Quarterly Report • Aug 9, 2018
Quarterly Report
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WILH. WILHELMSEN HOLDING ASA
• On 21 July, Wilhelmsen decided to abandon the acquisition of the technical solutions business from Drew Marine following US District Court ruling
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
|---|---|---|---|---|---|---|---|---|
| - unless otherwise indicated | Q2'18 | Q1'18 | Change | Q2'17 | Change | 30.06.18 | 30.06.17 | Change |
| Total income | 222 | 211 | 5 % | 344 | -36 % | 433 | 484 | -11 % |
| - of which operating revenue | 219 | 210 | 4 % | 146 | 50 % | 429 | 285 | 50 % |
| - of which gain/(loss) on sale of assets | 3 | 1 | 166 % | 198 | -98 % | 4 | 199 | -98 % |
| EBITDA | 0 | 15 | -97 % | 210 | -100 % | 16 | 214 | -93 % |
| Operating profit/EBIT | -9 | 5 | neg. | 206 | neg. | -4 | 206 | neg. |
| Share of profits from associates | 11 | 6 | 77 % | -4 | neg. | 17 | -4 | neg. |
| Change in fair value financial assets | -241 | 124 | -117 | |||||
| Other financial income/(expenses) | -30 | 11 | 23 | neg. | -18 | 31 | ||
| Tax income/(expenses) | 3 | -5 | -7 | neg. | -1 | -10 | ||
| Profit/(loss) from continued operations | -266 | 142 | neg. | 218 | neg. | -123 | 222 | neg. |
| Discontinued operations | -264 | -239 | ||||||
| Profit/(loss) for the period | -266 | 142 | neg. | -47 | neg. | -123 | -16 | neg. |
| Profit/(loss) to owners of the parent | -201 | 101 | neg. | -100 | neg. | -99 | -77 | neg. |
| EPS (USD) | -4,32 | 2,18 | neg. | -2,16 | neg. | -2,14 | -1,65 | neg. |
| Other comprehensive income | -41 | 31 | 53 | neg. | -10 | 74 | ||
| Total comprehensive income | -307 | 174 | neg. | 6 | neg. | -133 | 58 | neg. |
| Total comprehensive income owners of parent | -239 | 130 | neg. | -72 | neg. | -110 | -16 | neg. |
| Total assets | 3 136 | 3 478 | -10 % | 2 760 | 14 % | 3 136 | 2 760 | 14 % |
| Equity parent | 1 845 | 2 105 | -12 % | 1 955 | -6 % | 1 845 | 1 955 | -6 % |
| Total equity | 2 027 | 2 361 | -14 % | 2 129 | -5 % | 2 027 | 2 129 | -5 % |
| Equity ratio | 65 % | 68 % | -3 % | 77 % | -12 % | 65 % | 77 % | -12 % |
Total income for the Wilh. Wilhelmsen Holding ASA group (referred to as Wilhelmsen or group) was USD 222 million in the second quarter of 2018. This was a 5% increase from the previous quarter, mainly due to higher operating revenue within supply services.
EBITDA was nil for the quarter, including USD 27 million termination fee and legal cost related to the later abandoned Drew acquisition. Underlying EBITDA improved for both maritime services and supply services.
Share of profit from associates was USD 11 million, reflecting improved net result in Wallenius Wilhelmsen and NorSea Group associates.
Change in fair value of financial assets was negative with USD 241 million for the quarter, with reduced value of investment in Hyundai Glovis well offsetting a net increase for other investments.
Other financial items were a net expense of USD 30 million for the quarter, of which half are currency related items within maritime services.
Other comprehensive income for the quarter was a loss of USD 41 million, mainly currency translation differences related to non-USD assets.
Total comprehensive income, including net profit and other comprehensive income, attributable to owners of the parent was a loss of USD 239 million in the second quarter.
Total assets were down 10% in the second quarter, mainly due to reduced value of financial assets. In addition to lower asset prices, a stronger USD had a negative effect on value of both financial and other assets, when converting value of non-USD assets into USD.
A loss for the period and dividend payments reduced equity attributable to owners of the parent with 12% in the second quarter. As of 30 June 2018, the group equity ratio was 65%.
| Interest | ||
|---|---|---|
| bearing | ||
| USD mill | Cash | debt |
| Maritime services | 112 | 201 |
| Supply services | 9 | 353 |
| Holding and investments | 54 | 55 |
| Elimination | 0 | -18 |
| Wilhelmsen group | 175 | 591 |
Cash and cash equivalents was USD 175 million by the end of the second quarter, up USD 4 million from the previous quarter.
Interest bearing debt was USD 591 million by the end of the quarter. The USD 30 million reduction for the quarter was due to currency effect on non-USD debt and reduced drawdown on supply services and holding facilities.
During the quarter, NorSea Group completed a refinancing of majority of its interest-bearing debt.
Result for the half year reflected a net loss from fair value of financial assets and cost related to the abandoned Drew acquisition. Contribution from maritime services was some down, while the supply services segment and share of profit in Wallenius Wilhelmsen contributed positively.
Total comprehensive income to owners of the parent was a loss of USD 110 million in the first half.
The maritime services segment includes ships service, ship management and other maritime services activities.
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
|---|---|---|---|---|---|---|---|---|
| - unless otherwise indicated | Q2'18 | Q1'18 | Change | Q2'17 | Change | 30.06.18 | 30.06.17 | Change |
| Total income | 148 | 151 | -2 % | 147 | 1 % | 299 | 287 | 4 % |
| - Ships service | 138 | 140 | -2 % | 134 | 3 % | 278 | 263 | 6 % |
| - Ship management | 10 | 10 | -3 % | 11 | -10 % | 21 | 23 | -9 % |
| - Other/eliminations | 0 | 0 | 1 | 0 | 2 | |||
| EBITDA | -9 | 13 | neg. | 17 | neg. | 3 | 26 | -87 % |
| - EBITDA margin (%) | -6 % | 9 % | 12 % | 1 % | 9 % | |||
| Operating profit/EBIT | -13 | 9 | neg. | 13 | neg. | -5 | 19 | neg. |
| - EBIT margin (%) | -9 % | 6 % | 9 % | -2 % | 7 % | |||
| Share of profits from associates | 1 | 1 | 16 % | 1 | 41 % | 2 | 2 | |
| Change in fair value financial assets | -5 | 3 | -2 | |||||
| Other financial income/(expenses) | -19 | 1 | 1 | -18 | 6 | |||
| Tax income/(expense) | 4 | -3 | -4 | 1 | -7 | |||
| Profit/(loss) | -33 | 11 | neg. | 11 | neg. | -22 | 21 | neg. |
| - Profit margin (%) | -22 % | 7 % | 8 % | -7 % | 7 % | |||
| - Non controlling interest | 1 | 0 | 0 | 1 | 0 | |||
| Profit/(loss) to owners of the parent | -34 | 11 | neg. | 11 | neg. | -23 | 20 | neg. |
Total income from maritime services was USD 148 million in the second quarter. This was broadly in line with the previous quarter when adjusting for seasonality.
EBITDA was a loss of USD 9 million for the quarter. The quarter included non-recurring cost of USD 27 million related to Drew, of which USD 7 million was legal cost and USD 20 million was a provision for termination fee. Adjusting for non-recurring cost, EBITDA was USD 18 million, up 36% from the first quarter.
Financial items were a net expense of USD 23 million, with change in fair value of Survitec Group and net currency items being the main factors.
The quarter ended with a net loss after non-controlling interests of USD 34 million.
Wilhelmsen Ships Service is a global provider of standardised product brands and service solutions to the maritime industry, focusing on marine products, marine chemicals, maritime logistics and ships agency. Ships service is fully owned by Wilhelmsen.
Total income for ships service was down 2% from the first quarter. When compared with the corresponding period last year, income was up 3%. Sale of marine products continued its upward trend. Income from ships agency services was up also up for the quarter, while sale of nonmarine chemicals was down due to seasonality.
A more favourable product mix lifted operating profit when compared with a weak first quarter.
In June, Airbus and Wilhelmsen officially signed an MOU to develop an Unmanned Air System for maritime deliveries. Test-project will begin in Singapore in the third quarter.
Wilhelmsen Ship Management provides full technical management, crewing and related services for all major vessel types. Ship management is fully owned by Wilhelmsen.
Total income for ship management was down 3% from the first quarter, and down 10% when compared with the corresponding period last year. This followed a reduction in fleet under management and reduced lay-up activities.
Operating profit was also down for the quarter, following reduced income and ramp up cost related to the TenneT offshore wind contract.
In June, a new Wilhelmsen Ship Management office was opened in Southampton, UK, with 11 vessels on management.
This includes Wilhelmsen Insurance Services (fully owned Wilhelmsen), Survitec Group (owned ~20%) and certain corporate activites. Survitec Group is reported as financial assets.
The quarter included a USD 5 million loss from change in fair value of the Survitec investment, mainly currency related.
On 21 July, the United States' District Court for the District of Columbia announced that it will grant the US Federal Trade Commission motion for an injunction to block the planned acquisition by Wilhelmsen of the technical solutions business from Drew Marine. Consequently, Wilhelmsen and Drew have agreed to abandon the transaction.
The supply services segment includes NorSea Group, WilNor Governmental Services and other supply services activities. (New segment from 26 September 2017, with activities previously reported under the holding and investments segment)
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
|---|---|---|---|---|---|---|---|---|
| - unless otherwise indicated | Q2'18 | Q1'18 | Change | Q2'17 | Change | 30.06.18 | 30.06.17 | Change |
| Total income | 73 | 59 | 23 % | 132 | ||||
| - NorSea Group | 70 | 56 | 24 % | 126 | ||||
| - Other/eliminations | 3 | 3 | 0 % | 7 | ||||
| EBITDA | 14 | 6 | 125 % | 20 | ||||
| - EBITDA margin (%) | 19 % | 11 % | 15 % | |||||
| Operating profit/EBIT | 9 | 1 | >500% | 9 | ||||
| - EBIT margin (%) | 12 % | 1 % | 7 % | |||||
| Share of profit from associates | 4 | 1 | 174 % | 5 | ||||
| Other financial income/(expense) | -4 | -4 | -8 | |||||
| Tax income/(expense) | -1 | -1 | -2 | |||||
| Profit/(loss) | 8 | -3 | neg. | 5 | ||||
| - Profit margin (%) | 11 % | -5 % | 4 % | |||||
| - Non controlling interest | 3 | -1 | 2 | |||||
| Profit/(loss) to owners of the parent | 5 | -2 | neg. | 4 |
Total income from supply services was USD 73 million in the second quarter, up 23% from the previous quarter. The increase followed higher income in NorSea Group.
EBITDA came in at USD 14 million for the quarter, while share of profit from associates was USD 4 million. Both improved from the first quarter, supported by seasonality and sales gains. Other financial items were stable, with a net expense of USD 4 million.
Net profit after minority interests was USD 5 million for the quarter.
NorSea Group provides supply bases and integrated logistics solution to the offshore industry. Wilhelmsen owns ~75,2% of NorSea Group (40% ownership until 26 September and ~74,2% as per 31 December 2017). NorSea Group is fully consolidated in the Wilhelmsen's accounts from end of the third quarter 2017.
Total income for NorSea Group was USD 70 million in the second quarter, up 24% from the first quarter. Income from supply base services increased, reflecting a traditionally stronger summer season. Income from infrastructure and facilities was also up, lifted by a property sales gain.
Operating profit increased, benefitting from the seasonal upswing in activities, a sales gain, and improved performance for non-Norwegian activities. Seasonality and a sales gain also lifted share of profit from associates. In total, property sales gains had a USD 3 million impact on the net result for the quarter.
This includes WilNor Governmental Services (owned 51% directly and 49% through NorSea Group) and certain minor supply services activities.
Income for WilNor Governmental Services, mainly reported on a pass-through basis, was stable for the quarter.
The holding and investments segment includes investments in Wallenius Wilhelmsen ASA and Treasure ASA, financial assets, and other holding and investments activities.
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
|---|---|---|---|---|---|---|---|---|
| - unless otherwise indicated | Q2'18 | Q1'18 | Change | Q2'17 | Change | 30.06.18 | 30.06.17 | Change |
| Total income | 3 | 3 | 2 % | 200 | -99 % | 6 | 205 | -97 % |
| - Operating revenue | 3 | 3 | 2 % | 5 | -44 % | 6 | 10 | -46 % |
| - Gain on sale of assets | 0 | 0 | 195 | 0 | 195 | |||
| EBITDA | -4 | -4 | 193 | -8 | 187 | |||
| Operating profit/EBIT | -4 | -4 | 192 | -8 | 187 | |||
| Share of profit from associates | 6 | 4 | 55 % | -5 | neg. | 10 | -6 | neg. |
| - Wallenius Wilhelmsen ASA | 6 | 4 | 55 % | -9 | neg. | 10 | -9 | neg. |
| - Other/eliminations | 0 | 0 | 4 | 0 | 3 | |||
| Change in fair value financial assets | -236 | 121 | -115 | |||||
| - Hyundai Glovis | -250 | 144 | -107 | |||||
| - Qube Holdings/other financial assets | 15 | -23 | -8 | |||||
| Other financial income/(expenses) | -7 | 14 | neg. | 22 | neg. | 7 | 25 | -71 % |
| - Investment management (Holding) | -3 | -1 | 1 | -4 | 1 | |||
| - Hyundai Glovis | 0 | 12 | 0 | 12 | 0 | |||
| - Qube Holdings/other financial assets | 0 | 1 | 8 | 1 | 10 | |||
| - Other financial income/(expense) | -4 | 1 | 14 | -3 | 14 | |||
| Tax income/(expense) | 0 | 0 | -3 | 0 | -4 | |||
| Profit/(loss) for the period | -241 | 134 | 206 | -106 | 202 | |||
| - Non controlling interest | -68 | 42 | 53 | -26 | 53 | |||
| Profit/(loss) to owners of the parent | -172 | 92 | 153 | -80 | 149 |
The holding and investments segment reported a net loss of USD 172 million in the second quarter, following a strong fall in the value of the investment in Hyundai Glovis. A net profit in Wallenius Wilhelmsen ASA and a gain from the investment in Qube Holdings had a positive impact.
Wallenius Wilhelmsen ASA is a global provider of ocean and landbased logistics services towards car and ro-ro customers, and is listed on the Oslo Stock Exchange. Wilhelmsen owns ~37,8% of the company, which is reported as associate in Wilhelmsen's accounts.
Total income for Wallenius Wilhelmsen ASA was USD 1 044 million in the second quarter, up 8% from the previous quarter and up 7% when compared with the corresponding period last year. Ocean income was supported by strong underlying volume development and increased fuel compensation. Seasonality contributed positively when compared with the previous quarter, while contracted reductions in Hyundai Motor Group volumes negatively impacted development when compared with last year. For land-based operations, income were positively impacted by the Melbourne terminal being fully operational and the acquisition of Keen Transport.
Reported EBITDA was USD 156 million in the second quarter, up 24% from a weak first quarter but down when compared with corresponding period last year. Rate reductions, reduced Hyundai Motor Group volumes, increased bunker cost and trade imbalances continued to outweight positive volume development and realised synergies. At the end of the second quarter about USD 110
million of the USD 120 million synergy target was confirmed.
Wilhelmsen's share of profit in Wallenius Wilhelmsen ASA was USD 6 million in the second quarter.
Post quarter, Wallenius Wilhelmsen ASA announced an aqusition of 70% of the shares in Syngin Technologies.
Treasure ASA holds a 12.04% ownership interest in Hyundai Glovis, and is listed on the Oslo Stock Exchange. Wilhelmsen owns ~72.7% of Treasure ASA. Hyundai Glovis is from 4 April 2017 reported as financial assets in the Wilhelmsen's accounts.
Change in fair market value of the shareholding in Hyundai Glovis was negative with USD 250 million for the quarter. The market value at the end of the second quarter was USD 469 million.
In May, a proposed restructuring plan for the Hyundai Motor Group was withdrawn due to possible lack of support amongst certain shareholders. Subsequent to the withdrawal of the restructuring plan, the Hyundai Glovis share price decreased significantly.
Financial investments include cash and cash equivalents, current financial investments and other financial assets held by the parent and fully owned subsidiaries.
Change in fair market value of the shareholdings in Qube Holdings and other financial assets was a gain of USD 15 million for the quarter. The market value at the end of the second quarter was USD 101 million. During the quarter, Wilhelmsen sold 15 million shares in Qube, with a net cash proceed of USD 27 million. Following the sale, Wilhelmsen owns 50 million shares in Qube.
The current financial investment portfolio held by Wilhelmsen was USD 91 million by the end of the second quarter. The portfolio primarily included listed equities and investment-grade bonds. Net income from investment management was a loss of USD 2 million in the second quarter.
The Wilhelmsen group consists of operating companies and investments exposed to the global economy and world merchandised trade. The main risks as considered by the board at that time are described in the annual report for 2017. While risk in general remains as described in the annual report, certain individual risk factors have been impacted by events which have taken place after completion of the annual report. Main events and impacts are described below.
Global growth remains strong, but tension has increased related to trade agreements and imbalances. New import tariffs have been introduced or threatened to be introduced by certain countries. The future potential impact of these actions on Wilhelmsen remains uncertain.
Other holding and investments activities Holding/other activities includes general holding activities.
Underlying income and EBITDA was at normal levels for the quarter.
The planned USD 400 million acquisition of the technical solutions business from Drew Marine has been abandoned, following a negative ruling by the US Court. The decision will not have any direct consequences for Wilhelmsen apart from the USD 20 million termination fee, but will impact the strategic development of Ships services.
The share prices of the two largest investments exposed to market prices, Wallenius Wilhelmsen ASA and Treasure ASA, have fallen. While the change in market prices for these investments are not affecting the consolidated accounts, it reduces the value adjusted equity of Wilhelmsen.
Focus on improving the operating margin, strengthening profitability and growing the business will remain. A strategic review will be made related to future growth alternatives, following agreement to terminate the planned Drew acquisition.
The positive effect from the restructuring process within NorSea Group lifted the supply services segment operating profit in the second quarter, with further effects expected when fully implemented.
Wallenius Wilhelmsen maintains a balanced view on prospects.
Potential changes in Hyundai Glovis shareholding structure and business remains uncertain, following withdrawal of the proposed Hyundai Motor Group restructuring plan.
After a weak start of the year, the underlying trend has been more optimistic for all 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.
Lysaker, 9 August 2018 The board of directors of Wilh. Wilhelmsen Holding ASA
Forward-looking statements presented in this report are based on various assumptions. These assumptions were reasonable when made, but as assumptions are inherently subject to uncertainties and contingencies which are difficult or impossible to predict. Wilhelmsen cannot give assurances that expectations regarding the future outlook will be achieved or accomplished.
| USD mill Note |
Q2 | Q2 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Operating revenue | 219 | 146 | 429 | 285 | 632 |
| Other income | |||||
| Gain/(loss) on sale of assets 2 |
3 | 198 | 4 | 199 | 161 |
| Total income | 222 | 344 | 433 | 484 | 793 |
| Operating expenses | |||||
| Cost of goods and change in inventory | (64) | (42) | (131) | (87) | (194) |
| Employee benefits | (82) | (57) | (165) | (117) | (252) |
| Other expenses | (76) | (35) | (122) | (67) | (150) |
| Operating profit before depreciation and amortisation | 0 | 210 | 16 | 214 | 198 |
| Depreciation and impairments 3 |
(10) | (4) | (20) | (8) | (22) |
| Operating profit | (9) | 206 | (4) | 206 | 176 |
| Share of profits from joint ventures and associates 4 Change in fair value financial assets 9 |
11 (241) |
(4) - |
17 (117) |
(4) - |
55 - |
| Other financial income/(expenses) 7 |
(30) | 23 | (18) | 31 | 22 |
| Profit before tax | (269) | 225 | (122) | 233 | 253 |
| Tax income/(expense) | 3 | (7) | (1) | (10) | (16) |
| Profit from continued operations | (266) | 218 | (123) | 222 | 236 |
| Discontinued operations | |||||
| Net profit/(loss) from discontinued operations (net after tax) 6 |
- | (264) | - | (239) | (239) |
| Profit for the period | (266) | (47) | (123) | (16) | (2) |
| Attributable to: non-controlling interests continued operations | (65) | 53 | (24) | 53 | 55 |
| non-controlling interests discontinued operations | - | - | - | 7 | 7 |
| owners of the parent | (201) | (100) | (99) | (77) | (64) |
| Basic earnings per share (USD) 8 |
(4,32) | (2,16) | (2,14) | (1,65) | (1,38) |
| Comprehensive income - financial report | |||||
| Q2 | Q2 | YTD | YTD | Full year | |
| USD mill | 2018 | 2017 | 2018 | 2017 | 2017 |
| Profit for the period | (266) | (47) | (123) | (16) | (2) |
| Items that may be reclassified to income statement | |||||
| Cash flow hedges (net after tax) | 0 | 2 | |||
| Revaluation mark to market value available for sale financial assets | 47 | 53 | 3 | ||
| Comprehensive income from associates | (1) | (1) | (1) | ||
| Currency translation differences | (41) | (67) | (12) | (53) | 47 |
| Currency translation differences recycled to income statement as part of loss of sale of assets | - | 28 | |||
| Comprehensive income discontinued operations | (2) | (1) | (1) | ||
| Items that will not be reclassified to income statement | - | ||||
| Currency translation differences investments | 76 | 76 | - | ||
| Other comprehensive income, net of tax | (41) | 53 | (10) | 74 | 77 |
| Total comprehensive income for the period | (307) | 6 | (133) | 58 | 75 |
| Total comprehensive income attributable to: | |||||
| Owners of the parent continued operations | (239) | 192 | (110) | 223 | 251 |
| Owners of the parent discontinued operations | (264) | (239) | (239) | ||
| Non-controlling interests | (67) | 78 | (23) | 74 | 64 |
| Total comprehensive income for the period | (307) | 6 | (133) | 58 | 75 |
The above consolidated income statement should be read in conjunction with the accompanying notes.
| USD mill | Note | 30.06.2018 | 30.06.2017 | 31.12.2017 |
|---|---|---|---|---|
| Deferred tax asset | 5 | 26 | 17 | 18 |
| Goodwill and other intangible assets | 3 | 171 | 162 | 171 |
| Vessels, property and other tangible assets | 3 | 574 | 181 | 590 |
| Investments in joint ventures and associates | 4 | 1 018 | 883 | 1 019 |
| Financial assets to fair value | 9 | 650 | 845 | 801 |
| Other non current assets | 23 | 48 | 37 | |
| Total non current assets | 2 460 | 2 135 | 2 637 | |
| Inventory | 77 | 73 | 81 | |
| Current financial investments | 91 | 91 | 101 | |
| Other current assets | 333 | 226 | 302 | |
| Cash and cash equivalents | 175 | 235 | 167 | |
| Total current assets Total assets |
676 3 136 |
625 2 760 |
651 3 288 |
|
| Paid-in capital | 8 | 122 | 122 | 122 |
| Retained earnings | 8/10 | 1 724 | 1 833 | 1 853 |
| Attributable to equity holders of the parent | 1 845 | 1 955 | 1 975 | |
| Non-controlling interests | 182 | 173 | 212 | |
| Total equity | 2 027 | 2 129 | 2 188 | |
| Pension liabilities | 23 | 24 | 23 | |
| Deferred tax | 5 | 9 | 14 | 6 |
| Non-current interest-bearing debt | 11 | 489 | 234 | 493 |
| Other non-current liabilities | 113 | 100 | 112 | |
| Total non current liabilities | 635 | 372 | 634 | |
| Current income tax | 4 | 5 | 11 | |
| Public duties payable | 9 | 5 | 7 | |
| Current interest-bearing debt | 11 | 102 | 0 | 108 |
| Other current liabilities | 359 | 249 | 341 | |
| Total current liabilities | 474 | 260 | 466 | |
| Total equity and liabilities | 3 136 | 2 760 | 3 288 |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
| USD mill | Q2 | Q2 | YTD | YTD | Full year | |
|---|---|---|---|---|---|---|
| Note | 2018 | 2017* | 2018 | 2017* | 2017* | |
| Cash flow from operating activities | ||||||
| Profit before tax | (269) | (40) | (122) | (7) | 14 | |
| Share of profit from joint ventures and associates | (11) | 5 | (17) | (10) | (69) | |
| Change in fair value financial assets | 9 | 242 | (23) | 117 | (21) | |
| Other financial (income)/expenses | 29 | (10) | 18 | (12) | (6) | |
| Financial derivatives unrealised | (8) | |||||
| Depreciation/impairment | 3 | 10 | 4 | 20 | 28 | 42 |
| Loss/ (gain) on sale of fixed assets | 3 | (5) | (0) | (4) | (9) | (11) |
| (Gain)/loss from sale of subsidiaries, joint ventures and associates | 6 | - | (52) | - | (52) | 107 |
| Change in net pension asset/liability | 2 | 2 | 0 | 1 | (5) | |
| Change in inventory | 0 | (11) | 4 | (12) | (21) | |
| Change in other working capital | (29) | 26 | (28) | 14 | 38 | |
| Tax paid (company income tax, withholding tax) | (2) | (5) | (5) | (7) | (11) | |
| Net cash provided by operating activities | (34) | (104) | (17) | (86) | 70 | |
| Cash flow from investing activities | ||||||
| Dividend received from joint ventures and associates | 16 | 14 | 18 | 15 | 18 | |
| Proceeds from sale of fixed assets | 3 | 14 | - | 14 | 54 | 63 |
| Investments in fixed assets | 3 | (10) | (8) | (18) | (12) | (29) |
| Net proceeds from sale of subsidiaries | 7 | 14 | 7 | 14 | 14 | |
| Cash discontinued operations | 6 | - | - | - | - | (121) |
| Investments in subsidiaries, joint ventures and associates | (0) | (21) | (1) | (21) | (89) | |
| Loan repayments received from joint ventures and associates | 17 | - | 17 | - | - | |
| Proceeds from sale of financial investments | 53 | 16 | 62 | 101 | 111 | |
| Current financial investments | (14) | (4) | (21) | (43) | (58) | |
| Interest received | 3 | 1 | 3 | 1 | 5 | |
| Net cash flow from investing activities | 86 | 10 | 81 | 108 | (87) | |
| Cash flow from financing activities | ||||||
| Proceeds from issue of debt | 62 | 30 | 72 | 30 | 230 | |
| Repayment of debt | (77) | - | (86) | (64) | (271) | |
| Interest paid including interest derivatives | (8) | (9) | (15) | (33) | (37) | |
| Cash from financial derivatives | - | 3 | - | 7 | - | |
| Dividend to shareholders/purchase of own shares | (26) | (23) | (26) | (23) | (36) | |
| Net cash flow from financing activities | (48) | 1 | (54) | (83) | (114) | |
| Net increase in cash and cash equivalents 1 | ||||||
| Cash and cash equivalents at the beg. of the period 1 | 4 171 |
(93) 328 |
9 166 |
(61) 296 |
(130) 296 |
|
| Cash and cash equivalents at the end of the period 1 | 175 | 235 | 175 | 235 | 167 | |
| * 2017 including discontinued operations | ||||||
| The net cash flow from discontnued operations are: | 6 | |||||
| Net cash provided by operating activities from discontinued operations Net cash provided by investing activities from discontinued operations |
7 107 |
7 107 |
||||
| Net cash provided by financing activities from discontinued operations | (74) | (74) | ||||
| Cash and cash equivalents related to discontinued operations (at the end of the | ||||||
| period) at 31.03.2017 1 Excluding restricted cash. |
121 | 121 |
The group is located and operating world wide, and every entity has several bank accounts in different currencies. Unrealised currency effects are included in net cash provided by operating activities.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Wilh. Wilhelmsen Holding group Q2 2018 unaudited 10 of 24
| Retained | Non controlling |
||||
|---|---|---|---|---|---|
| USD mill | Share capital | earnings | Total | interests | Total equity |
| Balance at 31.12.2017 | 122 | 1 853 | 1 975 | 212 | 2 188 |
| Profit for the period | (99) | (99) | (24) | (123) | |
| Other comprehensive income | (10) | (10) | 1 | (10) | |
| Change in non-controlling interests | (2) | (2) | |||
| Paid dividends to shareholders | (20) | (20) | (5) | (26) | |
| Balance 30.06.2018 | 122 | 1 723 | 1 845 | 182 | 2 027 |
| Balance at 31.12.2016 | 122 | 1 868 | 1 990 | 502 | 2 492 |
| Profit for the period included discontinued operations | (76) | (76) | 60 | (16) | |
| Other comprehensive income | 61 | 61 | 13 | 74 | |
| Outgoing non-controlling interests | (398) | (398) | |||
| Paid dividends to shareholders | (19) | (19) | (4) | (23) | |
| Balance 30.06.2017 | 122 | 1 834 | 1 955 | 173 | 2 129 |
| Retained | Non controlling |
||||
|---|---|---|---|---|---|
| USD mill | Share capital | earnings | Total | interests | Total equity |
| Balance at 31.12.2016 | 122 | 1 868 | 1 990 | 502 | 2 492 |
| Profit for the period | (64) | (64) | 62 | (2) | |
| Other comprehensive income | 77 | 77 | (1) | 77 | |
| Incoming non-controlling interests | 53 | 53 | |||
| Change in non-controlling interests | 3 | 4 | |||
| Outgoing non-controlling interests | (398) | (398) | |||
| Paid dividends to shareholders | (28) | (28) | (8) | (36) | |
| Balance 31.12.2017 | 122 | 1 853 | 1 975 | 212 | 2 188 |
The above consolidated statement of statement of changes in equity should be read in conjunction with the accompanying notes.
This consolidated interim financial report has been prepared in accordance with International Accounting Standards (IAS 34), "interim financial reporting". The consolidated interim financial reporting should be read in conjunction with the annual financial statements for the year end 31 December 2017 for Wilh.Wilhelmsen Holding ASA group (WWI), which has been prepared in accordance with IFRS's endorsed by the EU.
The accounting policies implemented are consistent with those of the annual financial statements for WWI for the year end 31 December 2017.
IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments impairment of assets and hedge accounting. The adoption of IFRS 9 Financial instruments from 1 January 2018 resulted in changes in accounting policies and adjustments to the amounts recognized in the financial statements.
The group has only one type of financial asset that is subject to IFRS 9's new expected credit loss model:
-Trade receivables for sale of services
Second quarter
No material disposal or acquistion.
No material disposal or acquistion.
No material disposal or acquistion has been made, except increased the ownership in NorSea Group with 2.11% throgh acquisition of shares from NorSea Group's management.
Per 26.09.2017 the group increased it's ownership in NorSea to 72% from previously held 40%. Total consideration for the additional 32% investment in NorSea Group is NOK 545 million (USD 70 million). The investment was financed through existing liquidity and funding reserves.
The remeasurement loss upon consolidation of the former NorSea Group was USD 40 mill.
NorSea Group and WilNor Govermental Service will be presented in a new segment "Supply Services" from 30.09.2017.
The merger between Wall Roll AB (part of Wallenius Rederiarna AB) and Wilh. Wilhelmsen ASA was completed in beginning of April. After the completion the group own 37.8% of Wallenius Wilhelmsen ASA. The investment is treated as an The group was required to revise its impairment methodology under IFRS 9 for the class of asset. The impact of the change in impairment on the group's level is immaterial and no adjustments have been done at the retained earnings.
Classification investments and other financial assets. 1 January 2018, the group classifiy its financial assets in the following measurement category:
Changes in the fair value of financial assets at fair value through income statement are recognized at income statement as "Changes in fair value financial assets", see note 9.
The group has adopted IFRS 15 Revenue from Contracts with Customers from 1 January 2018 which resulted in no material changes.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
associate company (equity method). The merger effect was an accounting loss of USD 264 mill and presented as discontinued operations. The initial investment cost was stock price 4 April 2017 NOK 42.50 per share.
In addition the group acquired Kemetyl Konsument Norge AS at 1 April 2017. The investment cost was approximately USD 20 mill.
The presentation of the investment in Hyundai Glovis Ltd was changed from an associate to financial assets to fair value. The change in accounting principle give an accounting gain of USD 195 mill. The accounting principle of the investment is in line with Treasure ASA presentation.
No material disposal or acquistion. The presentation of segment WWASA is reclassed to discontinued operations.
| Other tangible | Intangible | Total tangible and intangible |
|||
|---|---|---|---|---|---|
| USD mill | Vessels | Property | assets | assets | assets |
| 2018 | |||||
| Cost 1.1 | 36 | 575 | 269 | 243 | 1 123 |
| Acquisition | - | 8 | 8 | 3 | 19 |
| Reclass/disposal | - | (18) | (29) | (10) | (57) |
| Currency translation differences | 0 | (3) | (3) | 0 | (5) |
| Cost 30.06 | 36 | 563 | 245 | 236 | 1 080 |
| Accumulated depreciation and impairment losses 1.1 | (17) | (159) | (114) | (71) | (362) |
| Depreciation/amortisation | (1) | (10) | (6) | (4) | (20) |
| Reclass/disposal | - | 1 | - | 10 | 43 |
| Currency translation differences | (0) | 2 | 1 | (0) | 2 |
| Accumulated depreciation and impairment losses 30.06 | (18) | (161) | (92) | (65) | (336) |
| Carrying amounts 30.06 | 19 | 402 | 153 | 171 | 744 |
| 2017 | |||||
| Cost 1.1 | 2 457 | 90 | 189 | 208 | 2 944 |
| Acquisition | 0 | 1 | 11 | 22 | 33 |
| Reclass/disposal | (2 457) | (6) | (6) | (2 470) | |
| Currency translation differences | - | 5 | 8 | 5 | 19 |
| Cost 30.06 | 0 | 95 | 202 | 229 | 526 |
| Accumulated depreciation and impairment losses 1.1 | (579) | (38) | (72) | (63) | (752) |
| Depreciation/amortisation | (1) | (3) | (3) | (8) | |
| Depreciation discontinued operations | (20) | (0) | (20) | ||
| Reclass/disposal | 599 | 3 | (0) | 602 | |
| Currency translation differences | - | (2) | (2) | (1) | (5) |
| Accumulated depreciation and impairment losses 30.06 | 0 | (42) | (75) | (68) | (184) |
| Carrying amounts 30.06 | 0 | 53 | 127 | 162 | 342 |
| 2017 Full year | |||||
| Cost 1.1 | 2 457 | 90 | 189 | 208 | 2 944 |
| Acquisition | 0 | 4 | 21 | 3 | 29 |
| Business combination | 38 | 479 | 57 | 30 | 604 |
| Reclass/disposal | (2 458) | 13 | (10) | (8) | (2 462) |
| Currency translation differences | (1) | (11) | 12 | 10 | 9 |
| Cost 31.12 | 36 | 575 | 269 | 243 | 1 123 |
| Accumulated depreciation and impairment losses 1.1 | (579) | (38) | (72) | (63) | (752) |
| Depreciation/amortisation | (0) | (6) | (9) | (6) | (22) |
| Depreciation discontinued operations | (20) | (0) | (20) | ||
| Business combination | (17) | (100) | (37) | (1) | (156) |
| Reclass/disposal | 599 | (15) | 6 | 1 | 592 |
| Currency translation differences | 1 | 1 | (3) | (2) | (4) |
| Accumulated depreciation and impairment losses 31.12 | (17) | (159) | (114) | (71) | (362) |
| Carrying amounts 31.12 | 19 | 416 | 155 | 171 | 761 |
The restructuring of the group has changed the presentation of investment in associates. The net profit from associates has been moved from operating activities to be a part of investing and financial activities in the group.
As a consequence of the merger between Wilh. Wilhelmsen ASA and Wall Roll AB, the investment in Wallenius Wilhelmsen ASA (previously named Wallenius Wilhelmsen Logistics ASA) is classified as associate.
In addition the investment in Hyundai Glovis has been changed from associate to a financial assets at fair value at the same time as the merger between Wilh. Wilhelmsen ASA and Wall Roll AB.
Per 26.09.2017 the group increased the ownership in NorSea Group to 72% changing the presentation of NorSea from investment in associate to investment in subsidiary. Per Q2 2018 the ownership has increased to 75.15% through acquisition of shares from NorSea Group's management.
Material joint ventures and associates at the end June 2018 are: USD mill
| 30.06.2018 | ||
|---|---|---|
| Holding and Investments segment: | Ownership | Booked value |
| Wallenius Wilhelmsen ASA | 37.8% | 839 |
| Dolittle AS | 50 % | 1 |
| Maritime service segment: | ||
| Associates | 20 - 50% | 12 |
| Supply services segment: | ||
| Joint venture | ||
| Cost Center Base | 50 % | 104 |
| Vikan Næringspark Invest AS | 50 % | 16 |
| Other | 50 % | 0 |
| Associates | ||
| Risavika Havn AS | 42.8% | 30 |
| Risavika Eiendom AS | 42 % | 9 |
| Hammerfest Næringsinvest AS | 32 % | 2 |
| Other | 33 - 49% | 6 |
| Total investment in joint ventures and associates | 1 017 | |
| Q2 | Q2 | YTD | YTD | |
|---|---|---|---|---|
| Share of profit from joint ventures and associates | 2018 | 2017 | 2018 | 2017 |
| Wallenius Wilhelmsen ASA | 6 | (9) | 10 | (9) |
| Joint ventures and associates in Supply Services | 4 | 4 | 5 | 3 |
| Associates in Maritime Services | 1 | 3 | 2 | 2 |
| Share of profit from joint ventures and associates | 11 | (4) | 17 | (4) |
The effective tax rate for the group will, from period to period, change dependent on the group gains and losses from investments inside the exemption method.
On 4 April 2017 the subsidiary Wilh. Wilhelmsen ASA was merged with Wall Roll AB. After the merger the group own 37.8% of the Wallenius Wilhelmsen ASA (renamed in 2018). The profit in Wilh. Wilhelmsen ASA previous periods is presented as discontinued operations in WWH. The assets and liabilities from WWASA segment are included in the group balance sheet at 31.03.2017.
Financial information (income statement and net assets) relating to the discontinued operations for each period to the date of disposal is set out below.
Prior to the merger, WWH owned 160 000 000 shares in Wilh. Wilhelmsen ASA. Number of shares in Wallenius Wilhelmsen ASA remains unchanged after the merger.
| Full year 2017 | |
|---|---|
| Details of the merger between the subsidiary Wilh. Wilhelmsen ASA and Wall Roll AB | |
| Cash | 14 |
| Shares in Wallenius Wilhelmsen ASA (market value) | 789 |
| Total disposals consideration | 804 |
| Carrying amount of net assets disposal | 1 062 |
| Currency translation differences | (5) |
| Accounting loss (discontinued operations) majority (Q2 2017) | (264) |
| Net profit before non-controlling interests Q1 2017 | 26 |
| Profit from discontinued operations | (239) |
| Q2 | Q2 | YTD | YTD | Full year | |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Investment management | (2) | 6 | (6) | 10 | 5 |
| Interest income | 3 | 1 | 3 | 1 | 5 |
| Other financial income | 0 | 8 | 15 | 10 | 12 |
| Interest expenses | (12) | (3) | (18) | (17) | (14) |
| Net financial currency | (19) | 12 | (12) | 26 | 14 |
| Other financial income/(expenses) | (30) | 23 | (18) | 31 | 22 |
The share capital is as follow with a nominal value of NOK 20:
| A - shares | 34 537 092 |
|---|---|
| B - shares | 11 866 732 |
| Total shares | 46 403 824 |
The annual general meeting on 26 April 2018 approved the proposed liquidation of 100 000 own class A shares, denominated NOK 20 per share.
The share capital is reduced from NOK 930 076 480 by NOK 2 000 000 to NOK 928 076 480.
Basic earnings per share is calculated by dividing profit for the period after minority interests, by average number of total outstanding shares.
Earnings per share is calculated based on 46 403 824 shares for 2018, and each quarter in 2017.
| USD mill | 31.12.2017 |
|---|---|
| ---------- | ------------ |
| Available-for-sale financial assets | |
|---|---|
| At 1 January | 209 |
| Acquisition | 12 |
| Sale during the year | (11) |
| Change of accounting principle Hyundai Glovis | 573 |
| Currency translation adjustment | 18 |
| Total available-for-sale financial assets | 801 |
Financial assets to fair value are held in subsidiaries with different functional currencies and thereby creating translation adjustment.
Effective from 1 January 2018 the financial assets to fair value are measured at fair value through the income statement in accordance with IFRS 9.
| Accumulated unrealised gain at 31.12.2017 will not be recycled through income statement. | |||||||
|---|---|---|---|---|---|---|---|
| Fair value 1 January 2018 | 801 | ||||||
| Acquisition | 1 | ||||||
| Sale during the year | (27) | ||||||
| Currency translation adjustment through other comprehensive income | (8) | ||||||
| Change in fair value through income statement | (117) | ||||||
| Fair value 30 June 2018 | 650 |
Dividend for fiscal year 2016 was NOK 5.00 per share, where NOK 3.50 per share was paid in May 2017 and NOK 1.50 per share was paid in November 2017.
The proposed dividend for fiscal year 2017 in 2018 of NOK 3.50 per share, was approved by the annual general meeting on 26 April 2018, and was paid to the shareholders in May 2018.
| USD mill | 30.06.2018 | 30.06.2017 | 31.12.2017 |
|---|---|---|---|
| Non current interest-bearing debt | 489 | 234 | 493 |
| Current interest-bearing debt | 102 | 108 | |
| Total interest-bearing debt | 591 | 234 | 601 |
| Cash and cash equivalents | 175 | 235 | 167 |
| Current financial investments | 91 | 91 | 101 |
| Net interest-bearing debt | 326 | (92) | 333 |
Loan agreements entered into by group companies contain financial covenants related to equity ratio, liquidity, current ratio and net interest-bearing debt / EBITDA measured in respect of the relevant borrowing company or group of
companies. The group was in compliance with these covenants at 30 June 2018 (analogous for 30 June 2017).
| Specification of interest-bearing debt | |||
|---|---|---|---|
| USD mill | 30.06.2018 | 30.06.2017 | 31.12.2017 |
| Interest-bearing debt | |||
| Bankloan | 591 | 234 | 601 |
| Total interest-bearing debt | 591 | 234 | 601 |
| Repayment schedule for interest-bearing debt | |||
| Due in 1 year | 102 | 0 | 108 |
| Due in 2 year | 24 | 34 | 25 |
| Due in 3 year | 24 | 200 | 22 |
| Due in 4 year | 20 | 0 | 22 |
| Due in 5 year and later | 421 | 0 | 425 |
| Total interest-bearing debt | 591 | 234 | 601 |
| USD mill | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| 2018 | ||||
| Financial assets at fair value | ||||
| Equities | 47 | 47 | ||
| Bonds | 44 | 44 | ||
| Financial derivatives | -0 | 1 | 1 | |
| Financial assets at fair value | 557 | 92 | 650 | |
| Total financial assets 30.06 | 648 | 1 | 92 | 742 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 12 | 12 | ||
| Total financial liabilities 30.06 | 0 | 12 | 0 | 12 |
| 2017 | ||||
| Financial assets at fair value | ||||
| Equities | 48 | 48 | ||
| Bonds | 42 | 0 | 42 | |
| Financial derivatives | 0 | 0 | ||
| Financial assets at fair value | 751 | 94 | 845 | |
| Total financial assets 30.06 | 841 | 0 | 94 | 935 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 0 | |||
| Total financial liabilities 30.06 | 0 | 0 | 0 | 0 |
The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. The fair value of financial instruments that are not traded in an active market (over-the-counter contracts) are based on third party quotes. These quotes use the maximum number of observable market rates for price discovery. Specific valuation techniques used by financial counterparties (banks) to value financial derivatives include:
Quoted market prices or dealer quotes for similar derivatives
The fair value of interest rate swaps is calculated as the net present value of the estimated future cash flows based on observable yield curves
The fair value of interest rate swap option (swaption) contracts is determined using observable volatility, yield curve and time-to-maturity parameters at the balance sheet date, resulting in a swaption premium. Options are typically valued by applying the Black-Scholes model.
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to net present value
The fair value of foreign exchange option contracts is determined using observable forward exchange rates, volatility, yield curves and time-to-maturity parameters at the balance sheet date, resulting in an option premium. Options are typically valued by applying the Black-Scholes model.
The carrying value less impairment provision of receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial derivatives.
The fair values, except for bond debt, are based on cash flows discounted using a
rate based on market rates including margins and are within level 2 of the fair value hierarchy. The fair values of the bond debt are based on quoted prices and are also classified within level 2 of the fair value hierarchy due to limited trading in an active market.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.
The quoted market price used for financial assets held by the group is the current mid price. These instruments are included in level 1. Instruments included in level 1 at the end of June 2018 are liquid investment grade bonds (analogous for 2017).
The fair value of financial instruments that are not traded in an active market (over-the-counter contracts) are based on third party quotes (Mark-to-Market). These quotes use the maximum number of observable market rates for price discovery. The different techniques typically applied by financial counterparties (banks) were described above. These instruments - FX and IR derivatives - are included in level 2.
If one or more of the significant inputs is not based on observable market data, the derivatives is in level 3. Primarily illiquid investment funds and structured notes are included in level 3.
| USD mill | Maritime Services |
Supply Services |
Holding & Investments |
Eliminations /discontinued operations |
WWH group total |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Q2 2018 |
Q2 2017 |
Q2 2018 |
Q2 2017 |
Q2 2018 |
Q2 2017 |
Q2 2018 |
Q2 2017 |
Q2 2018 |
Q2 2017 |
||
| Operating revenue | 147 | 144 | 71 | - | 3 | 5 | (2) | (3) | 219 | 146 | ||
| Gain on sale of assets | 1 | 3 | 2 | - | - | 195 | - | - | 3 | 198 | ||
| Total income | 148 | 147 | 73 | 0 | 3 | 200 | (2) | (3) | 222 | 344 | ||
| Operating expenses | ||||||||||||
| Cost of goods and change in inventory | (48) (42) | (15) - | (0) | (0) | - | - | (64) (42) | |||||
| Employee benefits | (55) (53) | (24) - | (4) | (4) | 0 | - | (82) (57) | |||||
| Other expenses | (54) (34) | (20) - | (3) | (4) | 2 | 3 | (76) (35) | |||||
| Operating profit before depreciation and | ||||||||||||
| amortisation | (9) 17 | 14 | 0 | (4) 193 | (0) - | 0 | 210 | |||||
| Depreciation and impairments | (4) | (4) | (5) - | (0) | (0) | - | - | (10) | (4) | |||
| Operating profit | (13) 13 | 9 | 0 | (4) 192 | (0) | 0 | (9) 206 | |||||
| Share of profit from associates | 1 | 1 | 4 | - | 6 | (5) | - | - | 11 | (4) | ||
| Changes in fair value financial assets | (5) - | - | - | (236) - | - | - | (241) - | |||||
| Other financial income/(expenses) | (19) | (4) - | (7) 22 | - | - | (30) 23 | ||||||
| Profit/(loss) before tax | (37) 15 | 9 | 0 | (241) 209 | (0) | 0 | (269) 225 | |||||
| Tax income/(expense) | 4 | (4) | (1) - | 0 | (3) | - | - | 3 | (7) | |||
| Profit/(loss) | (33) | 11 | 8 | 0 | (241) 206 | (0) | 0 | (266) 218 | ||||
| Result of discontinued operations | - | - | - | - | - | - | - | (264) | - | (264) | ||
| Non-controlling interests | 1 | 0 | 3 | - | (68) 53 | - | - | (65) 53 | ||||
| Profit/(loss) to the owners of parent | (34) 11 | 5 | 0 | (172) 153 | (0) (264) | (201) | (100) |
| Holding & | Eliminations /discontinued |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | Maritime Services | Supply Services | Investments | operations | WWH group total | ||||||||||
| YTD | YTD 2018 |
YTD 2017 |
Full year 2017 |
YTD 2018 |
YTD 2017 |
Full year 2017 |
YTD 2018 |
YTD 2017 |
Full year 2017 |
YTD 2018 |
YTD 2017 |
Full year 2017 |
YTD 2018 |
YTD 2017 |
Full year 2017 |
| Operating revenue | |||||||||||||||
| Gain on sale of assets | 297 2 |
284 4 |
574 6 |
130 2 |
- - |
57 0 |
6 - |
10 195 |
16 155 |
(3) - |
- | (8) (14) 429 - |
4 | 285 199 |
632 161 |
| Total income | 299 | 287 | 580 | 132 | 0 | 57 | 6 | 205 | 171 | (3) | (8) (14) 433 | 484 | 793 | ||
| Operating expenses | |||||||||||||||
| Cost of goods and change in inventory | (103) (86) | (182) (27) - | (10) | (1) | (0) | (1) | - | 0 | 0 | (131) (87) | (194) | ||||
| Employee benefits | (110) | (107) | (214) (47) - | (20) | (7) (10) (19) | 0 | 0 | 0 | (165) | (117) | (252) | ||||
| Other expenses | (81) (68) | (133) (38) - | (18) | (6) | (8) (13) | 3 | 8 | 14 | (122) (67) | (150) | |||||
| Operating profit before depreciation and amortisation |
3 | 26 | 51 | 20 | 0 | 9 | (8) 187 | 138 | (0) | (0) | (0) 16 | 214 | 198 | ||
| Depreciation and impairments | (8) | (7) (15) (11) - | (6) | (0) | (0) | (0) | - | - | (0) (20) | (8) (22) | |||||
| Operating profit | (5) | 19 | 36 | 9 | 0 | 2 | (8) 187 | 138 | (0) | (0) | (0) | (4) 206 | 176 | ||
| Share of profit from associates | 2 | 2 | 4 | 5 | - | 1 | 10 | (6) 49 | - | - | - | 17 | (4) 55 | ||
| Change in fair value financial assets | (2) - | - | - | - | - | (115) - | - | - | - | - | (117) - | - | |||
| Other finance income /(expenses) | (18) | 6 | 6 | (8) - | (1) | 7 | 25 | 16 | - | - | - | (18) 31 | 22 | ||
| Profit/(loss) before tax | (23) 27 | 46 | 7 | 0 | 3 | (106) 206 | 204 | (0) | 0 | (0) | (122) 233 | 253 | |||
| Tax income/(expense) | 1 | (7) (15) | (2) - | 1 | 0 | (4) | (2) - | - | - | (1) (10) (16) | |||||
| Profit/(loss) | (22) | 21 | 30 | 5 | 0 | 4 | (106) 202 | 202 | (0) | 0 | (0) | (123) 222 | 236 | ||
| Result of discontinued operations | - | - | - | - | - | - | - | - | - | - | (239) | (239) - | (239) | (239) | |
| Non-controlling interests | 1 | 1 | 1 | 2 | - | 1 | (26) | 52 | 52 | - | 7 | 7 | (24) | 60 | 62 |
| Profit/(loss) to the owners of parent | (23) 20 | 29 | 4 | 0 | 3 | (80) 149 | 150 | (0) (246) | (246) (99) (77) (64) | ||||||
| Wilh. Wilhelmsen Holding group Q2 2018 | unaudited | 19 of 24 |
| Holding & | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | Maritime Services | Supply Services | Investments | Eliminations | Total | |||||
| 30.06 | 30.06 | 30.06 | 30.06 | 30.06 | 30.06 | 30.06 | 30.06 | 30.06 | 30.06 | |
| Year to date | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 |
| Assets | ||||||||||
| Deferred tax asset | 19 | 17 | 3 | - | 5 | 0 | - | - | 26 | 17 |
| Intangible assets | 161 | 161 | 10 | - | 0 | 1 | - | - | 171 | 162 |
| Tangible assets | 183 | 178 | 388 | - | 2 | 2 | - | - | 574 | 181 |
| Investments in joint ventures and associates | 12 | 12 | 166 | - | 840 | 871 | - | - | 1 018 | 883 |
| Other non current assets | 93 | 112 | 7 | - | 593 | 781 | (21) | - | 672 | 893 |
| Current financial investments | 0 | 0 | - | - | 91 | 91 | - | - | 91 | 91 |
| Other current assets | 331 | 296 | 80 | - | 8 | 35 | (9) | (31) | 410 | 300 |
| Cash and cash equivalents | 112 | 146 | 9 | - | 54 | 88 | - | - | 175 | 235 |
| Total assets | 911 | 922 | 662 | 0 | 1 592 | 1 868 | (29) | (31) 3 136 | 2 760 | |
| Equity and liabilities | ||||||||||
| Equity majority | 300 | 312 | 156 | - | 1 389 | 1 643 | - | - | 1 845 | 1 955 |
| Equity non controlling interest | - | (2) | 54 | - | 129 | 175 | - | - | 182 | 173 |
| Deferred tax | 9 | 14 | - | - | (0) | 0 | - | - | 9 | 14 |
| Interest-bearing debt | 201 | 200 | 353 | - | 55 | 35 | (18) | - | 591 | 234 |
| Other non current liabilities | 111 | 115 | 18 | - | 10 | 8 | (2) | - | 137 | 123 |
| Other current liabilities | 289 | 283 | 81 | - | 10 | 8 | (9) | (31) | 372 | 260 |
| Total equity and liabilities | 911 | 922 | 662 | 0 | 1 592 | 1 868 | (29) | (31) 3 136 | 2 760 |
| USD mill | Maritime Services | Supply Services | Holding & Investments | ||||
|---|---|---|---|---|---|---|---|
| Quarter | Q2 2018 | Q2 2017 | Q2 2018 | Q2 2017 | Q2 2018 | Q2 2017 | |
| Profit before tax | (37) | 15 | 9 | (241) | (156) | ||
| Change in fair value financial assets | 5 | 236 | |||||
| Share of profit from joint ventures and associates | (1) | (1) | (4) | (6) | 5 | ||
| Other financial (income)/expenses | 19 | (1) | 4 | 6 | (22) | ||
| Depreciation/impairment | 4 | 4 | 5 | 0 | 0 | ||
| Change in working capital | (9) | (9) | (12) | 0 | 2 | ||
| Net (gain)/loss from sale of subsidiaries and fixed assets | (1) | (1) | (2) | - | 171 | ||
| Net cash provided by operating activities | (20) | 7 | 0 | - | (4) | 0 | |
| Dividend received from joint ventures and associates | 2 | 2 | 14 | - | 12 | ||
| Net sale/(investments) in fixed assets | (2) | (6) | (1) | - | - | ||
| Net sale/(investments) in entities and segments | 17 | (21) | 7 | (3) | 14 | ||
| Current financial investments | 2 | 0 | 0 | 39 | 12 | ||
| Net changes in other investments | 0 | - | - | ||||
| Net cash flow from investing activities | 19 | (24) | 20 | - | 36 | 37 | |
| Net change of debt | 5 | 30 | (11) | (6) | |||
| Net change in other financial items | (4) | (2) | (4) | (1) | (0) | ||
| Net dividend from other segments/ to shareholders | (32) | (31) | (6) | 12 | 9 | ||
| Net cash flow from financing activities | (30) | (3) | (21) | - | 4 | 9 | |
| Net increase in cash and cash equivalents | (31) | (19) | (0) | - | 36 | 46 | |
| Cash and cash equivalents at the beg.of the period | 143 | 166 | 10 | 18 | 42 | ||
| Cash and cash equivalents at the end of period | 112 | 146 | 9 | - | 54 | 88 |
With effect from 26 September 2017, the group increased its shareholding in NorSea Group from 40% to approximately 72%. Eidesvik Eiendomsinvest AS and Simon Møkster Eiendom AS will hold approximately 12% each, while management in NorSea Group controls the remaining 4%. Following the transaction, Wilhelmsen acquired a small portion of management controlled shares, 2.11 %. During Q1 and Q2 2018, the group acquiree additional portion of shares from management. The total ownership is 75.15 % at end of June 2018.
Reportet net profit from NorSea Group as an associate up to consolidation 26 September 2017 are:
| Net profit from NorSea Group as an associate a part of segment Holding & Investments | 2017 | Q1 | Q2 | Q3 | YTD |
|---|---|---|---|---|---|
| USD mill | 2 | 1 | 1 | 5 | |
| Loss upon consolidation of the former NorSea Group | (40) | (40) |
WWH delivers services to the Wallenius Wilhelmsen group. These include primarily human resources, tax and treasury up to 30.06.2017, and in-house services such as canteen, post, switchboard, accounting and rent of office facilities.
Generally, Shared Services are priced using a cost plus 5% margin calculation, in accordance with the principles set out in the OECD Transfer Pricing Guidelines and are delivered according to agreements that are renewed annually.
The size and global activities of the group dictate that companies in the group will be involved from time to time in disputes and legal actions.
The group is not aware of any financial risk associated with disputes and legal actions which are not largely covered through insurance arrangements.
On 21 July, the group agreed to abandon the acquisition of the technical solutions business from Drew Marine following US District Court ruling.
In addition Maritime Services have several transactions with associates. The contracts governing such transactions are based on commercial market terms.
Nevertheless, any such disputes/actions which might exist are of such a nature that they will not significantly affect the group's financial position.
No other material events occured between the balance sheet date and the date when the accounts were presented providing new information about the conditions prevailing on the balance sheet date.
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2018 have been prepared in accordance with IAS 34 – Interim Financial Reporting, and gives a true and fair view of the group's assets, liabilities, financial position and profit as a whole.
We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.
Lysaker, 9 August 2018 The board of directors of Wilh. Wilhelmsen Holding ASA
Chair sign sign sign
Diderik Schnitler Carl Erik Steen Irene Waage Basili
sign Sign. S sign
Trond Ødegård Westlie Cathrine Løvenskiold Wilhelmsen
Thomas Wilhelmsen Group CEO sign
Wilh. Wilhelmsen Holding ASA PO Box 33 NO-1324 Lysaker, NORWAY Tel: +47 67 58 40 00 http://www.wilhelmsen.com/
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