For the six months ended June 30, 2017, Matson reported net income of $31.0 million, or $0.72 per diluted share compared with $36.1 million, or $0.83 per diluted share in 2016. Consolidated revenue for the six month period ended June 30, 2017 was $986.9 million, compared with $921.9 million in 2016.
"Matson achieved better than expected second quarter results, buoyed by stronger demand for our expedited China service, the timing of fuel surcharge collections, higher lift volumes at our SSAT terminal joint venture, and improved performance in Logistics. However, these gains were moderated by lower construction related cargo to Hawaii as the boom of high-rise condominium developments in Honolulu has begun to ebb and other real estate construction activity has yet to offset that decline."
"For the balance of 2017, we continue to expect modest improvement in each of our core tradelanes with the exception of Guam where we expect further competitive losses due to the launch of a competitor's weekly service in December 2016. As a result, we are affirming our 2017 outlook for operating income and EBITDA; and consequently, we continue to expect operating income to be lower than it was in 2016 and EBITDA to approximate the level achieved in 2016."
The Hawaii economy experienced modest growth in the second quarter 2017; however, the Company's container volume was lower due to the absence of volume gains associated with a competitor's service reconfiguration and related issues in the second quarter of 2016, and lower construction related volumes. Given the timing of the expected transition of construction activity and the absence of a 53rd week in 2017, the Company expects its full year 2017 Hawaii container volume to be modestly lower than the level achieved in 2016.
In China, the Company's container volume in the second quarter 2017 was 15.0 percent higher year-over-year due to stronger demand for Matson's expedited service and an additional sailing. The Company continued to realize a sizeable rate premium in the second quarter 2017 and achieved average freight rates modestly higher than the second quarter 2016.
In Guam, as expected, the Company's container volume in the second quarter 2017 was lower on a year-over-year basis, the result of competitive losses to a U.S. flagged containership service that increased its service frequency to weekly in December 2016.
Ocean Transportation revenue increased $21.8 million, or 5.9 percent, during the three months ended June 30, 2017, compared with the three months ended June 30, 2016. This increase was primarily due to higher fuel surcharge revenue, higher average freight rates in China and Hawaii, and higher container volume in China, partially offset by lower volume in Hawaii and Guam.
On a year-over-year FEU basis, Hawaii container volume decreased by 2.8 percent due to the absence of competitive volume gains in the prior year and a modest market contraction; Alaska volume decreased by 1.1 percent attributable to the continued energy sector related economic contraction; China volume was 15.0 percent higher due to stronger demand for the Company's expedited service and an additional sailing during the three months ended June 30, 2017; and Guam volume was 14.3 percent lower due to competitive losses.
EBITDA: The Company expects full year 2017 EBITDA to approximate the $288.6 million achieved in 2016.
Income Tax Expense: In the second quarter 2017, the Company's effective tax rate was 39.4 percent. For the full year 2017, the Company expects its effective tax rate to be approximately 39 percent.
Capital and Vessel Dry-docking Expenditures: In the second quarter 2017, the Company made maintenance capital expenditure payments of $14.2 million, vessel construction expenditures of $44.9 million, and dry-docking payments of $17.9 million. For the full year 2017, the Company expects to make maintenance capital expenditure payments of approximately $50 million, vessel construction expenditures of approximately $242 million, and dry-docking payments of approximately $50 million.
A conference call is scheduled today at 4:30 p.m. EDT when Matt Cox, Chairman and Chief Executive Officer, and Joel Wine, Senior Vice President and Chief Financial Officer, will discuss Matson's second quarter 2017 results.