Cook Inlet Region Inc. surged back to profitability last year after getting bit hard by the national recession.
The Anchorage Native corporation reaped a $24.5 million profit in 2009 after suffering a $22.8 million loss in 2008, due mainly to investments soured by that year's stock market implosion, according to its new annual financial report.
Last year, the stock market bounced back and CIRI saw growth in its investments and most of its businesses.
The company's bugaboo was its tourism business in Alaska and the Lower 48. The national economy has remained slow, with chronic job losses and stagnation. Tourists were traveling shorter distances and spending much less on their trips. That hurt CIRI's Alaska tour operations and lodges as well as its Lower 48 hotel and resort properties.
Tourism was the only part of CIRI struck by shrinking revenue last year.
CIRI's other businesses include its $100 million massive retail complex in Northeast Anchorage, Tikahtnu Commons, which is filling up with big-box stores and, recently, a new Regal Cinemas theater. The company also owns firms that specialize in construction, oil field work and government contracting. CIRI also invests in real estate and telecommunications.
TOURISM LOSSES
Despite its overall profit, CIRI lost nearly $4.9 million in its tourism and hospitality business sector last year.
The Native firm owns hotels and day-tour boats in Alaska, as well as properties in the Lower 48. CIRI says its Alaska tourism operations cut expenses to cope with fewer visitors. For example, the company didn't deploy Kenai Fjords tour boats until they were fully booked. It shut down part of its upscale Talkeetna lodge.
"We were definitely down significantly from the previous year (2008), which was a record year," Jim Jager, CIRI spokesman, said of the company's tourism arm.
"We attribute (that) to the down economy and reduction in Alaska visitors," he said.
CIRI believes that Alaska tourism remains a good investment, even though the cruise industry -- the source of most of Alaska's tourists -- has been cutting the number of ships it brings to the state.
With fewer ships, "we've refocused a lot more effort to marketing to independent travelers," Jager said.
He says the company is already seeing some improvement in tourism sales this year. "It's still a down year but we are doing better than anticipated," he said.
HARNESSING ENERGY
CIRI's annual report to shareholders shows that the company is sitting on a large amount of cash, stocks and bonds: about $182 million as of Dec. 31.
"We're very liquid right now and we are actively looking to invest some of that money," Jager said.
An example of CIRI putting its stockpiled cash into new investments was its purchase of Idaho-based environmental remediation company North Wind Inc. at the end of last year. North Wind has 19 offices and 500 employees nationwide. The purchase price was $30 million, with CIRI paying about $12 million up front, according to the new annual report.
CIRI is also building a 40,000-square-foot office building in South Anchorage, near C Street and Klatt Road. The building has already been fully leased to Doyon Limited, a Fairbanks-based Native corporation.
Investing in energy production for Southcentral is another high priority. It plans to begin building a 54-megawatt wind turbine farm on Fire Island next year, expected to power 18,000 homes. CIRI is seeking construction bids for the wind farm and hopes to begin construction next year, Jager said.
In addition, the Native firm is exploring the possibility of creating synthetic natural gas using its underground coal deposits on its land in the Beluga area. The company is drilling test holes on its land, and another round of testing will come in the fall.
Both projects will cost millions -- last year, CIRI estimated constructing the wind farm would cost $165 million. CIRI, for now, is the major company backing them.
"CIRI has not gotten to the serious spending yet," Jager said.
Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.
