Land-price slump
knocks Amfac for loss

The former Big Five company
lost $34.2 million last year as declining
land values forced a writedown

By Rick Daysog
Star-Bulletin

Amfac/JMB Hawaii Inc. recorded a $34.2 million net loss in 1996, largely due to lower land values.

The loss compares with a net income of $12.7 million in 1995. The company's 1995 results benefited from a one-time, $32.5 million gain from paying down its debt.

Amfac reported revenues of $97.4 million last year, a 4.1 percent decrease from 1995's $101.6 million.

As part of a biannual appraisal of its land holdings, the company found that the value of its local properties declined by $18.3 million, said Amfac's President Gary Grottke.

"They've declined in value and we've had to write them down," he said.

Once Hawaii's largest company, Amfac owns and develops resort, industrial and agricultural lands in Hawaii. Amfac owns 46,700 acres locally and employs about 960 employees.

The company is no longer publicly traded but its financial results were filed with the Securities and Exchange Commission by parent Northbrook Corp. Northbrook is affiliated with JMB Realty Corp. which acquired Amfac in 1988.

Amfac's listed its real estate assets -- including land and building improvements -- at $289.3 million last year, down from $336.1 million in 1995. The company's overall assets -- which include cash, machinery, equipment as well as real estate -- were $483.6 million in 1996, down from $527.6 million in the previous year.

Grottke noted that the lower land values aren't a reflection of the company's daily operations. Revenues from the company's agriculture division rose 8.7 percent last year to $51.8 million from 1995's $47.7 million.

Revenues from land sales, meanwhile, slid 14.3 percent to $45.1 million from 1995's $52.7 million, the company said.

The results come as Amfac is restructuring its management organization into six divisions, which include sugar, coffee, golf, water, land management and real estate development. Amfac previously operated under two divisions: real estate and agriculture.