Horizon Acquisition, Other Factors Impact Matson's Q2 Earnings

The U.S. carrier's result was hit by $13.5 million of costs related to its acquisition of Horizon Lines Inc. and its Alaska operations

Matson Inc. has reported a net income in the second quarter of 2015 of $9.9 million, advising that had it not incurred one time legal and acquisition costs, its Q2 2015 earnings before interest, taxes, depreciation and amortization (EBITDA) would have been $82.8 million, the company reports.

The U.S. carrier cited $13.5 million of additional selling, general and administrative expenses related to its acquisition of Horizon Lines Inc. and its Alaska operations as one reason for the net income results.

It also cited costs of $11.4 million to settle with the State of Hawaii all claims resulting from the discharge of molasses into Honolulu Harbor in September 2013 as another reason for the results.

Matson's net income for the six months ended June 30, 2015 was $34.9 million compared to $21.5 million for Q2 2014; consolidated revenue for the first half of this year was $845.8 million, compared with $828.9 million in the first six months of 2014.

Ocean transportation revenue increased $25.6 million to $346.7 million, or 8.0 percent, during Q2 2015, primarily due to the inclusion of revenue from Matson's Alaska operations as well as "higher freight rates in the company's expedited China service and yield improvements in Hawaii and Guam, partially offset by lower fuel surcharge revenue."

However, Matson reports continued losses in eastbound backhaul freight in Hawaii.

For the second half of this year, the company expects market growth in Hawaii to continue and a maintenance of volume and average freight rates with high vessel utilization levels in China.

As for Alaska, Matson expects container volume "to approximate the 35,000 loads achieved by Horizon in the comparable period in 2014."

Matt Cox, president and chief executive officer for Matson, stated that for the remainder of 2015 he expects ocean transportation operating income to "moderately exceed 2014 levels and we expect our core businesses to continue to generate significant cash flow to pay down debt, fund growth initiatives, including our new vessel investments, and return capital to shareholders."

He also noted that "In Alaska, we're off to a good start and our integration is progressing as planned: we are on track to achieve our earnings and cash flow accretion expectations for this business within two years."

In May, Cox credited lower bunker fuel prices for his company's strong first quarter 2015 financial results, which included a net income of $25 million compared with $3.4 million for Q1 2014.