The New York-listed containership operator reported net income of $7.3m for the three months to 31 December, against a gain of $15.6m in the same stretch of 2012.
While consolidated revenue rose to $410.9m from $398.3m year-on-year the company incurred a $10m litigation charge that relates to a proposed settlement of a federal lawsuit.
Excluding this unforeseen expense chief executive Matt Cox told investors that Matson’s results were in line with management’s forecast due to the stability of its ocean transportation division.
“Unfortunately, our financial results were impacted by the litigation charge, which while a very difficult decision, was the most prudent path forward,” he added in its earnings release.
Going forwar, Cox said he is confident that Matson’s core business lines will continue to generate enough cash flow to fund its dividend, newbuilding backlog and the pursuit of “attractive growth opportunities”.
The carrier acknowledged that Hawaii container volumes contracted in the third and fourth quarters of 2013 but said it still expects the state’s economy to grow in the coming months despite a lull at the start of 2014.
While Matson expects to see capacity increase when one of its competitor’s launches a new vessel later this year the operator said it anticipates an overall year-on-year increase in its Hawaii container volumes.
“In the China trade, freight rates eroded in the fourth quarter 2013, a reflection of the ongoing vessel overcapacity in the market and the international carriers’ inability to sustain general rate increases,” the owner added.
“In 2014, overcapacity is expected to continue, with vessel deliveries outpacing demand growth, leading to modest freight rate erosion.
“However, the company expects its ships will remain at high utilization levels, and its service will continue to realize a premium to market rates for its expedited service in 2014.”
In addition to the litigation charge Matson also incurred a $1.7m hit linked to legal costs and claims tied to the molasses spill in Honolulu Harbor that occurred in September 2013 but said it is still unsure how the incident will impact its balance sheet in the months ahead.
