Last year characterized the vacation ownership industry with low sales and the many owners who want to get out of their timeshares. One of the companies that recorded a staggering loss is Maui Land & Pineapple Co. which has net loss of $123.3 million. As a result, it quit the business of pineapple growing upon which the company was built.
The financial loss was a record setter for Maui Land, at least in recent history. Its two-year combined loss is over $200 million including the $79.4 million loss in 2008. However, aside from the difficulties in its pineapple production, the troubles with its luxury timeshare and condominium project in Kapalua also lead to their astounding losses. Excluding the previous two years, the company over the prior 20 years had not lost more than $11 million or earned more than $15 million in any year.
According to John Durkin, the chief financial officer of the company, 2009 was a year of transition for the company. He added that they think they’ve made some good improvements to their cost structure, and they plan more improvements. Last month on the other hand, Ryan Churchill, was named president and CEO of Maui Land who be leading the company toward improving its finances.
In the last quarter of 2009, Maui Land reported a $30.4 million loss, which included a $20.9 million expense to exit pineapple production. For the whole year, agriculture operations resulted in a $22.8 million loss. Real estate development operations on the other hand, generated a fourth-quarter operating loss of $1.4 million which was an improvement from a $61.5 million operating loss in the same quarter a year before. But for throughout 2009, real estate development activity produced a $62.6 million operating loss, compared with a $40 million operating loss for all of 2008.
Since the economic meltdown broke out in the late of 2007, many owners want to get rid of their timeshares as a way to cutback spending. Some of them even hire a timeshare transfer company such as the Transfer Smart. As a result, most timeshare companies posted a profit loss.