Strong Volumes Drive Up WWL ASA Earnings
Norway-based shipping and logistics company Wallenius Wilhelmsen Logistics (WWL ASA) reported a profit of USD 86 million in the fourth quarter of 2017, compared to USD 17 million posted in the same period a year earlier.
Total income for WWL ASA was USD 1.04 billion in the fourth quarter of 2017, up 8% from 3Q 2017 and 13% from 4Q 2016.
As explained, the positive development was mainly driven by strong volumes which were up 11% q-o-q and 14% y-o-y. Volumes increased in all foundation trades, but the growth was strongest for Europe-Asia and the Atlantic trade. This was primarily driven by seasonally strong auto volumes which negatively impacted both the trade and cargo mix.
For ocean, the operating costs in the fourth quarter increased compared with the previous quarter, primarily driven by a negative effect from higher bunker prices and increased space charter expenses.
Furthermore, project cargo shipments in the Atlantic remained strong, but not at the same level as experienced in the third quarter. These factors combined with a less optimal trade and cargo mix offset the positive volume development, high utilization and increased synergy realization.
“We are pleased to see the good underlying results for the fourth quarter, although down from the third quarter. The positive impact of stronger ocean volumes was partly offset by increased net bunker costs and increased space charter expenses to handle said volumes,” Craig Jasienski, President and CEO of WWL ASA, commented.
The operating entities WWL and EUKOR have been part of anti-trust investigations in several jurisdictions since 2012. This process is now drawing towards an end with outstanding jurisdictions likely to reach their conclusion in 2018. Based on updated evaluations, WWL group is to increase the provision for anti-trust obligations from USD 300 million to USD 440 million.
“After close evaluation we have decided to increase antitrust provision with USD 140 million. The situation is regrettable, and we look forward to putting this matter behind us,” Jasienski added.
In April 2017, Wilh. Wilhelmsen ASA and WallRoll AB completed their merger and the new company was renamed to Wallenius Wilhelmsen Logistics ASA (WWL ASA).
Following good progress in realizing merger synergies, WWL group has decided to increase its synergy target from USD 100 million to USD 120 million by 2019. This quarter, the company has reached about USD 75 million in confirmed annualized synergies.
Wallenius Wilhelmsen Logistics ASA brings together the shipping and logistic businesses of EUKOR Car Carriers, WWL AS and American RoRo Carriers.
WWL group operated a fleet of 126 vessels with carrying capacity of 864K CEU. In addition, WWL group had six vessels on short term time charters.
Currently, the group has flexibility to redeliver 10 vessels in 2018 and 22 vessels in the period from 2019 to 2023. Four Post-Panamaxes are under construction with combined capacity of 32K CEU. Two of these vessels are expected to enter service in 2018 and two are scheduled for delivery in 2019.