Results for the third quarter 2014

A seasonal drop in volumes transported deep-sea lead to a decline in total income for WWH. Underlying performance is expected to improve in the fourth quarter, despite a continued challenging market for the group’s activities.
Press release | (Updated )

WWH delivered an operating profit of USD 83 million (USD 96 million) based on a total income of USD 924 million (USD 913 million). Compared with the previous quarter, the operating profit improved by 3%, although the total income declined by 4%. When adjusting for non-recurring items in Wilh. Wilhelmsen ASA (WWASA) and Wilhelmsen Maritime Services (WMS) operating profit fell 18%. Non-recurring items in the third quarter included a gain in Hyundai Glovis and impairment and restructuring in American Shipping and Logistics, both related to WWASA.

“The third quarter is characterised by seasonality for our shipping segment, including strike in Korea, affecting both sales, production and demand for transportation. Combined with an unfavourable cargo and trade mix this lead to a 5% decline in total income for our shipping segment compared with the previous quarter,” says Thomas Wilhelmsen, group CEO in WWH.

The contribution from the group’s logistics segment was mixed: “The activity level fell, mainly as a consequence of the loss of a major contract in American Shipping and Logistics. However, the underlying performance in the remaining logistics entities are sound.”

“Quarter on quarter, our maritime services segment delivered a stable income adjusted for seasonality, sales gain and currency. The operating profit was negatively affected by unfavourable product mix in ships service,” says Wilhelmsen. “With a difficult market, the operating margin was 6.3%, below our 9% target.”

Compared with the previous quarter, the Holding and Investment segment delivered a decline in total income, mainly related to reduced contribution from NorSea Group.

The board expects the market sentiment to remain challenging for the group’s main activities. However, the group’s underlying performance is anticipated to improve in the fourth quarter.

Elaborating on the market prospects, Mr Wilhelmsen says: “Despite a slight expected increase in volumes handled by our shipping and logistics segment, the unfavourable cargo and trade mix will have a negative effect on WWASA’s profitability. The market for maritime services is still hampered by slow global growth and a generally weak shipping market.”

WWH’s board has, based on an authorisation granted by the annual general meeting on 24 April 2014, resolved to pay a second dividend of NOK 2.00 per share, totalling USD 13.6 million. The shares will be traded ex dividend on Friday 14 November. The dividend will be paid on or about 27 November 2014.