Alexander & Baldwin doubles yearly earnings
A stagnant fourth quarter is outweighed by ocean cargo service, real estate sales and sugar operations

By Andrew Gomes
Article from: Star-Advertiser

Alexander & Baldwin Inc. profit was flat in the last three months of 2010, but bigger gains earlier in the year enabled the diversified Honolulu-based company to more than double full-year earnings.

Fourth-quarter net $20.2 million

Year-earlier net $20.1 million

A&B reported 2010 net income of $92.1 million, up from $44.2 million the year before. The gain came on revenue of $1.6 billion, compared with $1.4 billion in the same comparable period.

Fourth-quarter net income was $20.2 million, barely up from $20.1 million in the 2009 fourth quarter. Revenue for the same period totaled $461.4 million, up from $362.9 million.

Profits for the quarter and year were principally driven by ocean cargo service from China by subsidiary Matson Navigation Co., real estate sales and a turnaround in Maui sugar cane operations.

Stan Kuriyama, A&B president and chief executive officer, characterized last year’s earnings as a rebound from 2009 and said he expects improved results this year as the economy strengthens.

“We begin 2011 with an improving economic environment in Hawaii and on the mainland,” he said in a statement. “Hawaii has been led by major gains in the visitor industry, which contributed to higher employment levels and real personal income. These emerging signs of economic recovery are encouraging and provide us with greater confidence for continued improvement in 2011.”

The biggest chunk of operating profit for A&B in the fourth quarter came from real estate sales that included an industrial complex in California and unimproved land on Maui.

Operating profit from property sales totaled $17.8 million, down from $20.4 million a year earlier when the company sold the Honolulu office building Pacific Guardian Tower, a California retail center and several unimproved parcels on Maui.

In A&B’s real estate leasing division, fourth-quarter operating profit was lower than a year earlier — $8.4 million compared with $10 million — because of lower tenant rents and changes in the property portfolio from sales and acquisitions.

Average occupancy at A&B Hawaii properties in the quarter was 91 percent, down from 95 percent a year earlier. The decline was due in part to A&B’s acquisition last year of a Kapolei industrial complex that is 74 percent occupied. Occupancy for A&B’s mainland property portfolio was 86 percent, up from 83 percent.

At Matson, fourth-quarter operating profit was $11.6 million, down from $13.5 million a year earlier. The decrease was largely due to $19 million in start-up losses for a new China-California cargo service using leased vessels. Higher fuel costs also contributed to the reduced operating profit, A&B said.

Matson container volume to Hawaii was up 8 percent to 37,100 in the fourth quarter from 34,200 a year earlier, but the gain reflected an extra week in Matson’s 2010 fiscal year.

Hawaii automobile shipments slipped in the quarter to 19,800 from 20,600 a year earlier, which A&B said was principally due to the timing of rental car replacements.

A potential big expense for Matson this year could be replacing two interisland barges, though A&B said it hasn’t made a decision. The company has budgeted $45 million as a potential partial payment for the barges this year should it make the move.

A&B expects its China service to be the main driver of better Matson returns this year given that Hawaii’s economy and construction industry are forecast to modestly improve.

The only A&B division to increase operating profit in the fourth quarter was agribusiness, with a $4.6 million return that compared with an $800,000 loss a year earlier. The reversal was primarily due to subsidiary Hawaiian Commercial & Sugar Co. achieving higher production, sales and prices.

A&B projects sustained profitability from its sugar operations this year. The company also expects improved financial results to come from a deal announced in December to turn over its Kauai Coffee Co. to global premium coffee seller Massimo Zanetti Beverage Group of Italy.

The deal, which involves Massimo Zanetti buying the Kauai Coffee brand, leasing A&B’s plantation and retaining all employees, is expected to close in March.

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Kaiwahine Village back on agenda
Time ran out on project under last council

February 3, 2011 – By BRIAN PERRY, City Editor
Article from: Maui News

WAILUKU – The Kaiwahine Village affordable housing project is expected to be resubmitted to the Maui County Council today.

The action follows the council’s rejection of the north Kihei project in December. After elections in November, members of the council’s Public Services Committee voted unanimously to reject the project without getting a presentation from its developers or hearing any information on its merits.

Panel members said there wasn’t enough time late last year to evaluate the project, and members of the new council should have the opportunity to review it.

On Wednesday, John Sindoni, owner and managing partner of developer Royal Main LLC, called the council’s refusal to review the project in December a “debacle,” particularly since the council had been “putting us off” since last summer.

“They wouldn’t even let us speak,” he said. “Members of the new council are raring to go. We’re really looking forward to working with them.”

Now, he said, the administration of Mayor Alan Arakawa has “stepped up” to try to help the project gain approval.

“I feel the administration has really jumped to our rescue,” he said. “We’re looking forward to doing something really wonderful for the affordable housing community.”

The submittal today begins a 45-day period for the council to consider the project, which is being processed as a fast-track development under state law. Projects with more than 50 percent affordable homes can get exemptions to state and county land use and other regulations under state law. Such projects must come before county councils for review.

The council’s Land Use Committee, chaired by Council Member Bob Carroll, already has scheduled a meeting Feb. 16 for members to hear a presentation on the project, according to planning consultant Chris Hart. The deadline for council action would be March 21, he said.

The Kaiwahine project would be similar to existing developments such as Iao Parkside, Kihei Villages and Southpointe in Kihei, he said.

Carroll said he expected the council would take action on the Kaiwahine development before the Arakawa administration submits its budget proposal in mid-March.

Within the 45-day time frame, the council can approve, disapprove or approve the project with conditions, he said. If the council doesn’t act in time, the project would be approved as submitted.

Carroll said Wednesday that he had been briefed “for a few minutes” on the project by the developer and by officials in the county’s Department of Housing and Human Concerns.

While Carroll said he knows broadly about the project, he had yet to receive detailed information.

“I don’t have a lot of background on it,” he said.

Sindoni said he’s aware that neighbors in the Hale Piilani Subdivision have concerns about traffic congestion.

Developers have worked on a couple of solutions aimed at getting motorists to avoid using the narrow Hale Kai Street and travel instead down Kaiwahine Street, a wider collector road more capable of handling higher volumes of traffic, he said.

The project aims to be a good neighbor, Sindoni said.

“We want to make it work for everybody,” he said.

Hart said the project’s primary vehicle access would be off of Kaiwahine Street.

Traffic mitigation plans include developing a roundabout in which the intersection of Hale Kai and Kaiwahine streets would be redesigned to allow traffic going toward the development to come from Hale Kai but to depart only via Kaiwahine.

Hart said the project also would bring some improvements to domestic water transmission, upgrading water pressure for the area.

The Kaiwahine Village is planned as a 120-unit multifamily project with a mix of one-, two- and three-bedroom units in 15 buildings on 9.3 acres. Unit prices are expected to range from $185,000 for a one-bedroom unit to $245,000 for three bedrooms, Sindoni said.

Plans also call for building landscaped walkways to nearby Hale Piilani Park, which would be improved at the developer’s expense with better irrigation and the planting of new grass and shade trees, he said.

An irrigation well would be drilled to provide water for all landscaped areas, including the park, he said.

Sindoni said his company bought the project property from Nitto International nearly six years ago.

Hawaiian Airlines earnings double
Nonrecurring items aid fourth-quarter profits

By Dave Segal
STAR-ADVERTISER

Hawaiian Airlines posts its 11th straight quarterly profit as nonrecurring items help earnings double to $70.6 million.
Hawaiian Airlines’ parent, which is targeting Asia for growth, doubled its earnings in the October-December quarter as increased seating capacity, nonrecurring tax adjustments and opportunistic fuel hedging helped the state’s largest carrier post its 11th straight profitable quarter.

In a quarter that featured profits by nearly all U.S. carriers, Hawaiian Holdings Inc. continued the trend with net income that surged 101.5 percent to $70.6 million, or $1.36 a share, from $35 million, or 66 cents a share, a year ago.

“These fourth-quarter results round out another good year for Hawaiian Airlines,” said President and CEO Mark Dunkerley of the carrier’s third straight profitable year. “In 2010 our strong financial performance enabled us to start service on two new international routes (to Japan and South Korea), take delivery of the first three of 16 new Airbus wide-body aircraft and replace our expiring credit facilities on favorable terms. At the start of 2011, we are well positioned to continue to grow into the rapidly developing travel market in Asia.”

Dunkerley said Hawaiian will add service to another yet-to-be-named city later this year. Chief Financial Officer Peter Ingram said last month that Hawaiian likely will announce another flight to Asia, most likely to Japan.

“These new services (to Tokyo and South Korea) are the beginning of what we anticipate will be a broader expansion of our business westward over the next several years,” he said. “Our focus on adding the service between Asia and Hawaii is simply explained: Asia is where the growth is. Our service to Tokyo positions us in Hawaii’s most significant international source of visitors and lays the foundation for further expansion in Japan.”

Hawaiian’s fourth-quarter earnings benefited from $56.9 million in nonrecurring tax benefits. Hawaiian had a similar benefit of $25 million in the fourth quarter of 2009. Hawaiian also benefited from $2.4 million in unrealized gains from fuel hedging or locking in oil prices before they rose higher. Hawaiian’s fuel-hedging benefit in the year-earlier quarter was $436,000.

Despite the hedging, aircraft fuel costs last quarter rose 27 percent to $89.7 million from $70.6 million in the year-earlier period and represented 29.7 percent of operating expenses.

Excluding the tax benefits and fuel hedging, Hawaiian’s net income increased 7.7 percent to $11.3 million, or 21 cents a share, versus $10.5 million, or 20 cents a share, from the year-ago period. Analysts were expecting 18 cents a share. Revenue jumped 15.7 percent to $343.8 million from $297 million as seating capacity increased 11.7 percent.

Hawaiian’s stock rose 24 cents yesterday, or 3.25 percent, to $7.63. The earnings were released after the market closed.

Analyst Bob McAdoo of Avondale Partners LLC said it was another solid quarter for Hawaiian.

“It’s a reflection on management that this is a company that continues to be profitable and make good money when they’re getting more and more competition from the mainland like from Alaska, Continental and other guys,” McAdoo said. “They’re making money not because Aloha and ATA disappeared (in the spring of 2008), but because they’re able to compete with the legacy carriers coming up from the mainland. … They’re making money because they’re running a good business.”

Nicklaus, Watson defend Skins title
Tandem collects $310,000 to edge O’Meara, Langer

By MATTHEW CARROLL
Article from: The Maui News

KAANAPALI – Practice makes perfect, even for Jack Nicklaus.

Fresh off a two-month stretch of what he called “awful” golf, Nicklaus fired a 6-iron from 137 yards to within 12 feet on the par-3 17th hole and Tom Watson converted the $250,000 birdie putt Sunday as the legendary duo pocketed $310,000 en route to becoming the first tandem to successfully defend its title at the Kaanapali Champions Skins Game.

The pair of Hall of Famers captured the opening two skins on Saturday at the Royal Kaanapali Course and waited patiently over the ensuing 14 holes before the Golden Bear picked the perfect time to pounce, nearly duplicating his best shot of the opening round and locking up the team’s third crown together with seven skins.

“Skins game is a funny game. After birdieing the second hole yesterday, we were hanging in there, we really didn’t do much,” said Nicklaus, owner of a record 18 major championships. “Today we were just sort of hanging around, not really competing. All of sudden, 17, boom! That’s what the game is.

“I’m glad I picked the right hole to make the right shot and I’m glad Tom took the right hole to make the right putt.”

First-round leaders Bernhard Langer and Mark O’Meara were left with $300,000 and seven skins, including the $100,000 “superskin” on the second playoff hole, after Langer’s 15-footer lipped out on the 17th. Fred Couples and Nick Price won two skins and $80,000, as did Ben Crenshaw and Fuzzy Zoeller.

“I’m disappointed that we didn’t win, but Jack hit an amazing shot off the 17th hole after I hit a pretty good one, and the hole was playing pretty tough,” O’Meara said. “He hit a world-class shot and Tom made a world-class putt.”

That’s a far cry from where Nicklaus deemed his game to be recently.

The 71-year old doesn’t hit the links that much anymore – “If I play 10 rounds of golf between now and the time I get back here next year I’ll be just absolutely amazed,” he said – but managed to sneak in a handful of holes during a two-month stretch in Florida prior to his arrival on the Valley Isle.

The greatest golfer of all time is one of few who can call three 78s, a 76 and a 72 “just terrible.”

“I even came out and practiced for the first time in five years,” Nicklaus said. “I hadn’t practiced in five years, where I actually went out to try and practice.

“I was on the verge of hitting the ball decently when I came out here, and actually I really started hitting the ball here.”

It showed Saturday, when he landed a 5-iron from 185 yards within three feet for two skins, and it was evident Sunday, too, never more so than on the final par 3.

“It may be surprising to some, it may be surprising to him, but it’s typical Jack in the way that he looks at his golf game,” said Watson, an eight-time major champion who also won with Nicklaus in 2007. “He looks at it very pragmatically, as I do. That’s why we like each other, ’cause we look at the game very pragmatically.

“He said, ‘When I first came here I was hitting it not very well. Then I found something that worked and then I found another thing that was working I added on top of that, and then I found a third thing that worked and added it on top of that and actually was playing pretty well.’ ”

During Nicklaus’ early-morning practice rounds, the picturesque shot over the fountain-dotted pond played as a 7- or 8-iron. Around 4:30 p.m. Sunday, however, a stiff wind forced him to alter his approach, and teeing off last allowed him to do so.

“I saw the guys try to hit 7-irons and they were hitting the ball, they were spinning it and they were going all over the place,” Nicklaus said. “So I said I’m going to take my 6-iron, choke it down a couple inches and just pick it, and try to make sure I didn’t put any spin on the ball. Which is what I did. It turned out to be a pretty darn good shot.

“Sometimes you have to go back and look in your memory bank and see if you can find something.”

Watson instantly recognized it was the best of the bunch.

“When the ball left his club, it was just boring right through the air, it wasn’t ballooning,” he said. “I knew it was going to be a heck of a shot.”

The stakes just added to the flair of the moment.

After Langer sank a seven-foot birdie worth $80,000 on No. 12, multiple players missed opportunities.

Price – who tapped in for birdie on the 10th for his team’s skins -missed a short birdie try on the 13th, curling the putt around the right side of the cup, and Couples missed a 10-footer for $100,000 on the 14th. After the 15th was halved, Couples again faltered with a big prize on the line, barely missing a downhill 15-footer for birdie on the 16th and carrying the pot over for a fourth straight hole.

“We needed a putt, but you know, today no one really made a putt,” Couples said. “We were in the same ballgame.”

As were Nicklaus and Watson, biding their time before seizing the day.

“Just lurking. We were just dodging bullets out there. We were dodging bullet after bullet after bullet,” Watson said. “We weren’t helping ourselves very much. When Jack hit that shot at 17, I knew it was time to convert.”

They landed in the rough more times than they care to remember, played out of a bunker or two and missed some key putts, yet always remained in the hunt.

Not quite the blueprint for success. But then again, with 26 major championships between the two, coming through in the clutch is nothing new.

“As I said to a lot of people yesterday, I said how would you like to step up on the first tee, and people say, ‘Well who’s your partner?’ ‘Well, my partner is Jack Nicklaus,’ ” Watson said emphatically. “How would you feel like having Jack Nicklaus as your partner?

“That’s the way I feel, always have.”

Couples probably wouldn’t mind the opportunity, either.

“Into the wind here, he hit a beautiful shot. That made the week, really, for me to watch that,” he said. “To see Jack hit that shot, the toughest shot of the day and he was the one who hit it, it was kind of fun to watch.”