Matson, Inc (MATX) has reported a 39.76 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $25 million, or $0.58 a share in the quarter, compared with $41.50 million, or $0.94 a share for the same period last year.
Revenue during the quarter dropped 8.07 percent to $500.40 million from $544.30 million in the previous year period. Total expenses were 90.77 percent of quarterly revenues, up from 86.81 percent for the same period last year. That has resulted in a contraction of 396 basis points in operating margin to 9.23 percent.
Operating income for the quarter was $46.20 million, compared with $71.80 million in the previous year period.
Matt Cox, Matson’s president and chief executive officer, commented, “Matson's third quarter results came in below our expectations. In Hawaii, there was a lull in container volume following healthy market growth in the first half of the year. In Alaska, energy sector related macroeconomic headwinds and a lower seafood harvest drove Matson’s container volume below our expected levels. Despite these challenges, we are encouraged by the strong demand for our highly differentiated expedited China service and our steady performance in Guam. We made sizeable investments during the quarter that underscore our commitment and confidence in the long-term prospects for both Hawaii and Alaska. Our acquisition of Span Alaska significantly expanded Matson Logistics' platform into freight forwarding and solidified Matson's position as a critical freight transportation provider to Alaska. Following that we ordered two new ConRo ships, the Kanaloa Class, for delivery by mid-2020, that along with our Aloha Class containerships already under construction, will complete the renewal of our Hawaii fleet and allow for an optimal nine-ship deployment with significantly lower operating costs while ensuring superior reliability.”
Operating cash flow drops significantly
Matson, Inc has generated cash of $87.50 million from operating activities during the nine month period, down 44.97 percent or $71.50 million, when compared with the last year period.
The company has spent $328 million cash to meet investing activities during the nine month period as against cash outgo of $38.80 million in the last year period.
Cash flow from financing activities was $231.40 million for the nine month period as against cash outgo of $388.10 million in the last year period.
Cash and cash equivalents stood at $16.40 million as on Sep. 30, 2016, down 35.69 percent or $9.10 million from $25.50 million on Sep. 30, 2015.
Working capital drops significantly
Matson, Inc has witnessed a decline in the working capital over the last year. It stood at $20.20 million as at Sep. 30, 2016, down 59.76 percent or $30 million from $50.20 million on Sep. 30, 2015. Current ratio was at 1.07 as on Sep. 30, 2016, down from 1.17 on Sep. 30, 2015.
Days sales outstanding went down to 21 days for the quarter compared with 39 days for the same period last year.
Debt increases substantially
Matson, Inc has witnessed an increase in total debt over the last one year. It stood at $812.40 million as on Sep. 30, 2016, up 68.72 percent or $330.90 million from $481.50 million on Sep. 30, 2015. Total debt was 39.19 percent of total assets as on Sep. 30, 2016, compared with 27.72 percent on Sep. 30, 2015. Debt to equity ratio was at 1.77 as on Sep. 30, 2016, up from 1.12 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 7.70 for the quarter from 15.28 for the same period last year.
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