The recent federal tax overhaul generated a $155 million windfall for the local company that brings most goods to Hawaii by ship.
Matson Inc. announced Tuesday that its profit in the last three months of 2017 ballooned to $167 million due to the tax benefit. In the same quarter the year before, Matson earned $20 million.
Without the tax gain, Matson’s fourth-quarter profit would have been lower. The company reported income before taxes of $19.9 million in the recent quarter, down 35 percent from $30.5 million in the same quarter the previous year.
Revenue for Matson totaled $516 million in the recent quarter, down less than 1 percent from $519 million a year earlier.
| FOURTH-QUARTER NET
$167 million
YEAR-EARLIER NET
$20 million
|
Matt Cox, chairman and CEO of Honolulu-based Matson, said in a statement that the company’s core businesses “performed well” in the fourth quarter, though container volume for Matson’s three biggest service areas — Hawaii, Alaska and China — all were lower.
Matson carried 36,900 containers on ships between Hawaii and the mainland in the fourth quarter, down 11 percent from 41,500 in the same period. The company said the decline primarily was due to less construction- related cargo in the recent quarter and the year-earlier quarter having one more week. Hawaii automobile shipments were about flat.
In Alaska, Matson said its container volume decreased 10 percent to 14,300 containers in the recent quarter from 15,900 a year earlier mainly due to the calendar issue.
Matson’s container volume in China dropped 14 percent to 15,600 in the fourth quarter from 18,200 a year earlier and was largely attributed to the calendar issue and business gained in 2016 due to a competitor’s bankruptcy.
For all of 2017, Matson container volumes were better than the fourth quarter — down 7 percent in Hawaii, down 2 percent in Alaska and up 7 percent in China. Full-year profit totaled $232 million, up from $81 million mainly because of the tax gain. Revenue last year totaled $2.05 billion, up from $1.94 billion the year before.
“Overall, 2017 was a solid year for Matson,” Cox said.
The tax windfall wasn’t in cash, but reduced the value of deferred tax liabilities. Matson’s effective tax rate last year would have been about 40 percent, but changed to minus 85 percent. Matson’s fourth-quarter tax rate was minus 739 percent. This year, Matson estimates its tax rate will be about 28 percent.
Shares of Matson stock closed at $34.39 on Tuesday before the earnings announcement. Shares over the last 52 weeks have traded between a low of $22.79 on Aug. 18 and a high of $37.68 on Jan. 29.
