On the evening of July 21, Matson announced today its preliminary financial results for the second quarter of 2023 and provided a business update
Chairman and chief executive Matt Cox said Matson’s marine and logistics business unit was performing well despite a challenging business environment and slow economic growth. “In ocean freight, our China services experienced higher sequential quarterly freight demand but generated lower year-over-year volumes and freight rates, which was the primary reason for the year-over-year decline in our consolidated operating income.
Currently, in the transpacific market, we are seeing slightly less capacity deployed and relatively low retail inventories. This is an improvement from earlier in the year, but retailers continue to manage inventory levels cautiously in the face of lower consumer demand. We further expect the trade lanes to experience a moderate peak season, but for Matson, we expect our China service to be close to full during the traditional peak season.
In the absence of an economic “hard landing” in the U.S., we continue to expect trade dynamics to gradually improve over the remainder of the year as the transpacific market transitions to more normal consumer demand and retail inventory levels. Regardless of the economic environment, we expect to continue to command a substantial rate premium over the Shanghai Containerized Freight Index, reflecting our fast and reliable ocean freight service and unrivaled destination service.
Matt Cox added, “In our domestic seaborne trade lanes, Hawaii, Alaska and Guam saw volumes decrease year-over-year. The year-over-year decrease in Hawaii trade was primarily due to lower retail-related trade volumes.
The year-over-year declines in trade volumes for Guam and Alaska were primarily due to lower general demand and lower seafood trade volumes, respectively, mainly due to lower contributions from transportation brokerage and supply chain management. As a result, Matson expects operating income of $78 million to $83 million for ocean freight and $13.5 million to $14.5 million for logistics in the second quarter. We also expect net income of $76.3 million in the second quarter of 2023