A&B had $8.4M loss last year

Alexander & Baldwin Inc. sold 451 condominiums and 611 acres of vacant land last year, but the cost to shut down Hawaii’s last sugar cane plantation pulled company earnings into negative territory for 2016.

The Honolulu firm Tuesday reported an $8.4 million loss last year compared with a $31.1 million profit the year before.

The loss was not unexpected based on company forecasts and financial reports for the first three quarters of last year, though a few extraordinary events besides the shutdown of Hawaiian Commercial & Sugar Co. on Maui also contributed to A&B’s full-year loss.

A&B said after-tax shutdown costs for HC&S totaled $41.1 million last year, up from $29.7 million the year before.

Another extraordinary negative expense of $9.5 million before tax impacts was for examining whether A&B should be converted from a traditional corporation to a real estate investment trust. REITs are required to pass at least 90 percent of their income to shareholders and as a result don’t pay income tax on that amount.

A&B also said it incurred a $15.2 million reduction in the value of some real estate development and joint venture projects, largely because of decisions not to develop or invest further in certain properties.

On the plus side, A&B collected $303.8 million in revenue from completing 451 condominium sales at a tower in Kakaako called The Collection late last year. The company also sold three mainland properties for $60.7 million and 611 acres on Maui for $27.7 million.

A portfolio of Hawaii retail centers and other commercial real estate from which A&B generates rental income produced an operating profit of $54.8 million, while asphalt paving and rock quarry subsidiary Grace Pacific produced an operating profit of $23.3 million.

Revenue from all A&B operations totaled $387.5 million last year, down from $472.8 million the year before. A&B tied part of the decline to having more real estate sales in 2015, when the company sold 329 condos at a Kakaako tower called Waihonua, about 35 vacation home properties on the neighbor islands and several other properties.

Chris Benjamin, A&B president and CEO, said 2016 was a “pivotal year” in the company’s 147-year history, which included 146 years of farming sugar cane.

“Although financial results for the quarter and year were challenged because of the strategic decisions that were made, we are poised for success in 2017 as we complete our REIT evaluation, pursue targeted (commercial real estate) acquisitions in Hawaii, advance several development projects and our Maui diversified agriculture initiatives, and capitalize on our substantial paving backlog at Grace Pacific,” he said in a statement.

Shares of A&B stock closed Tuesday at $44.83 on the New York Stock Exchange before the earnings announcement. On Monday A&B’s stock price was at a 52-week high of $46.10. The 52-week low was $33.52 on Feb. 29, 2016.