Matson, Inc. · NYSE:MATX
Matson — Q3 2017 Earnings Presentation
19 slides from Matson's earnings presentation, Nov 2, 2017
Slide 1: Third Quarter 2017 Earnings Conference Call
Third Quarter 2017 Earnings Conference Call
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made during this call and presentation that set forth expectations, predictions, projections or are about future events are based on facts and situations that are known to us as of today, November 2, 2017. We believe that our expectations and assumptions are rea
Slide 3: Opening Remarks
Opening Remarks Matson’s results were better-than-expected in 3Q 2017 Favorable contributors include: Stronger demand for Matson’s expedited China service Stronger southbound demand in Alaska Timing of fuel surcharge collections Higher lift volume at SSAT Unfavorable trends include: Lower constructi
Slide 4: Hawaii Service Performance
Hawaii Service Third Quarter 2017 Performance Container volume decreased 6.4% YOY Despite generally favorable underlying economic conditions, container volume contracted primarily as a result of lower construction-related cargo Stable market share Full Year 2017 Outlook Expect modest economic growth
Slide 5: Hawaii Economic Indicators
Hawaii Economic Indicators Source: UHERO: University of Hawaii Economic Research Organization; STATE FORECAST UPDATE, September 29, 2017, http://www.uhero.hawaii.edu GDP Growth Construction Jobs Growth Real Building Permits Growth “[T]his is shaping up to be a restrained residential building cycle c
Slide 6: Honolulu Harbor Terminal Recent Announcements
Honolulu Harbor Terminal Recent Announcements State of Hawaii confirmed previously agreed upon KCT plan Matson will have a larger operation at Sand Island of ~130 contiguous acres Pasha operates at capacity at Piers 1, 2 and 51A today No available capacity for which TOTE could operate on an interim
Slide 7: China Expedited Service (CLX) Performance
China Expedited Service (CLX) Third Quarter 2017 Performance Container volume increased 11.7% YOY Increased demand for Matson’s expedited service Additional sailing in August due to vessel return to service from dry-docking Full Year 2017 Outlook Expect continued strong demand for Matson’s highly di
Slide 8: Guam Service Performance
Guam Service Third Quarter 2017 Performance Container volume declined 22.6% YOY Continued competitive pressure from APL Overall container market flat Full Year 2017 Outlook Expect heightened competitive environment and lower volume Matson’s significant service advantage expected to remain at 5 days
Slide 9: Alaska Service Performance
Alaska Service Third Quarter 2017 Performance Container volume increased 8.2% YOY Better-than-expected seafood season positively impacted southbound volume Additional northbound sailing Full Year 2017 Outlook Now expect volume to approximate level last year Primarily due to stronger than expected so
Slide 10: SSAT Joint Venture Performance
SSAT Joint Venture Third Quarter 2017 Performance Terminal joint venture contribution was $7.5 million, $3.9 million higher than last year Increased lift volume Full Year 2017 Outlook Expect FY2017 terminal joint venture contribution to be higher than 2016 Expect to continue to benefit from the laun
Slide 11: Matson Logistics Performance
Matson Logistics Third Quarter 2017 Performance Despite challenging economic backdrop, Logistics performing well $7.2 million of operating income 3Q 2016 results include Span Alaska for approximately 2 months Full Year 2017 Outlook Continue to expect full year 2017 operating income to be approximate
Slide 12: 3Q17 Financial Results – Summary Income Statement
3Q17 Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics Quarter Ending September 30, ($ in millions) 2017 2016 D Revenue Ocean Transportation $ 419.2 $ 398.0 5.3% Logistics 124.7 102.4 21.8% Total Revenue $ 543.9 $ 500.4 8.7% Oper
Slide 13: Debt Levels
Debt Levels Total debt of $839.3 million Net debt of $814.6 million Net debt-to-LTM EBITDA of 2.7x See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics 3Q17 Financial Results – Summary Balance Sheet ($ in millions) ASSETS Cash and cash equivalents $ 24.7 $ 13.9 Other current a
Slide 14: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash Excludes $6.5 million in other uses of cash and $8.3 million increase in cash balances Includes capitalized interest Last Twelve Months Ending September 30, 2017 (1) ($ in millions) 3Q share repurchase Open market repurchase of 0.7 million shares for approx. $17.1 mi
Slide 15: New Vessel Payments
New Vessel Payments First Aloha class ship in the graving dock. Main engine bedplate with crankshaft installed on the first Aloha class ship. Estimated Vessel Progress Payments Fiscal Year Ending December 31, ($ in millions) 2017 2018 2019 2020 Total Two Aloha Class Containerships $ 95.9 $ 158.1 $ 1
Slide 16: 2017 Outlook
2017 Outlook Ocean Transportation operating income for 2017 expected to be lower than the $142.7 million achieved in 2016 Continue to expect Logistics operating income for full year 2017 to be approximately $20 million Expect depreciation and amortization expense to be approximately $145 million (in
Slide 17: Addendum
Addendum
Slide 18: Addendum – Recent Industry Announcements
Addendum – Recent Industry Announcements August 17, 2017: TOTE Announces Plan to Establish a Hawaii Service(1) Working with Philly Shipyard for construction of four new vessels - new vessels will enter service in early 2020 and 2021 Securing space at Kapālama Container Terminal (KCT) a critical step
Slide 19: Addendum – Non-GAAP Measures
Addendum – Non-GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to incur and