Hawaii investment firm Alexander & Baldwin Inc. earned a $9 million first-quarter profit with land sales that offset losses from a struggling road paving and materials subsidiary.
Compared with a year earlier, A&B’s income was down 81%. The Honolulu-based company earned $47 million in last year’s first quarter largely by selling six warehouse, office and retail properties on the mainland.
A&B’s profit in the recent quarter was more in line with the $7 million it earned in the first three months of 2017.
In the recent quarter, A&B’s core business of leasing space in shopping centers and other commercial real estate it owns achieved a nearly flat operating profit: $15.6 million compared with $15.5 million a year earlier.
A&B dramatically boosted its operating profit from sales of what it categorizes as land, which jumped to $12.6 million in the recent quarter from a $5.4 million operating loss a year earlier.
Properties A&B sold in the first quarter included 42 acres of resort land in Wailea, Maui, for $23.6 million and 800 acres of Maui farmland for $6.7 million. A&B also generated $11.2 million by selling one Kahala Avenue lot and 22 units at its Maui condominium project Kamalani, as well as $6.2 million from two other development projects: The Collection condo tower in Kakaako and the Kukui’ula resort housing subdivision on Kauai.
Offsetting some of the gains from these sales was Grace Pacific, which had a $4.5 million operating loss in the recent quarter compared with a $200,000 operating profit a year earlier.
A&B said Grace Pacific, Hawaii’s biggest paving contractor, struggled because of delays on government projects and higher costs from “operational and systems changes.”
Earlier this year A&B slashed the value of Grace Pacific by $78 million because of performance and outlook weakness.
On Monday A&B announced that Grace Pacific President Pike Riegert resigned and was replaced by Jerrod Schreck, A&B’s senior vice president of land stewardship.
A&B bought Grace Pacific in 2013 for $277 million a year after spinning off its then-subsidiary Matson Navigation Co. into a separate company.
Shares of A&B stock closed Thursday at $23.29 on the New York Stock Exchange before the earnings announcement. A&B shares had reached a 52-week high on March 29 at $25.44. The 52-week low was $17.78 on Dec. 20.
FIRST-QUARTER NET
$8.7 million
YEAR-EARLIER NET
$47.4 million
