Matson, Inc.

conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Justin Schoenberg. Please go ahead.

Thank you, Corinne. Joining me on the call today are Matt Cox, Chairman and Chief Executive Officer, and Joel Winney, Executive Vice President and Chief Financial Officer. Slides from this presentation are available for download at our website, www.matson.com, under the Investors tab. Before we begin, I would like to remind you that during the course of this call, a forward-looking statement in the meaning of the Federal Security Report providing expectations, predictions, projections, and future events. We believe that our expectations and assumptions are reasonable. We caution you to consider the risk factors that could cause actual results to differ materially from those in the overlooking data, the press release, the presentation slides, and this column. These risk factors are described in our press release and presentation and are more fully detailed than the captured risk factors, pages 13 to 25, our form 1010, filed February 23rd, 2024, in our substance violence with the SEC. Please also note that the date of this conference is August 1st, 2020, and any forward-looking statements that we make today are based on assumptions as we undertake no obligation to forward-looking statements. I will now turn the call over to Dr. Mack.

Okay, Justin, thanks. Thanks to those on the call. Starting on slide three, Mattson's ocean transportation and logistics business segments performed well, higher year-over-year operating income in the second quarter. In ocean transportation, operating income increased year-over-year. Our China service saw significantly higher year-over-year freight rates and was the primary driver of the nation's consolidated operating income. We had higher year-over-year volumes in Alaska, primarily due to two additional sailings. Hawaii and Guam saw lower over year volume. In logistics, offering income each year over year on the strength of supply chain management. As a result of our performance in the second quarter and the expected strength of our China service in the back half of the year, we're raising our outlook in 24. Joel will go into more detail on our updated outlook later in the presentation. I'll now go through the second quarter performance of our trade lanes, SSAT, and logistics, so please turn to the next slide. Container volume in our Hawaii service decreased 3.6% in the second quarter year over year. The decrease was primarily due to lower general demand. Tourist arrivals in the second quarter were lower primarily due to significantly lower visitor traffic to Maui as a result of the wildfires last year. I will go through our full year outlook on the next slide, so please turn to slide five. According to UHERO's second quarter 2024 economic report, the Hawaii economy is projected to grow modestly in 2024, supported by a low unemployment rate and increasing construction activity. While we're encouraged by UHERO's longer-term forecast and some of the positive factors supporting that growth, our recent performance is reflective of a softer market. We expect volume in 2024 to be modestly lower than the level achieved last year, primarily due to continued challenges in population growth and lower discretionary income as a result of higher inflation and interest rates. Moving on to our China service on slide six, Matson's volume in second quarter 2024 was 3% higher year over year As we continue to see a high level of demand from the e-commerce and garment customers, we achieved average freight rates that were significantly higher year over year. Please turn to slide seven. Supportive economic and consumer demand environment in the U.S. coupled with tighter supply chain led to elevated freight rates during the quarter. The supply and demand dynamics we experienced in the second quarter were not consistent normalized operating environment. We outperform from a freight rate perspective. We expect our China service to continue to see elevated freight rates during the traditional peak season in the third and early fourth quarters. While we feel good about rate levels during the traditional peak season period, trajectory after the peak season is uncertain given several factors, including the strength of U.S. economy and interest rates, trans-Pacific supply, and the Red Sea situation and its related supply chain effects, the East Coast labor union negotiation, and the U.S. elections. Nonetheless, we expect freight rates to remain elevated as long as the underlying economic supply chain and geopolitical conditions persist. At some point, we expect rates to normalize, timing in which will likely depend on the duration and the degree to which these factors influence supply and demand dynamics in the trade lane. Regardless of the environment, we expect the ongoing shift from air freight to expedited ocean and the continued growth of e-commerce goods to drive long-term demand for our China service. I'm confident in our positioning with the two fastest and most reliable expedited ocean services in the Trans-Pacific trade lane and our unmatched destination services. Please turn to the next slide. In Guam, Massive container volume in the second quarter of 2024 decreased 6.1% year over year due to one less sailing compared to last year. In the near term, we expect continued improvement in the quantum economy underpinned by low unemployment rate. For 2024, we expect container volume to approach the level achieved last year. Please turn to the next slide. In Alaska, Essence container volume for the second quarter of 2024 increased 4.9% year-over-year due to two additional northbound sailings compared to last year. In the near term, we expect continued economic growth in Alaska, supported by a low unemployment rate, job growth, and lower levels of inflation. For 2024, we expect Alaska volume to approximate the level achieved last year. Please turn to slide 10. Our terminal joint venture, SSAT, increased $2.6 million year over year to $1.2 million. The higher contribution was primarily due to higher lift volumes. Although container volumes on the US West Coast have been particularly strong in the first half of the year, volume across SSAT terminals has not been as strong. In 2024, expect the contribution from SSAT to be modestly higher than 2023 due to an expected increase in lift volumes. Turning now to logistics on slide 11, operating income in the second quarter came in at $15.6 million, or approximately $1.3 million higher than the result in the year-ago period. The increase was primarily due to a higher contribution from supply chain management. Our supply chain management service includes purchase order management, origin operation, and destination services, and allows us to provide a comprehensive solution from factory floor to destinations across the US. For the third and fourth quarters of 2024, we expect operating income to approximate the level achieved last year. And with that, I will now turn the call over to Joel for a review of our financial performance.