Hawaii’s largest ocean cargo carrier, Matson Inc., has increased its capacity to borrow money in the face of increasing economic uncertainties tied to the coronavirus pandemic.
The Honolulu-based company announced Monday that it amended borrowing agreements with lenders last week so that it can take on more debt through the end of 2021. In return for the additional debt capacity, Matson will pay higher returns to the lenders.
Matson also provided an early income estimate Monday for the first three months of this year, and withdrew a prior rough forecast for full-year earnings.
The company said its income for the first quarter, ended March 31, should be between $2 million and $5 million.
Matson earned $12.5 million during the same period last year.
Matt Cox, company chairman and CEO, said in a statement that cargo volume from January to March was relatively steady in the company’s Hawaii, Alaska and Guam trade lanes, in part because of consumer home food and essential goods buying.
Cox also said Matson’s China service returned to a normal volume level in March but that the company had challenges in a joint-venture terminal services business and a division that coordinates ground transportation and other logistics for customers.
“Matson’s businesses performed well in the first quarter,” Cox said.
As the company begins the second quarter, Cox said, operations in Hawaii, Guam and Alaska face impacts and challenges from dramatically reduced tourism and increasing economic uncertainties related to COVID-19.
Because of that, Matson withdrew a prior 2020 financial forecast but intends to provide an update on its businesses in early May during a conference call with stock analysts after release of a detailed financial report covering the first quarter.
“Our top operational priorities in this rapidly deteriorating environment are to safeguard the health and safety of our employees and to maintain our best-in-class vessel on-time performance in order to serve our customers and the communities that continue to rely on us during this difficult time,” Cox said.