Maui Land & Pineapple Co. resorted to terminating health and life insurance plans for retirees to help earn a significant profit in the fourth quarter.
The Kahului-based firm announced yesterday that it achieved a $12 million net profit in the last three months of 2010, compared with a net loss of $30.4 million in the same period a year earlier.
The gain was predominantly based on the cuts to retiree benefits as opposed to core operations running Kapalua Resort and developing and selling real estate around the West Maui resort. The cuts resulted in a $16.6 million gain, the company reported.
Unlike previous quarters, Maui Land didn’t break out operating results for its resort and land development divisions. Detailed information on those operations will be included in a subsequent annual report filed with the Securities and Exchange Commission.
The fourth-quarter net profit was the second consecutive quarterly financial gain for Maui Land. A $20 million third-quarter profit was derived largely from recognizing a $26.7 million gain previously deferred from the March 2009 sale of Maui Land’s Kapalua Plantation Golf Course.
For the full year, Maui Land earned $24.8 million. That reversed two years of losses — $123 million in 2009 and $79 million in 2008. Last year’s profit was the most earned by the company in more than a decade.
Much of the gain last year is being used to pay down debt. During 2010 the company reduced its outstanding long-term debt to $45.2 million from $94.2 million.
Maui Land was hit hard by the downturn in financial and real estate markets in recent years, suffering big losses on a luxury time-share and condominium project and pineapple farming. After exiting the pineapple business, absorbing real estate losses and cutting staff and expenses, the company has concentrated on meeting its financial obligations to survive.
Warren Haruki, Maui Land’s chairman and interim chief executive officer, said in a statement that significant challenges remain, though the company is focused on moving ahead under its reorganized business model.
"MLP’s financial results showed continued improvement during 2010 as we strengthened our balance sheet, reduced our overhead costs and resolved several significant legacy obligations," he said.
Shares of Maui Land on the New York Stock Exchange closed yesterday before the earnings announcement at $6.71, down 29 cents from $7 on Thursday.
Maui Land stock has traded in the past 52 weeks between a high of $7.65 on March 29 and a low of $3.33 on July 12.
Based on outstanding shares of stock, Maui Land’s earnings last year equaled $1.99 per share, compared with a $15.33 per-share loss a year earlier.