Wilhelmsen Reports Full-Year Loss, 2019 Outlook Steady

Norwegian maritime industry group Wilhelmsen ended 2018 — the first full year with present corporate structure — in loss.

In the preliminary result for the year, the group reported a loss for the period of USD 75 million in 2018, compared to a loss of USD 2 million posted a year earlier.

The reporting period was followed by the full consolidation of NorSea Group in the new supply services segment, reclassification of Wilh. Wilhelmsen ASA prior to the Wallenius Wilhelmsen ASA merger as a discontinued operation, and reclassification of Hyundai Glovis as a financial investment.

Group EBITDA came in at USD 78 million for the year, down 60% from USD 198 million in 2017. EBITDA was up mainly due to full-year consolidation of NorSea Group.

Maritime services EBITDA was USD 42 million in 2018. When adjusting for M&A expenses related to the abandoned Drew acquisition, EBITDA was up 6% for the year. A weak first quarter was followed by a gradual improvement in underlying performance. This was supported by the increased sale of marine products, new vessels on management, and positive effects from ongoing improvement initiatives, as explained by Wilhelmsen.

What is more, the new supply services segment contributed with EBITDA of USD 51 million for the year. An increase in Norwegian offshore activities and a business restructuring had a positive effect on results, as well as logistics services for the NATO exercise Trident Juncture which took place during the second half of the year.

The holding and investments segment had a negative EBITDA of USD 14 million, mainly related to net corporate cost.

Additionally, Wilhelmsen recorded USD 36 million in share of profit from associates, of which Wallenius Wilhelmsen ASA contributed with USD 23 million. For Wallenius Wilhelmsen ASA, realised synergies and a positive development in underlying volumes were offset by reduced contractual volumes, higher bunker cost and lower rates.

The company suffered USD 116 million loss on financial assets, following a USD 61 million impairment of the Survitec investment and a USD 53 million reduction in the market value of the investment in Hyundai Glovis.

Quarterly performance

EBITDA ended at USD 29 million in the fourth quarter of 2018, down 12% from the previous quarter. A positive development in the maritime service segment was not enough to make up for reduced EBITDA in the supply service segment.

“The underlying performance was stable in a continued challenging market,” Thomas Wilhelmsen, group CEO, said.

“With activity levels on par with the previous quarter in ship service and ship management, the seasonally lower activity level in the offshore sector was offset by delivering logistics services to the NATO exercise Trident Juncture.”

“The value of our investments took a beating in the quarter, leaving us with a net loss of USD 40 million.”

“The beginning of 2019 has so far shown an uplift in valuation of listed entities,” he added.

Outlook

According to Wilhelmsen, market prospects for 2019 call for a steady, cautious outlook.

The group’s CEO said that the year will be characterized by initiatives aimed at strengthening profitability in all of its companies.

Based on the market outlook, the board expects a stable development of underlying operating performance, but with normal seasonal variations.

Wilhelmsen’s exposure towards global trade and potential introduction of further tariffs and restrictions continues to create uncertainties, according to the group.

“Wilhelmsen retains its robustness to meet such eventualities,” the group concluded.