Alexander & Baldwin's agribusiness division, which is primarily Hawaiian Commercial & Sugar Co. on Maui, logged a $3.8 million profit for the first quarter - 9 percent higher than the first three months of 2012.
Stanley M. Kuriyama, A&B chairman and chief executive officer, said in A&B's quarterly report that the $300,000 increase in profit was due to "higher power margins" at HC&S - the lone surviving sugar plantation in the state - which supplies power to Maui Electric Co., and the Port Allen solar farm on Kauai that began operations in December.
Agribusiness revenue of $14.7 million for the first quarter was up $1.1 million, or 8 percent, compared to the first quarter of 2012.
Hawaiian Commercial & Sugar Co. tournahauler driver Alvin Ponce waves to a driver passing by on Haliimaile Road recently as his cousin, cane operator Michael Feiteira, loads his rig with sugar cane. Ponce said that he has been driving big cane-hauling trucks on the plantation for 29 years. “I just love my job,” Ponce said. “I enjoy doing it.”
The Maui News / MATTHEW THAYER photo
The revenue increase was partially offset by lower raw sugar and molasses margins, the report said.
The sugar company that cultivates 36,000 acres on Maui produced 8,200 tons, more than 300 percent higher than the 1,900 tons produced in the first quarter of 2012. The report noted that sugar production was higher in this year's first quarter due to an earlier start to the harvest as compared to 2012.
Sugar sold in the first quarter was 2,700 tons, 23 percent higher than the 2,200 tons sold in the same quarter in 2012.
The company also reported that 98 percent of the year's crop has been priced and that "sugar yields (are) on track with plan."
The agribusiness report was part of the A&B first quarter report, released Thursday, that showed the company with a $5 million (12 cents a share) income, higher than the $2.8 million reaped in the first quarter of last year.
"Operating profit across all of our business segments improved in the first quarter compared to the first quarter of 2012," said Kuriyama in a news release. "Leasing continues to perform well. . . . In development, we're encouraged that the pickup in sales activity we noted at our projects at the end of 2012 is continuing in 2013."
He noted the pending sale of a 24-acre parcel adjacent to Maui Business Park II in Central Maui to a subsidiary of Safeway for the development of the island's first Target store. In a separate real estate development report, A&B reported closing sales on 4 acres out of 155 acres of sellable land in the business park in Puunene-Kahului as of the end of 2012. The report said the targeted sales price in the business park is $38 to $60 a square foot.
"This would be a major sale for the company and a boost to our Maui Business Park lot sales program," he said.
Kuriyama said the company will be focusing on "shovel-ready" projects, such as Maui Business Park, Kukui'ula on Kauai and in Wailea.
The real estate supplemental report showed four A&B wholly owned developments in Wailea and one 50 percent ownership (Kai Malu in Wailea). Among the wholly owned developments, the 70-unit resort residential The Bluffs at Wailea on 7 acres and a Wailea multifamily resort residential project with 75 units on 13 acres are slated to begin construction next year.
Work on a 60,000-square-foot commercial retail project on 11 acres in Wailea also is slated to begin next year, the report said.
Real estate leasing operating profit for the first quarter was $10.9 million, 2 percent higher than the $10.7 million recorded in the first quarter of 2012, Kuriyama said. Comparative results benefited from the net effect of sales and acquisitions and higher occupancy, he said.
"In the first half of 2013, we expect to add over 215,000 square feet of retail GLA (gross leasable area) to our Hawaii portfolio, as we begin to gain traction in our long-term strategy of migrating our Mainland commercial portfolio to Hawaii," he said.
He noted the acquisition of the 170,000-square-foot Waianae Mall in January from proceeds of last year's sale of 286 acres of "noncore land" on Maui. Also in the quarter, the company sold the Northpoint Industrial facility in Fullerton, Calif., for $14.9 million and is in negotiations to purchase the 46,000-square-foot Napili Plaza Shopping Center, which the company once owned.
Built by Maui Land & Pineapple Co. in the early 1990s, the company sold the Napili Plaza on 4 acres to A&B in 2003 for $7.1 million. In 2007, A&B sold the shopping center to Festival Retail Fund 1 for $17.5 million.
The Napili Plaza is currently owned by Jupiter Holdings LLC with a Newport Beach, Calif., address. The county currently is assessing the property at $9.2 million.
Kuriyama said the sale of the shopping complex back to A&B is expected to close in the second quarter.
The company's largest retail property in the state, the Maui Mall, with 185,700 square feet of space, is 92 percent leased as of the end of the quarter, according to a separate report. For other Maui retail outlets, the 50,200-square-foot Lahaina Square was 67 percent leased and the 48,700-square-foot Kahului Shopping Center was 89 percent leased.
First quarter 2013 operating profit for the real estate development and sales segment was $2.4 million, compared to $900,000 in last year's first quarter. Sales for the quarter, inclusive of joint venture sales, consisted of the Northpoint Industrial facility, a custom lot at Kukui'ula, two residential units at Kai Malu in Wailea and two residential units at Ka Milo on the Big Island.
* Lee Imada can be reached at firstname.lastname@example.org.