MATSON, INC. ANNOUNCES THIRD QUARTER 2022 RESULTS

• 3Q22 EPS of $6.89
• 3Q22 Net Income and EBITDA of $266.0 million and $377.4 million, respectively
• Year-over-year lower in consolidated working earnings pushed primarily by decrease quantity in China service
• Repurchased roughly 1.1 million shares in 3Q22
• Signed $1 billion in vessel building contracts for 3 new LNG-ready Aloha Class containerships

HONOLULU, Nov. 2, 2022 /PRNewswire/ — Matson, Inc. (“Matson” or the “Company”) (NYSE: MATX), a number one U.S. service within the Pacific, at this time reported web earnings of $266.0 million, or $6.89 per diluted share, for the quarter ended September 30, 2022.  Net earnings for the quarter ended September 30, 2021 was $283.2 million, or $6.53 per diluted share.  Consolidated income for the third quarter 2022 was $1,114.8 million in contrast with $1,071.6 million for the third quarter 2021.

“Matson’s differentiated ocean services performed well in the third quarter 2022, but the Company achieved lower year-over-year consolidated operating income as we saw lower demand for expedited ocean services in the Transpacific tradelane compared to the high levels of freight demand during the pandemic in the year ago period,” mentioned Chairman and Chief Executive Officer Matt Cox.  “Within Ocean Transportation, our CLX, CLX+ and CCX services achieved lower year-over-year volumes which contributed to the decline in our consolidated operating income.  As we mentioned on our second quarter earnings call, we believed rates had likely peaked in the Transpacific tradelane for this cycle and would be in a transitional decline from the pandemic highs.  Additionally, due to less demand for expedited ocean services and easing port congestion in Southern California, we decided to end our temporary CCX service in early September, about six weeks earlier than expected.  Currently, we expect the next two quarters to be challenging in the Transpacific tradelane as retailers’ inventories adjust to current consumer demand levels and as ocean liners reduce vessel capacity to meet lower demand levels.  To this end, for the remainder of this year and into the first quarter of 2023, we expect to experience lower year-over-year freight demand and a lower rate environment for our CLX and CLX+ services, but we expect to continue to earn a significant rate premium to the Shanghai Containerized Freight Index due to its differentiated, reliable and fast ocean services.”     

Mr. Cox added, “In our domestic ocean tradelanes, we saw continued strength in Alaska with higher year-over-year volume and lower volumes in Hawaii and Guam compared to the year ago period.  The year-over-year decline in Hawaii volume was impacted by the pandemic spike in demand experienced in the year ago period, and volumes for the quarter were higher than the pre-pandemic third quarter of 2019.  In Logistics, operating income increased year-over-year with strength across all of the business lines as we continued to see favorable supply and demand fundamentals in our core markets.”

“Yesterday, we signed $1 billion in vessel construction contracts for three new LNG-ready Aloha Class containerships,” mentioned Mr. Cox.  “We currently anticipate the delivery of the first vessel to be in the fourth quarter of 2026 with subsequent deliveries in 2027.  These Jones Act vessels will be built specifically for our CLX service with state-of-the-art green technology features and a fuel-efficient hull design, and are expected to help Matson achieve its 2030 greenhouse gas emissions goal.  These vessels will also bring additional capacity to the CLX when placed into service, and we expect the additional capacity to be a meaningful contributor to net income, consolidated operating income and EBITDA.”

Third Quarter 2022 Discussion and Update on Business Conditions

Ocean Transportation:  The Company’s container quantity within the Hawaii service within the third quarter 2022 was 7.1 % decrease year-over-year.  The lower was primarily on account of decrease retail-related demand as in comparison with the pandemic spike in demand skilled within the yr in the past interval.  During the quarter, the Company noticed continued enchancment within the Hawaii economy supported by a low unemployment fee and powerful vacationer arrivals, together with an enchancment in worldwide vacationer traits.  In the near-term, Matson expects continued financial progress in Hawaii supported by a comparatively tight labor market and rising tourism visitors, however there are additionally adverse traits from a mixture of financial results that create uncertainty within the financial progress trajectory.  These adverse traits embody weakening financial situations within the U.S. and world economies and decrease family discretionary earnings on account of increased inflation, increased rates of interest and the tip of the pandemic-era stimulus serving to private earnings.

In China, the Company’s container quantity within the third quarter 2022 decreased 15.1 % year-over-year.  The lower was primarily on account of (i) decrease demand for the CLX, CLX+ and CCX providers and (ii) one much less crusing.  Matson continued to appreciate a big fee premium over the Shanghai Containerized Freight Index (“SCFI”) within the third quarter 2022 and achieved common freight charges that have been increased than within the yr in the past interval, however under the pandemic excessive freight charges achieved earlier this yr.  With much less demand for expedited ocean providers and easing port congestion in Southern California, the Company ended its short-term CCX service in early September, about six weeks sooner than anticipated.  Currently, the Company expects the subsequent two quarters to be difficult within the Transpacific tradelane as retailers’ inventories regulate to present client demand ranges and as ocean liners cut back vessel capability to fulfill decrease demand ranges.  To this finish, for the rest of this yr and into the primary quarter of 2023, the Company expects to expertise decrease year-over-year freight demand and a decrease fee atmosphere for its CLX and CLX+ providers, however Matson expects to proceed to earn a big fee premium to the SCFI on account of its differentiated, dependable and quick ocean providers. 

In Guam, the Company’s container quantity within the third quarter 2022 decreased 1.8 % year-over-year primarily on account of decrease retail-related demand.  In the near-term, the Company expects the Guam economy to proceed to learn from a restoration in tourism, however there are adverse traits on account of increased inflation, increased rates of interest and the tip of the pandemic-era stimulus serving to private earnings that creates uncertainty within the financial progress trajectory. 

In Alaska, the Company’s container quantity for the third quarter 2022 elevated 10.6 % year-over-year primarily on account of (i) increased export seafood quantity from Alaska-Asia Express (“AAX”), (ii) increased northbound quantity primarily on account of increased retail-related demand and quantity associated to a competitor’s dry-docking and (iii) increased southbound quantity primarily on account of increased home seafood quantity.  In the near-term, the Company expects the Alaska economy to learn from elevated energy-related exploration and manufacturing exercise on account of elevated oil costs, however there are adverse traits on account of increased inflation, increased rates of interest and the tip of the pandemic-era stimulus serving to private earnings that creates uncertainty within the financial progress trajectory.

The contribution within the third quarter 2022 from the Company’s SSAT three way partnership funding was $23.4 million, or $10.4 million increased than the third quarter 2021.  The enhance was primarily pushed by increased different terminal income.

Logistics:  In the third quarter 2022, working earnings for the Company’s Logistics phase was $20.1 million, or $4.1 million increased in comparison with the extent achieved within the third quarter 2021.  The enhance was due primarily to increased contributions from all providers because the Company continued to see favorable provide and demand fundamentals in its core markets.

Results By Segment

Ocean Transportation — Three months ended September 30, 2022 in contrast with 2021

Ocean Transportation income elevated $55.0 million, or 6.4 %, throughout the three months ended September 30, 2022, in contrast with the three months ended September 30, 2021.  The enhance was primarily on account of increased fuel-related surcharge income, increased common freight charges in China and better quantity in Alaska, partially offset by decrease quantity in China and Hawaii. 

On a year-over-year FEU foundation, Hawaii container quantity decreased 7.1 % primarily on account of decrease retail-related quantity; Alaska quantity elevated 10.6 % primarily on account of (i) increased export seafood quantity from AAX, (ii) increased northbound quantity primarily on account of increased retail-related demand and quantity associated to a competitor’s dry-docking and (iii) increased southbound quantity primarily on account of increased home seafood quantity; China quantity was 15.1 % decrease primarily on account of decrease demand for the CLX, CLX+ and CCX providers and one much less crusing; Guam quantity was 1.8 % decrease primarily on account of decrease retail-related demand; and Other containers quantity elevated 11.1 %.

Ocean Transportation working earnings decreased $46.7 million throughout the three months ended September 30, 2022, in contrast with the three months ended September 30, 2021.  The lower was primarily on account of decrease quantity in China, increased working prices and bills primarily because of the CLX+ service, and better fuel-related bills, partially offset by increased common freight charges in China and a better contribution from SSAT.

The Company’s SSAT terminal three way partnership funding contributed $23.4 million throughout the three months ended September 30, 2022, in comparison with a contribution of $13.0 million throughout the three months ended September 30, 2021.  The enhance was primarily pushed by increased different terminal income.

Ocean Transportation — Nine months ended September 30, 2022 in contrast with 2021

Ocean Transportation income elevated $804.7 million, or 38.2 %, throughout the 9 months ended September 30, 2022, in contrast with the 9 months ended September 30, 2021.  The enhance was primarily on account of increased income in China, increased fuel-related surcharge income, and better income in Alaska.  The increased income in China was primarily on account of significantly increased common freight charges and better quantity.  The increased income in Alaska was primarily the results of increased quantity.

On a year-over-year FEU foundation, Hawaii container quantity decreased 3.2 % primarily on account of decrease retail-related demand; Alaska quantity elevated 13.9 % primarily on account of (i) increased northbound quantity primarily on account of increased retail-related demand and quantity associated to a competitor’s dry-docking, (ii) increased export seafood quantity from AAX and (iii) increased southbound quantity primarily on account of increased home seafood quantity; China quantity was 2.7 % increased on account of seven extra eastbound voyages than the prior yr; Guam quantity was flat; and Other containers quantity elevated 19.9 % primarily because of the addition of China-Auckland Express quantity within the South Pacific.

Ocean Transportation working earnings elevated $524.4 million throughout the 9 months ended September 30, 2022, in contrast with the 9 months ended September 30, 2021.  The enhance was primarily on account of significantly increased common freight charges and better quantity in China and a better contribution from SSAT, partially offset by increased working prices and bills primarily because of the CLX+ and CCX providers and better fuel-related bills.

The Company’s SSAT terminal three way partnership funding contributed $82.1 million throughout the 9 months ended September 30, 2022, in comparison with a contribution of $35.0 million throughout the 9 months ended September 30, 2021.  The enhance was primarily pushed by increased different terminal income.

Logistics — Three months ended September 30, 2022 in contrast with 2021

Logistics income decreased $11.8 million, or 5.7 %, throughout the three months ended September 30, 2022, in contrast with the three months ended September 30, 2021.  The lower was primarily on account of decrease transportation brokerage income, partially offset by increased income in freight forwarding, warehousing and provide chain administration.

Logistics working earnings elevated $4.1 million, or 25.6 %, throughout the three months ended September 30, 2022, in contrast with the three months ended September 30, 2021.  The enhance was primarily on account of increased contributions from all providers.

Logistics — Nine months ended September 30, 2022 in contrast with 2021

Logistics income elevated $78.4 million, or 14.2 %, throughout the 9 months ended September 30, 2022, in contrast with the 9 months ended September 30, 2021.  The enhance was primarily on account of increased transportation brokerage income.

Logistics working earnings elevated $24.6 million, or 70.3 %, throughout the 9 months ended September 30, 2022, in contrast with the 9 months ended September 30, 2021.  The enhance was primarily on account of increased contributions from all providers.

Liquidity, Cash Flows and Capital Allocation

During the third quarter of 2022, Matson deposited $565.0 million in money to the Capital Construction Fund (“CCF”).  Matson’s Cash and Cash Equivalents decreased by $39.6 million from $282.4 million at December 31, 2021 to $242.8 million at September 30, 2022, which excludes the aforementioned money deposited into the CCF.  Matson generated web money from working actions of $1,102.5 million throughout the 9 months ended September 30, 2022, in comparison with $583.3 million throughout the 9 months ended September 30, 2021.  Capital expenditures totaled $113.4 million for the 9 months ended September 30, 2022, in contrast with $244.7 million for the 9 months ended September 30, 2021.  Total debt decreased by $97.2 million throughout the 9 months to $531.8 million as of September 30, 2022, of which $474.5 million was categorised as long-term debt.  During the third quarter of 2022, Matson pay as you go $50.4 million of excellent principal on the 4.16% Prudential Series C-2 notes due 2027 and the 4.31% Prudential Series C-3 notes due 2032, which represented all the remaining principal excellent for each notes.  As of September 30, 2022 Matson had out there borrowings underneath its revolving credit score facility of $642.2 million. 

During the third quarter 2022, Matson repurchased roughly 1.1 million shares for a complete price of $88.4 million.  As of September 30, 2022, the Company had roughly 3.0 million shares remaining in its share repurchase program.

On November 1, 2022, Matson Navigation Company, Inc., a wholly-owned subsidiary of Matson, signed vessel building agreements with Philly Shipyard, Inc. for 3 new LNG-ready Aloha Class containerships.  Each of the brand new 3,600 TEU vessels is anticipated to supply 500 containers of further capability per voyage within the CLX service.  The contract price of this new Jones Act vessel program is anticipated to be roughly $1 billion, and supply of the primary vessel is at the moment anticipated to be within the fourth quarter of 2026 with subsequent deliveries within the second and fourth quarters of 2027.  Upon signing the agreements, the Company made its first milestone cost of $50 million from the CCF.  The Company expects to finance the remaining construction-related funds with money at the moment on deposit within the CCF, money and money equivalents on the stability sheet and thru money flows from operations, borrowings out there underneath the Company’s unsecured revolving credit score facility and extra debt financings.

As beforehand introduced, Matson’s Board of Directors declared a money dividend of $0.31 per share payable on December 1, 2022 to all shareholders of file as of the shut of business on November 10, 2022.

Teleconference and Webcast

A convention name is scheduled on November 2, 2022 at 4:30 p.m. ET when Matt Cox, Chairman and Chief Executive Officer, and Joel Wine, Executive Vice President and Chief Financial Officer, will talk about Matson’s third quarter outcomes.

The convention name might be broadcast dwell together with a further slide presentation on the Company’s web site at www.matson.com, underneath Investors. 

Participants could register for the convention name at:

https://register.vevent.com/register/BId470887075974c638c7f980ef087a60f

Registered individuals will obtain the convention name dial-in quantity and a novel PIN code to entry the dwell occasion.  While not required, it’s endorsed you be part of 10 minutes previous to the occasion beginning time.  A replay of the convention name might be out there roughly two hours after the occasion by accessing the webcast hyperlink at www.matson.com, underneath Investors.   

About the Company

Founded in 1882, Matson (NYSE: MATX) is a number one supplier of ocean transportation and logistics providers.  Matson supplies a significant lifeline to the home non-contiguous economies of Hawaii, Alaska, and Guam, and to different island economies in Micronesia.  Matson additionally operates premium, expedited providers from China to Long Beach, California, supplies service to Okinawa, Japan and numerous islands within the South Pacific, and operates a global export service from Dutch Harbor to Asia.  The Company’s fleet of owned and chartered vessels contains containerships, mixture container and roll-on/roll-off ships and custom-designed barges.  Matson Logistics, established in 1987, extends the geographic attain of Matson’s transportation community all through North America.  Its built-in, asset-light logistics providers embody rail intermodal, freeway brokerage, warehousing, freight consolidation, Asia provide chain providers, and forwarding to Alaska.  Additional details about the Company is offered at www.matson.com.

GAAP to Non-GAAP Reconciliation

This press launch, the Form 8-Okay and the knowledge to be mentioned within the convention name embody non-GAAP measures.  While Matson studies monetary ends in accordance with U.S. usually accepted accounting rules (“GAAP”), the Company additionally considers different non-GAAP measures to guage efficiency, make day-to-day working selections, assist buyers perceive our skill to incur and repair debt and to make capital expenditures, and to grasp period-over-period working outcomes separate and aside from gadgets that will, or may, have a disproportional constructive or adverse impression on ends in any specific interval.  These non-GAAP measures embody, however should not restricted to, Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”) and Net Debt.

Forward-Looking Statements

Statements on this information launch that aren’t historic info are “forward-looking statements,” throughout the that means of the Private Securities Litigation Reform Act of 1995, together with with out limitation these statements relating to efficiency and monetary outcomes, money circulation expectations and makes use of of money and money circulation, Transpacific freight charges and Matson’s fee premium, quantity ranges and demand for Matson’s CLX and CLX+ providers, tourism ranges, unemployment charges, energy-related exploration and manufacturing exercise, financial drivers in Hawaii, Alaska and Guam, financial situations within the U.S. and world economies, inflation, rates of interest, private and discretionary earnings, rail providers, new vessel program and its contributions to web earnings, working earnings and EBITDA, new vessel supply dates, fleet capability and effectivity, new vessel speeds, capital expenditures, the prices and timing of liquified pure gasoline installations on sure vessels, achievement of greenhouse gasoline emissions reductions targets, fleet deployments, vessel transit occasions, natural progress alternatives, timing and quantity of contribution to Capital Construction Fund (“CCF”), timing and quantity of federal and state money tax financial savings, new vessel financing, and share repurchase exercise.  These statements contain plenty of dangers and uncertainties that would trigger precise outcomes to vary materially from these contemplated by the related forward-looking assertion, together with however not restricted to dangers and uncertainties regarding repeal, substantial modification or waiver of the Jones Act or its utility, or our failure to keep up our standing as a United States citizen underneath the Jones Act; adjustments in financial situations or governmental insurance policies, together with from the COVID-19 pandemic; our skill to supply a differentiated service in China for which clients are keen to pay a big premium; new or elevated competitors or enhancements in opponents’ service ranges; our relationship with clients, brokers, distributors and companions and adjustments in associated agreements; gasoline costs, our skill to gather gasoline associated surcharges and/or the associated fee or restricted availability of required fuels; evolving stakeholder expectations associated to environmental, social and governance issues; well timed or profitable completion of fleet improve initiatives; the prevalence of poor climate, pure disasters, maritime accidents, spill occasions and different bodily and working dangers, together with these arising from local weather change; transitional and different dangers arising from local weather change; the magnitude and timing of the impression of public well being crises, together with COVID-19; important working agreements and leases that is probably not changed on favorable phrases; any unanticipated dry-dock or restore bills; the prevalence of any occasion, change or different circumstances that would give rise to the termination of the brand new vessel building agreements; the power of the shipyard to assemble and ship the Aloha class vessels; three way partnership relationships; conducting business in a international delivery market, together with the imposition of tariffs or a change in worldwide commerce insurance policies; any delays or price overruns associated to the modernization of terminals; conflict, terrorist assaults or different acts of violence; consummating and integrating acquisitions; freight ranges and rising prices and availability of truck capability or various technique of transporting freight; relations with our unions; passable negotiation and renewal of expired collective bargaining agreements with out important disruption to Matson’s operations; lack of key personnel or failure to adequately handle human capital; using our data expertise and communication techniques and cybersecurity assaults; adjustments in our credit score profile and our future monetary efficiency; our skill to acquire future debt financings; continuation of the Title XI and CCF applications; prices to adjust to and legal responsibility associated to quite a few security, environmental, and different legal guidelines and laws; and disputes, authorized and different proceedings and authorities inquiries or investigations.  These forward-looking statements should not ensures of future efficiency.  This launch must be learn along side our Annual Report on Form 10-Okay for the yr ended December 31, 2021 and our different filings with the SEC by the date of this launch, which determine vital components that would have an effect on the forward-looking statements on this launch.  We don’t undertake any obligation to replace our forward-looking statements.

SOURCE Matson, Inc.