Slide 1: Fourth Quarter 2023 Earnings Conference Call
1 Fourth Quarter 2023 Earnings Conference Call Fourth Quarter 2023 Earnings Conference Call February 20, 2024
Slide 2: Forward-Looking Statements
2 Fourth 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 February 20, 2024. We believe that our expe
Slide 3: Opening Remarks
3 Fourth Quarter 2023 Earnings Conference Call Opening Remarks • Matson’s Ocean Transportation and Logistics business segments performed well in 4Q23, capping off a solid year for both business segments • Matson is in a solid operational and financial position – Leading expedited ocean freight provi
Slide 4: Hawaii Service Fourth Quarter 2023 Performance
4 Fourth Quarter 2023 Earnings Conference Call Hawaii Service Fourth Quarter 2023 Performance • Container volume decreased 1.9% YoY due to lower general demand – 4Q23 volume was 5.1% lower than volume achieved in 4Q19 • Tourist arrivals in 4Q23 were modestly lower YoY; Maui tourism impacted by wildf
Slide 5: Hawaii Service – Current Business Trends
5 Fourth Quarter 2023 Earnings Conference Call Hawaii Service – Current Business Trends UHERO Projections (3) (1) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2023-12-state.xls (2) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2023-12-maui.xls (3) Source: https
Slide 6: China Service Fourth Quarter 2023 Performance
6 Fourth Quarter 2023 Earnings Conference Call China Service Fourth 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 increased 23.3%
Slide 7: China Service – Current Business Trends
7 Fourth Quarter 2023 Earnings Conference Call China Service – Current Business Trends • Currently in the Transpacific marketplace, we continue to see steady U.S. consumer demand • Expect demand for our China service post Lunar New Year to be more traditional – Factories were closed for the holiday;
Slide 8: Guam Service Fourth Quarter 2023 Performance
8 Fourth Quarter 2023 Earnings Conference Call Guam Service Fourth 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 increased 2.0% YoY primarily due to higher general demand – 4Q23 volume 4.2% higher than volume
Slide 9: Alaska Service Fourth Quarter 2023 Performance
9 Fourth Quarter 2023 Earnings Conference Call Alaska Service Fourth Quarter 2023 Performance • Container volume decreased 0.6% YoY – Lower export seafood volume on AAX – Higher northbound volume due to an additional sailing – Higher southbound volume due to higher domestic seafood volume • 4Q23 vol
Slide 10: Alaska Service – Current Business Trends
10 Fourth Quarter 2023 Earnings Conference Call Alaska Service – Current Business Trends • Alaska economy continues to show good growth across key indicators despite flattish growth in population – Low unemployment rate – Widespread job growth • In the near-term, we expect the Alaska economy to grow
Slide 11: SSAT Joint Venture Fourth Quarter 2023 Performance
11 Fourth Quarter 2023 Earnings Conference Call SSAT Joint Venture Fourth 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 $4.1 million; YoY in
Slide 12: Matson Logistics Fourth Quarter 2023 Performance
12 Fourth Quarter 2023 Earnings Conference Call Matson Logistics Fourth 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 $8.9 million; YoY decrease of approximately $3.9 million – Lower contribution from trans
Slide 13: Financial Results Summary
13 Fourth Quarter 2023 Earnings Conference Call Year-to-Date Fourth Quarter YTD Ended 12/31 D Quarters Ended 12/31 D ($ in millions, except per share data) 2023 2022 $ 2023 2022 $ Revenue Ocean Transportation $ 2,477.0 $ 3,544.6 ($ 1,067.6) $ 639.7 $ 633.0 $ 6.7 Logistics 617.6 798.4 ( 180.8) 149.2
Slide 14: Cash Generation and Uses of Cash
14 Fourth Quarter 2023 Earnings Conference Call Cash Generation and Uses of Cash ($ 200.0) ($ 100.0) $ 0.0 $ 100.0 $ 200.0 $ 300.0 $ 400.0 $ 500.0 $ 600.0 Cash Flow from Operations Paydown of Borrowings, net Maintenance & Other Capex New Vessel Capex (1) Capital Construction Fund (2) Dividends Share
Slide 15: Financial Results – Summary Balance Sheet
15 Fourth Quarter 2023 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $440.6 million(1) – In 2023, reduced total debt by $76.9 million (1) Total Debt is presented before any reduction for deferred loan fees as required by GAAP. Debt Levels Share Repurchase • 4Q23:
Slide 16: Other Financial Updates
16 Fourth Quarter 2023 Earnings Conference Call Other Financial Updates • CCF cash balance on December 31, 2023 of $599.4 million – Nearly two-thirds of remaining milestone payments to be funded with restricted cash in CCF(1) – Expect to make milestone payments of $35.5 million in 2Q24 and 4Q24 for
Slide 17: Review of 2023 Capital Expenditures
17 Fourth Quarter 2023 Earnings Conference Call Review of 2023 Capital Expenditures FY 2023 Comments Capitalized vessel construction expenditures $52.9 million • $49.9 million for new vessel milestone payment in 2Q23 Maintenance and other capital expenditures $195.5 million • $66.1 million in capex
Slide 18: Capital Expenditures Update
18 Fourth Quarter 2023 Earnings Conference Call Capital Expenditures Update ($ in millions) FY 2024 FY 2025 FY 2026 Comments Maintenance and other capital expenditures $110 – 120 $100 – 110 $80 – 90 • Includes Phase II and III work at Sand Island, Honolulu LNG installations and reengining on existin
Slide 19: 2024 Outlook
19 Fourth Quarter 2023 Earnings Conference Call 2024 Outlook FY 2024 Outlook Items Full Year First Quarter Operating Income: Ocean Transportation To be higher than the $294.8 million achieved in 2023 To be lower than the $27.8 million achieved in the 1Q23 Logistics To be lower than the $48.0 million
Slide 20: Closing Thoughts
20 Fourth Quarter 2023 Earnings Conference Call Closing Thoughts • Matson is in a very good position operationally and financially – Leverage the Matson brand and our portfolio of high-quality businesses to drive new opportunities – Strong financial position • Low-cost, investment grade balance shee
Slide 21: Appendix
21 Fourth Quarter 2023 Earnings Conference Call Appendix
Slide 22: Appendix – Non-GAAP Measures
22 Fourth 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, he