WWH Reports 2Q Earnings

Wilh. Wilhelmsen Holding ASA's (WWH) topline lifted by continued increase in volumes transported deep sea. Underlying development in the group's activities is positive.
The operating profit for WWH amounted to $1.4 million for the second quarter, up 23.8% from the first quarter. Total income came to $838.8 million, up 11.3% quarter-on-quarter.
"The export out of Japan rebounded faster than expected after the earthquake. Despite reduced Japanese production in the beginning of the quarter, the group recorded a total volume increase of 8% quarter on quarter, supported by continued export out of Korea and high and heavy volumes," says Thomas Wilhelmsen, group CEO at WWH. "With a modern and flexible fleet, we are confident with our tonnage position and ability to take part in the expected volume developments within cars and high and heavy cargoes."
"Our maritime services segment delivered increased income and recorded higher activity within all of its three business areas. Operating profit and operating margin is still somewhat disappointing. With a substantial share of revenue in USD and the majority of costs in local currencies, a low USD has a negative effect on the operating profit and consequently the operating margin," says Wilhelmsen. "The operating profit was also impacted negatively by increased commodity prices and a cost accrual made in the second quarter."
"To rectify the situation in the maritime services segment a profit improvement programme has been introduced and we expected to gradually improve operating profit towards the end of the second half," says Wilhelmsen.

Net profit after tax and minority for the group ended at $18.4 million for the quarter, down from $22.3 million in the first quarter.

The board of WWH expects the underlying positive development of the group activities to continue, still driven by growth in Asian export and emerging markets economies. The profit improvement plan under implementation in WMS is anticipated to have a gradual positive effect on the results. Escalation of the debt problem in developed countries and continued depreciation of the USD may, however, prove to be challenging for the group's performance.