Major Hawaii shopping center owner Alexander & Baldwin Inc. suffered a second-quarter financial loss as it continued to struggle with a poorly performing road paving and materials subsidiary.
The Honolulu-based firm Thursday reported it lost $1.2 million in the three months ended June 30 compared with a $3 million profit in the same period last year.
A&B said its earnings were dragged down by paving contractor subsidiary Grace Pacific, which generated a $4.3 million operating loss in the second quarter compared with a $3.6 million operating profit a year earlier.
Chris Benjamin, A&B president and CEO, said in a statement that the company’s core real estate leasing operations, which include running 21 retail properties statewide, are performing extremely well.
This segment of A&B’s business generated a $17 million operating profit in the second quarter, up 25% from $13.6 million a year earlier. The jump was largely driven by the acquisition of six Hawaii commercial properties after last year’s second quarter, including Queens’ MarketPlace on Hawaii island, Waipouli Town Center on Kauai, three industrial properties in Kapolei and the land under a Home Depot store in Iwilei.
A&B bought the six properties using $262 million it received from its December sale of 41,000 acres of farmland on Maui where it used to operate a sugar cane plantation until the end of 2016.
In another segment of A&B operations, real estate development and sales, the company generated a $500,000 operating profit from sales that included 22 affordable condominiums on Maui, 14 residential properties at the Kukui’ula resort on Kauai, a residential parcel on Kahala Avenue and a lot at Maui Business Park. In last year’s second quarter, this business segment generated a $1.6 million operating profit from more lucrative property sales.
At Grace, A&B said it has accelerated improvement efforts under new leadership for the subsidiary.
A&B bought Grace, Hawaii’s biggest paving contractor, for $277 million in 2013. Because of reduced business and other difficulties, A&B slashed the value of Grace by $78 million earlier this year. A&B said Thursday it continues to evaluate options including possibly selling the subsidiary.
Shares of A&B stock closed Thursday at $23.50 before the earnings announcement. Shares over the last 52 weeks have closed between $17.78 on Dec. 20 and $25.44 on March 29.
The company’s board rewarded shareholders Thursday by announcing an increased stock dividend. A third-quarter dividend of 19 cents per share will be paid Sept. 5 to shareholders of record as of the close of business Aug. 12. The dividend is 2.5 cents more than A&B’s prior quarterly dividend.
SECOND-QUARTER LOSS
$1.2 million
YEAR-EARLIER PROFIT
$3 million
ON THE MOVE
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