ships to boost its 15-year-old China service, and in August added stops in Alaska to pick up seafood for delivery in Asia as a way to make better use of ships returning to China from the mainland.
Matson recently said it expects its expanded China service can become permanent even after COVID-19 subsides.
On Tuesday, Cox said the company is going to invest $55 million in containers and truck chassis to support the growth in China service.
Cox also said Matson has extended leases on three of the six chartered vessels for expanded China service into 2022 and another two into 2023. A sixth vessel lease is expected to be extended before June.
“As the pandemic subsides with widespread vaccination, we expect some of the supply and demand factors that we are currently benefiting from to remain and continue to drive demand for our (regular and expanded China ) services, ” Cox said in a written statement.
Hawaii and China are Matson’s two biggest service markets. The company also reported that container volume last year was up 4.6 % in Alaska, down 2.6 % on Guam and up 3.6 % in other service areas that include Okinawa, Japan and various islands in Micronesia and the South Pacific.
Matson also derives income from a cargo terminal joint venture along with transportation brokerage and freight forwarding services.
Shares of Matson stock closed at $73.47 Tuesday before the earnings announcement. That was down from a 52-week high of $75.87 on Monday. The 52-week low was $24.92 on May 15.
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