POSTED: 11:50 a.m. HST, Feb 25, 2014
LAST UPDATED: 1:52 p.m. HST, Feb 25, 2014
Fourth-quarter profit sank by more than half for Matson Inc. due to expenses from a lawsuit over fuel surcharges and a molasses spill in Honolulu Harbor in September.
The Honolulu-based ocean cargo transportation firm reported earning $7.3 million in the October-December period compared with $15.6 million in the same period the year before.
Matson said its core operations were solid and boosted revenue to $411 million in the fourth quarter from $398 million a year earlier.
"Unfortunately, our financial results were impacted by the litigation charge, which while a very difficult decision, was the most prudent path forward," Matt Cox, Matson president and CEO, said in a statement announcing the earnings Wednesday.
The litigation charge amounted to $10 million to settle a lawsuit filed in June in federal court in California by a whistle-blower on behalf of the federal government alleging that Matson submitted or created records supporting false payment claims to the Department of Defense for fuel surcharges assessed on the shipment of military household goods.
Matson said the settlement, which still needs federal government approval, was proposed through nonbinding mediation and approved by the company's board on Sunday.
Regarding the molasses spill, Matson reported $1.7 million in response costs, legal expenses and third-party claims in the fourth quarter.
The charges hurt Matson's full-year profit, though the company still managed to earn more last year, $53.7 million, compared with $45.9 million in 2012.