Report: Sealaska profits rebounding

Posted: Monday, May 31, 2010

Sealaska Corp. returned to profitability in 2009 after seeing stock-market driven losses the previous year. Some of the regional Native corporation's business operations have continued to struggle, however.

Sealaska's $201 million in revenue realized a $20.3 million profit, made possible by market returns to Sealaska's Permanent Fund and profits shared by other Native corporations.

Dividends this year of $2.15 per share were the lowest since dividends were suspended entirely in 2000 and 2001, according to the company's annual report, released earlier this month in advance of its June 26 annual meeting in Craig.

"Sealaska remains strong and poised for growth in coming years," the company said.

While the stock market rebounded in 2009, the business climate has yet to follow suit. That meant that Sealaska's business ventures elsewhere struggled, with the company's natural resources businesses posting a rare loss, as well as its big business services division.

Manufacturing businesses saw profits decline, but rigorous cost cutting resulted in a small profit, said Rick Harris, Sealaska's executive vice president.

"All of our operating companies performed pretty well, given the market conditions," he said.

In 2009, Sealaska also began a new business venture called Haa Aaní, LLC, to develop the company's resources in Southeast Alaska.

Haa Aaní may include activities such as biomass energy development, as well as geothermal, hydro and tidal electric production.

Those businesses will have a mission of providing development and jobs in Southeast Alaska, but "we want those entities to be profitable," Harris said.

The key to that effort, as well as the future profitability of the Sealaska Timber Corp., which for a long time was the company's cash cow, may hinge on the Sealaska lands bill now before congress.

Under the Alaska Native Claims Settlement Act, Sealaska has received about 291,000 acres of land, including valuable old-growth forest. Under ANCSA, the company is owed 38,000 more acres, which it hopes to acquire soon.

Other newly developing Southeast ventures include oyster growing, which employs a couple of tribal members near Kake. The operation will soon expand to Yakutat, Harris said.

Key to this year's financial turnaround was the differing fortunes of the company's permanent fund and other funds, which ended the year valued at $169 million, up from $138 million the previous year.

"Public equity market gains in 2009 have also helped us recover some of 2008's unprecedented losses," the company said.

Sealaska's long-term investment funds, such as the Marjorie V. Young Shareholder Permanent Fund, have outperformed similar funds, the company said.

Sealaska reported at $20.1 million in investment profits in 2009.

Sealaska also benefited greatly from what are known as the 7(i) provisions of ANCSA, under which Native corporations must share their profits from some resource businesses with other native corporations. Big gains from the Arctic Slope Regional Corporation's oil business and NANA's Red Dog Mine contributed most of the $19.8 million Sealaska received this year.

This year the company changed its annual report, providing significantly less detail to shareholders on how its individual businesses did during the year, which the company said would make the annual report "easier to read and absorb."

"Because the new format is significantly shorter, it also saves paper and reduces production costs - an important overall strategy for the Corporation," the company said.

The full report is available on the company's website at www.sealaska.com.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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