WWH Q3 2013 Results Impacted by Weak Shipping Market

Wednesday, November 06, 2013
Photo courtesy of Wilhelmsen

Reduced volumes of high and heavy cargo and seasonally lower demand for maritime services negatively affected Wilh. Wilhelmsen Holding ASA (WWH) total income and result in the third quarter of 2013. Current activity level for group entities is expected to continue.

Operating profit for the third quarter of 2013 was USD 96 million (USD 260 million) based on a total income of USD 873 million (USD 1 075 million). Income and results for the third quarter of 2012 were positively impacted by a USD 134 million sales gain related to Wilh. Wilhelmsen ASA’s downward sale of shares in Hyundai Glovis. Adjusting for the gain, the operating profit was down 24% and the total income down 7% year over year.

“Compared with the second quarter, our operating profit dropped 9% while the total income was down 3%. The main reason was a decline in ocean transported volumes, less profitable cargo mix and suboptimal utilisation of our advanced ro-ro fleet,” says Thomas Wilhelmsen, group CEO in WWH. “The lower contribution from our shipping activities was partly offset by a seasonally strong quarter for our land-based logistics services, which resulted in a sound contribution to group accounts.”

Commenting on the demand for maritime products and services, Mr Wilhelmsen highlights: “Although somewhat down from a strong second quarter, the maritime services segment continued on the positive trend from the previous quarter. The operating profit is at a level close to our long term target. Year over year, the results are supported by increase in sale of consumables, higher order book and minor acquisitions.”

When commenting on future prospects, Mr Wilhelmsen upholds the generally weak shipping markets as a challenge: “Despite a gradual increase in newbuilding ordering activity and the global merchant fleet, the shipping markets in general continue to be weak. This has a negative effect on owners’ purchasing capabilities and puts pressure on margins. For our shipping and logistics activities we anticipate volumes to remain at the same level as the third quarter.”

The board has proposed that the extraordinary general meeting to be held 27 November 2013 approves a second dividend of NOK 2.00 per share to be paid on or about 10 December. A first dividend of NOK 3.50 per share was paid in May.

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