Wilhelmsen Optimistic as Earnings Drop After Abandoned Drew Acquisition

Following the abandoning of Drew Marine acquisition, Norwegian maritime industry group Wilhelmsen ended the second quarter of 2018 in loss.

The group delivered a loss of USD 266 million in the second quarter of this year, compared to a loss of USD 47 million seen in the corresponding period a year earlier.

In addition, EBITDA was nil for the quarter, compared to USD 210 million in Q2 2017. As explained, it includes a termination fee and legal costs of USD 27 million related to the decision to abandon the acquisition of the technical solutions business from Drew Marine. Adjusted for the non-recurring items, the underlying profit is up 77% with a positive development in all reporting segments, according to the company.

“We believe the acquisition of Drew would have been a right strategic move for us and our customers, as it would have provided our customers with better services and better prices. Although we are disappointed that we were not able to close the deal, we will continue to develop our maritime services segment to the best for our customers,” Thomas Wilhelmsen, group CEO at Wilhelmsen, commented.

On the other hand, the total income for the second quarter was USD 222 million, up 5% from the first three months of 2018.

“We note that the positive development in top line in the first quarter continues into the second. Maritime services deliver stable revenue, while supply services record improved income following a seasonal upswing and property sales gains in NorSea Group,” Wilhelmsen said.

Wilhelmsen further said the contribution from the group’s holding and investments activities was negative for the quarter.

“We record an improvement in net profit in Wallenius Wilhelmsen, supported by volume growth. However, the value of our investment in Hyundai Glovis drops USD 250 million during the quarter. Adjusted for sale of part of the holding in Qube, the value of our other financial investments increased in value,” Wilhelmsen explained.

“Although the reduction of our financial assets value doesn’t have any cash effects, it leaves us with a net loss for the quarter when combined with the non-recurring costs related to the Drew acquisition,” the group’s CEO added.

“We are, however, financially robust and will continue to develop the group further. As examples, during the second quarter, we invested in the development company DoLittle, launched a cooperation with Airbus related to drones, and announced Massterly, the world’s first autonomous shipping company together with Kongsberg,” he pointed out.

After a weak start of the year, the underlying trend has been more optimistic for the group’s three business segments. The positive development is expected to continue into the third quarter.

A more negative sentiment towards global trade and potential introduction of further tariffs and restrictions create uncertainties on a medium-term basis, the group concluded.