Slide 1: First Quarter 2023 Earnings Conference Call
1 First Quarter 2023 Earnings Conference Call First Quarter 2023 Earnings Conference Call May 4, 2023
Slide 2: Forward-Looking Statements
2 First Quarter 2023 Earnings Conference Call Forward-Looking Statements Statements made during this 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 May 4, 2023. We believe that our expectation
Slide 3: Opening Remarks
3 First Quarter 2023 Earnings Conference Call Opening Remarks • Despite being down from the extraordinary pandemic driven demand level over the last two years, Matson’s Ocean Transportation and Logistics business segments performed well in a challenging business environment • Ocean Transportation 1Q
Slide 4: Hawaii Service First Quarter 2023 Performance
4 First Quarter 2023 Earnings Conference Call Hawaii Service First Quarter 2023 Performance • Container volume decreased 0.8% YoY – Lower eastbound volume – Muted growth in westbound volume – 1Q23 volume 0.9% higher than volume achieved in 1Q19 Container Volume (FEU Basis) 25,000 27,000 29,000 31,00
Slide 5: Hawaii Service – Current Business Trends
5 First Quarter 2023 Earnings Conference Call Hawaii Service – Current Business Trends UHERO Projections (2) (1) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2023-03-state.xls (2) Source: https://uhero.hawaii.edu/wp-content/uploads/2023/03/23Q1_Forecast.pdf 2021 2022 2023P 2024P
Slide 6: China Service First Quarter 2023 Performance
6 First Quarter 2023 Earnings Conference Call China Service First Quarter 2023 Performance Container Volume (FEU Basis) 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 48,000 53,000 Q1 Q2 Q3 Q4 2022 2023 Note: CCX service started in 3Q21 and ended in 3Q22. • Container volume decreased 35.4% Y
Slide 7: China Service – Current Business Trends
7 First Quarter 2023 Earnings Conference Call China Service – Current Business Trends • In 1Q23, retail customers continued to conservatively manage inventories amid weakening consumer demand, increasing interest rates and economic uncertainty • Currently in the Transpacific marketplace, business co
Slide 8: Evolution of Our Transpacific Expedited Services Through and Beyond Pandemic
8 First Quarter 2023 Earnings Conference Call Evolution of Our Transpacific Expedited Services Through and Beyond Pandemic • May: introduced CLX+ vessel charters to supplement CLX given high demand during early pandemic period • September: introduced Alaska-Asia Express service (AAX) as CLX+ backhau
Slide 9: Guam Service First Quarter 2023 Performance
9 First Quarter 2023 Earnings Conference Call Guam Service First Quarter 2023 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Q1 Q2 Q3 Q4 2022 2023 • Container volume decreased 10.9% YoY primarily due to lower retail-related demand – 1Q23 volume 3.9% lower than vol
Slide 10: Alaska Service First Quarter 2023 Performance
10 First Quarter 2023 Earnings Conference Call Alaska Service First Quarter 2023 Performance • Container volume decreased 4.8% YoY – Lower export seafood volume from AAX primarily due to 3 less sailings – Lower southbound volume primarily due to lower domestic seafood and household goods volume – Hi
Slide 11: SSAT Joint Venture First Quarter 2023 Performance
11 First Quarter 2023 Earnings Conference Call SSAT Joint Venture First Quarter 2023 Performance Equity in Income of Joint Venture ($ 5.0) $ 0.0 $ 5.0 $ 10.0 $ 15.0 $ 20.0 $ 25.0 $ 30.0 $ 35.0 $ 40.0 Q1 Q2 Q3 Q4 $ in millions 2022 2023 • Terminal joint venture contribution was $(1.8) million; YoY de
Slide 12: Matson Logistics First Quarter 2023 Performance
12 First Quarter 2023 Earnings Conference Call Matson Logistics First Quarter 2023 Performance Operating Income $ 0.0 $ 5.0 $ 10.0 $ 15.0 $ 20.0 $ 25.0 Q1 Q2 Q3 Q4 $ in millions 2022 2023 • Operating income of $10.9 million; YoY decrease of approximately $5.5 million – Lower contribution from supply
Slide 13: Financial Results – Summary Income Statement
13 First Quarter 2023 Earnings Conference Call Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics. First Quarter Quarters Ended 3/31 D ($ in millions, except per share data) 2023 2022 $ Revenue Ocean Transportation $ 551.0 $ 943.9
Slide 14: Cash Generation and Uses of Cash
14 First Quarter 2023 Earnings Conference Call Cash Generation and Uses of Cash ($ 400.0) ($ 200.0) $ 0.0 $ 200.0 $ 400.0 $ 600.0 $ 800.0 $ 1,000.0 $ 1,200.0 Cash Flow from Operations Paydown of Borrowings, net Maintenance & Other Capex New Vessel Capex (1) Capital Construction Fund (2) Dividends Sh
Slide 15: Financial Results – Summary Balance Sheet
15 First Quarter 2023 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $476.7 million(1) – All outstanding debt is fixed rate – Average interest rate of 2.04% • In January 2023, prepaid $14.3 million for all outstanding principal on Maunawili Title XI • In March 202
Slide 16: Capital Construction Fund (CCF)
16 First Quarter 2023 Earnings Conference Call Capital Construction Fund (CCF) • In February 2023, deposited $100 million in cash into CCF and pledged accounts receivable to reduce taxable income in 2022 • Currently, don’t expect to make additional cash contributions to the CCF for milestone payment
Slide 17: Closing Thoughts
17 First Quarter 2023 Earnings Conference Call Closing Thoughts • We expect the consolidated operating income in 2Q23 to be higher than 1Q23 – Normal seasonality returns to our domestic tradelanes and Logistics – Expect our China service to experience freight demand below normalized conditions • In
Slide 18: Appendix
18 First Quarter 2023 Earnings Conference Call Appendix
Slide 19: Appendix – Non-GAAP Measures
19 First Quarter 2023 Earnings Conference Call Appendix – 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, hel