Quarterly Report • May 8, 2018
Quarterly Report
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WILH. WILHELMSEN HOLDING ASA
| USD mill | Q-on-Q | Y-o-Y | |||
|---|---|---|---|---|---|
| - unless otherwise indicated |
Q1'18 | Q4'17 | Change | Q1'17 | Change |
| Total income | 211 | 205 | 3 % | 140 | 51 % |
| - of which operating revenue |
210 | 204 | 3 % | 139 | 51 % |
| - of which gain/(loss) on sale of assets |
1 | 1 | -3 % | 1 | 32 % |
| EBITDA | 15 | 14 | 12 % | 4 | 306 % |
| Operating profit/EBIT | 5 | 4 | 46 % | 0 | >500% |
| Share of profits from associates | 6 | 37 | -83 % | 0 | >500% |
| Change in fair value financial assets | 124 | ||||
| Other financial income/(expenses) | 11 | 1 | >500% | 8 | 43 % |
| Tax income/(expenses) | -5 | -4 | neg. | -4 | neg. |
| Profit/(loss) from continued operations | 142 | 37 | 280 % | 5 | >500% |
| Discontinued operations | 26 | ||||
| Profit/(loss) for the period | 142 | 37 | 280 % | 30 | 368 % |
| Profit/(loss) to owners of the parent | 101 | 36 | 180 % | 24 | 329 % |
| EPS (USD) | 2,18 | 0,78 | 180 % | 0,51 | 329 % |
| Other comprehensive income | 31 | -22 | neg. | 21 | 47 % |
| Total comprehensive income | 174 | 16 | >500% | 52 | 236 % |
| Total comprehensive income owners of parent | 130 | 16 | >500% | 45 | 191 % |
| Total assets | 3 478 | 3 288 | 6 % | 4 660 | -25 % |
| Equity parent | 2 105 | 1 975 | 7 % | 2 035 | 3 % |
| Total equity | 2 361 | 2 188 | 8 % | 2 543 | -7 % |
| Equity ratio | 68 % | 67 % | 1 % | 55 % | 13 % |
Total income for the Wilh. Wilhelmsen Holding ASA group (referred to as Wilhelmsen or group) was USD 211 million in the first quarter of 2018. This was a 3% increase from the previous quarter, supported by stable or higher operating revenue within all three reporting segments.
EBITDA was USD 15 million for the quarter, up 12%. The increase was mainly due to reduced corporate cost within the maritime services segment.
Share of profit from associates was USD 6 million, reflecting reduced net result in Wallenius Wilhelmsen.
Change in fair value of financial assets was positive with USD 124 million for the quarter, supported by increased value of Treasure ASA's investment in Hyundai Glovis.
Other financial income was USD 11 million for the quarter, lifted by dividend income from financial assets.
Other comprehensive income for the quarter was USD 31 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 USD 130 million in the first quarter.
Total assets were up 6% in the first quarter, mainly due to increased value of financial assets. A weaker USD had a positive effect on value of both financial and other assets, when converting value of non-USD assets into USD.
A profit for the period and positive comprehensive income lifted equity attributable to owners of the parent with 7% in the first quarter. As of 31 March 2018, the Wilhelmsen equity ratio was 68%.
| Interest | ||
|---|---|---|
| bearing | ||
| USD mill | Cash | debt |
| Maritime services | 143 | 196 |
| Supply services | 10 | 380 |
| Holding and investments | 18 | 64 |
| Elimination | 0 | -19 |
| Wilhelmsen group | 171 | 621 |
Cash and cash equivalents was USD 171 million by the end of the first quarter, up USD 4 million from the previous quarter.
Interest bearing debt was USD 621 million by the end of the quarter. The USD 21 million increase for the quarter was due to currency effect on non-USD debt and increased drawdown on holding facilities.
Segment information
| USD mill | Q-on-Q | Y-o-Y | |||
|---|---|---|---|---|---|
| - unless otherwise indicated | Q1'18 | Q4'17 | Change | Q1'17 | Change |
| Total income | 151 | 150 | 0 % | 140 | 7 % |
| - Ships service | 140 | 139 | 1 % | 129 | 9 % |
| - Ship management | 10 | 11 | -6 % | 11 | -8 % |
| - Other/eliminations | 0 | 0 | 0 | ||
| EBITDA | 13 | 10 | 29 % | 9 | 42 % |
| - EBITDA margin (%) | 8,6 % | 6,6 % | 1,9 % | 6,5 % | 2,1 % |
| Operating profit/EBIT | 9 | 6 | 41 % | 5 | 62 % |
| - EBIT margin (%) | 5,9 % | 4,2 % | 1,7 % | 3,9 % | 2,0 % |
| Share of profits from associates | 1 | 1 | 6 % | 1 | -10 % |
| Change in fair value financial assets | 3 | ||||
| Other financial income/(expenses) | 1 | 1 | 6 | ||
| Tax income/(expense) | -3 | -6 | -3 | ||
| Profit/(loss) | 11 | 2 | >200% | 9 | 19 % |
| - Profit margin (%) | 7,3 % | 1,1 % | 6,2 % | 6,5 % | 0,7 % |
| - Non controlling interest | 0 | 0 | 0 | ||
| Profit/(loss) to owners of the parent | 11 | 1 | >200% | 9 | 21 % |
Total income from maritime services was USD 151 million in the first quarter, broadly in line with the previous quarter.
EBITDA was USD 13 million for the quarter, up 29%. The improvement was due to reduced corporate cost, while contribution from operating companies was down.
Share of profit from associates was stable. A revaluation gain on investment in Survitec contributed positively, while other financial income was stable.
Net profit after minority interests ended at USD 11 million for the quarter.
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 up 1% from the previous quarter. Marine product sales increased, while income from ships agency and non-marine chemicals was down. Operating profit was down following increased cost prices in marine products and an overall unfavourable product mix development.
On 27 April 2017, Wilhelmsen signed an agreement to acquire the technical solutions business from Drew Marine, subject regulatory approval. The United States' Federal Trade Commission (FTC) announced on 23 February 2018 that they will file a complaint opposing the Wilhelmsen group's planned acquisition. This is standard
procedure in cases where the FTC considers that a proposed transaction will substantially lessen competition. Wilhelmsen disagrees with the FTC's evaluation and will continue to work towards a positive outcome. A ruling is expected later this year. The approval process in Singapore is also still ongoing.
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 and operating profit was down for the quarter. This followed a reduction in fleet under management and reduced crewing activity.
During the quarter, ship management started relocating its global head office from Kuala Lumpur, Malaysia, to Singapore.
In February, ship management and NSG Wind secured a 5 year frame agreement within the wind offshore sector.
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 3 million gain from change in fair value of the Survitec investment, mainly currency related.
Corporate cost was limited for the quarter, with M&A expenses related to ongoing projects mainly covered through previous year provisions.
| USD mill | Q-on-Q | Y-o-Y | |||
|---|---|---|---|---|---|
| - unless otherwise indicated |
Q1'18 | Q4'17 | Change | Q1'17 | Change |
| Total income | 59 | 57 | 5 % | ||
| - NorSea Group |
56 | 52 | 9 % | ||
| - Other/eliminations |
3 | 5 | |||
| EBITDA | 6 | 9 | -27 % | ||
| - EBITDA margin (%) |
10,5 % | 15,1 % | |||
| Operating profit/EBIT | 1 | 2 | -78 % | ||
| - EBIT margin (%) |
0,9 % | 4,1 % | |||
| Share of profit from associates | 1 | 1 | |||
| Other financial income/(expense) | -4 | -1 | |||
| Tax income/(expense) | -1 | 1 | |||
| Profit/(loss) | -3 | 4 | neg. | ||
| - Profit margin (%) |
-4,7 % | 7,0 % | |||
| - Non controlling interest |
-1 | 1 | |||
| Profit/(loss) to owners of the parent | -2 | 3 | neg. |
Total income from supply services was USD 59 million in the first quarter, up 5% from the previous quarter. The increase followed higher income in NorSea Group.
EBITDA came in at USD 6 million, while share of profit from associates was USD 1 million for the quarter.
Other financial items and tax was included with a total expense of USD 5 million.
Net profit after minority interests was a loss of USD 2 million for the quarter.
NorSea Group provides supply bases and integrated logistics solution to the offshore industry. Wilhelmsen owns ~74,6% 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 third quarter 2017.
Total income for NorSea Group was USD 56 million in the first quarter, up 5% from the previous quarter. The increase was mainly due to increased vessel chartering activities, offered mainly on a pass-through basis. Income from supply base services remained at a low level, reflecting a traditionally weak winter season for part of the Norwegian offshore industry. Income from infrastructure and facilities was stable.
Underlying operating profit improved from the previous quarter, which included a gain related to pension liabilities.
During the quarter, NorSea Group signed three new contracts within the offshore wind business segment, including a joint frame agreement with Wilhelmsen Ship Management.
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. Reduction from previously quarter was due to changes in segment reporting impacting 2017 reporting.
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 | |||
|---|---|---|---|---|---|
| - unless otherwise indicated | Q1'18 | Q4'17 | Change | Q1'17 | Change |
| Total income | 3 | 1 | >200% | 5 | -47 % |
| - Operating revenue | 3 | 0 | >200% | 5 | -47 % |
| - Gain on sale of assets | 0 | 0 | 0 | ||
| EBITDA | -4 | -5 | -5 | ||
| Operating profit/EBIT | -4 | -5 | -5 | ||
| Share of profit from associates | 4 | 34 | -89 % | -1 | neg. |
| - Wallenius Wilhelmsen ASA | 4 | 34 | -89 % | ||
| - Other/eliminations | 0 | 0 | -1 | ||
| Change in fair value financial assets | 121 | ||||
| - Treasure ASA (Hyundai Glovis) | 144 | ||||
| - Other financial assets | -23 | ||||
| Other financial income/(expenses) | 14 | 1 | >200% | 2 | >200% |
| - Investment management (Holding) | -1 | 0 | 1 | ||
| - Treasure ASA | 12 | 0 | 0 | ||
| - WWHI | 1 | 1 | 1 | ||
| - Other financial income/(expense) | 1 | 0 | 0 | ||
| Tax income/(expense) | 0 | 1 | -1 | ||
| Profit/(loss) for the period | 134 | 32 | -5 | ||
| - Non controlling interest | 42 | 0 | -1 | ||
| Profit/(loss) to owners of the parent | 92 | 32 | -4 |
The holding and investments segment reported a net profit of USD 92 million in the first quarter, lifted by a strong appreciation of the value of Treasure ASA's investment in Hyundai Glovis. A lower net result in Wallenius Wilhelmsen ASA and reduced value of other investments had a negative impact.
Market value of financial assets was marginally up for the quarter. Increased value of shareholding in Treasure ASA was offset by reduced value of other investments, including Wallenius Wilhelmsen ASA.
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 968 million in the first quarter, down 6% from the previous quarter. This followed a 12% reduction in ocean volumes partly offset by increased fuel compensation and improved revenues from landbased activites.
Reported EBITDA was USD 125 million for the quarter, down 29% from the previous quarter. The decline was mainly driven by the ocean segment which was negatively impacted by contracted reductions in Hyundai Motor Group volumes, rate reductions, increased bunker prices and unfavourable currency movements. The negative effects were only partly offset by underlying positive volume and cargo mix development and realization of synergies. At the end of the first quarter about USD 85 million of the USD 120 million synergy target was confirmed.
Wilhelmsen's share of profit in Wallenius Wilhelmsen ASA was USD 4 million in the first quarter.
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.
On 28 March, the Hyundai Motor Group issued a press release describing a restructuring plan to eliminate circular ownership within the group. As part of this transaction, Hyundai Glovis will purchase operating assets from Hyundai Mobis through issuance of new shares. The restructuring is among other subject approval from shareholders of the involved companies. If the transaction obtains all necessary approvals in Korea (including the general meeting scheduled for 29 May), Treasure ASA's shareholding will be reduced from currently 12.04% to 4,64% once the planned transaction is completed in July 2018.
The result for the first quarter included a net USD 11 million dividend from Hyunday Glovis.
The value of Treasure ASA's investment in Hyundai Glovis was up USD 144 million for the quarter, to USD 719 million. The ~72.7% investment value attributable to owners of Wilhelmsen was USD 523 million, up USD 104 million for the quarter.
Financial investments include cash and cash equivalents, current financial investments and other financial assets held by the parent and fully owned subsidiaries.
The market value of other financial assets was USD 120 million by the end of the first quarter, down USD 22 million. Main reason was a lower share price in Qube Holdings Limited. A USD 1 million dividend income was booked in the first quarter.
The current financial investment portfolio held by Wilhelmsen was USD 99 million by the end of the first quarter, a reduction of USD 2 million. The portfolio primarily included listed equities and investment-grade bonds. Net income from investment management was nil in the first quarter.
Other holding and investments activities Holding/other activities includes general holding activities.
Underlying income and EBITDA was at normal levels for the quarter. Changes from last year was mainly due to a change in segment reporting, with WilNor Governmental Services now reported as part of the new supply services segment.
Focus on improving the operating margin, strengthening profitability and growing the business will remain. Development of marine products will be sensitive to final outcome of the Drew acquisition, subject regulatory approval. An outcome of the process is expected in the third quarter.
A restructuring process has been initiated within NorSea Group to adapt the organisation to the present market environment. This is expected to have a positive effect on the supply services segment margin when fully implemented.
Wallenius Wilhelmsen maintains a balanced view on prospects.
The future development of Treasure ASA's investment in Hyundai Glovis will depend on outcome of the announced Hyundai Motor Group restructuring plan.
Focus on operational excellence, improved cash flow and financial robustness will continue
Markets remain challenging, but the underlying sentiments for the group's businesses are positive.
Lysaker, 8 May 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. WWH cannot give assurances that expectations regarding the future outlook will be achieved or accomplished.
| USD mill | Note | Q1 | Q1 | Full year |
|---|---|---|---|---|
| 2018 | 2017 | 2017 | ||
| Operating revenue | 210 | 139 | 632 | |
| Other income | ||||
| Gain/(loss) on sale of assets | 2 | 1 | 1 | 161 |
| Total income | 211 | 140 | 793 | |
| Operating expenses | ||||
| Cost of goods and change in inventory | (67) | (44) | (194) | |
| Employee benefits | (82) | (60) | (252) | |
| Other expenses | (46) | (32) | (150) | |
| Operating profit before depreciation and amortisation | 15 | 4 | 198 | |
| Depreciation and impairments | 3 | (10) | (4) | (22) |
| Operating profit | 5 | 0 | 176 | |
| Share of profits from joint ventures and associates | 4 | 6 | 0 | 55 |
| Change in fair value financial assets | 8 | 124 | ||
| Other financial income | 17 | 3 | 36 | |
| Other financial expenses | (6) | 5 | (14) | |
| Profit before tax | 147 | 8 | 253 | |
| Tax income/(expense) | (5) | (4) | (16) | |
| Profit from continued operations | 142 | 5 | 236 | |
| Discontinued operations | ||||
| Net profit/(loss) from discontinued operations (net after tax) | 6 | - | 26 | (239) |
| Profit for the period | 142 | 30 | (2) | |
| Attributable to: non-controlling interests continued operations | 41 | (0) | 55 | |
| non-controlling interests discontinued operations | - | 7 | 7 | |
| owners of the parent | 101 | 24 | (64) | |
| Basic earnings per share (USD) | 7 | 2,18 | 0,51 | (1,38) |
| Comprehensive income - financial report | ||||
| Q1 | Q1 | Full year | ||
| USD mill | 2018 | 2017 | 2017 | |
| Profit for the period | 142 | 30 | (2) | |
| Items that may be reclassified to income statement | ||||
| Cash flow hedges (net after tax) | 2 | |||
| Revaluation mark to market value available for sale financial assets | 6 | 3 | ||
| Comprehensive income from associates | - | (1) | ||
| Currency translation differences | 29 | 14 | 47 | |
| Currency translation differences recycled to income statement as part of loss of sale of assets | - | 28 | ||
| Comprehensive income discontinued operations | 1 | (1) | ||
| Items that will not be reclassified to income statement | - | - | ||
| Remeasurement pension liabilities, net of tax | - | 0 | ||
| Other comprehensive income, net of tax | 31 | 21 | 77 | |
| Total comprehensive income for the period | 174 | 52 | 75 | |
| Total comprehensive income attributable to: | ||||
| Owners of the parent continued operations | 130 | 20 | 251 | |
| Owners of the parent discontinued operations | 25 | (239) | ||
| Non-controlling interests | 44 | 7 | 64 | |
| Total comprehensive income for the period | 174 | 52 | 75 |
The above consolidated income statement should be read in conjunction with the accompanying notes.
| USD mill | Note | 31.03.2018 | 31.03.2017 | 31.12.2017 |
|---|---|---|---|---|
| Deferred tax asset | 5 | 11 | 77 | 18 |
| Goodwill and other intangible assets | 3 | 178 | 144 | 171 |
| Vessels, property and other tangible assets | 3 | 610 | 1 995 | 590 |
| Investments in joint ventures and associates | 4 | 1 033 | 1 254 | 1 019 |
| Financial assets to fair value | 8 | 924 | 228 | 801 |
| Other non current assets | 40 | 47 | 37 | |
| Total non current assets | 2 796 | 3 744 | 2 637 | |
| Inventory | 78 | 67 | 81 | |
| Current financial investments | 99 | 237 | 101 | |
| Other current assets | 333 | 283 | 302 | |
| Cash and cash equivalents | 171 | 328 | 167 | |
| Total current assets | 682 | 915 | 651 | |
| Total assets | 3 478 | 4 660 | 3 288 | |
| Paid-in capital | 7 | 122 | 122 | 122 |
| Retained earnings | 7/9 | 1 983 | 1 913 | 1 853 |
| Attributable to equity holders of the parent | 2 105 | 2 035 | 1 975 | |
| Non-controlling interests | 256 | 509 | 212 | |
| Total equity | 2 361 | 2 543 | 2 188 | |
| Pension liabilities | 24 | 63 | 23 | |
| Deferred tax | 5 | 5 | 14 | 6 |
| Non-current interest-bearing debt | 10 | 507 | 1 357 | 493 |
| Other non-current liabilities | 109 | 224 | 112 | |
| Total non current liabilities | 645 | 1 658 | 634 | |
| Current income tax | 7 | 15 | 11 | |
| Public duties payable | 9 | 5 | 7 | |
| Current interest-bearing debt | 10 | 114 | 112 | 108 |
| Other current liabilities | 342 | 327 | 341 | |
| Total current liabilities | 472 | 459 | 466 | |
| Total equity and liabilities | 3 478 | 4 660 | 3 288 |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
| USD mill | Q1 | Q1 | Full year | |
|---|---|---|---|---|
| Note | 2018 | 2017* | 2017* | |
| Cash flow from operating activities | ||||
| Profit before tax | 147 | 33 | 14 | |
| Change in fair value financial assets | 8 | (124) | ||
| Other financial (income)/expenses | (11) | 2 | (6) | |
| Financial derivatives unrealised | (2) | (8) | ||
| Depreciation/impairment | 3 | 10 | 24 | 42 |
| Loss/ (gain) on sale of fixed assets | 3 | 1 | (9) | (11) |
| (Gain)/loss from sale of subsidiaries, joint ventures and associates | 6 | - | 121 | |
| Change in net pension asset/liability | (1) | (1) | (5) | |
| Change in inventory | 4 | (1) | (18) | |
| Change in other working capital | (1) | (12) | 22 | |
| Tax paid (company income tax, withholding tax) | (3) | (3) | (11) | |
| Net cash provided by operating activities | 21 | 32 | 139 | |
| Cash flow from investing activities | ||||
| Share of profit from joint ventures and associates | (6) | (14) | (69) | |
| Dividend received from joint ventures and associates | 2 | 1 | 18 | |
| Proceeds from sale of fixed assets | 3 | 54 | 63 | |
| Investments in fixed assets | 3 | (9) | (4) | (29) |
| Net proceeds from sale of subsidiaries | 14 | |||
| Cash discontinued operations | 6 | (121) | ||
| Investments in subsidaries, joint ventures and associates | (1) | (89) | ||
| Proceeds from sale of financial investments | 8 | 85 | 111 | |
| Current financial investments | (7) | (39) | (58) | |
| Interest received | 0 | 1 | 5 | |
| Net cash flow from investing activities | (12) | 83 | (156) | |
| Cash flow from financing activities | ||||
| Proceeds from issue of debt | 10 | 230 | ||
| Repayment of debt | (9) | (64) | (271) | |
| Interest paid including interest derivatives | (7) | (24) | (37) | |
| Cash from financial derivatives | 4 | - | ||
| Dividend to shareholders/purchase of own shares Net cash flow from financing activities |
(0) (6) |
(84) | (36) (114) |
|
| Net increase in cash and cash equivalents 1 | 3 | 32 | (130) | |
| Cash and cash equivalents at the beg. of the period 1 | 167 | 296 | 296 | |
| Cash and cash equivalents at the end of the period 1 | 171 | 328 | 167 | |
| * 2017 including discontinued operations | ||||
| The net cash flow from discontnued operations are: | 6 | |||
| Net cash provided by operating activities from discontinued operations | 7 | 7 | ||
| Net cash provided by investing activities from discontinued operations | 107 | 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.
| USD mill | Share capital | Retained earnings |
Total | Non controlling interests |
Total equity |
|---|---|---|---|---|---|
| Balance at 31.12.2017 | 122 | 1 853 | 1 975 | 212 | 2 188 |
| Profit for the period | 101 | 101 | 41 | 142 | |
| Other comprehensive income | 28 | 28 | 3 | 31 | |
| Paid dividends to shareholders | - | (0) | (0) | ||
| Balance 31.03.2018 | 122 | 1 983 | 2 105 | 256 | 2 361 |
| Balance at 31.12.2016 | 122 | 1 868 | 1 990 | 502 | 2 492 |
| Profit for the period | 24 | 24 | 7 | 30 | |
| Other comprehensive income | 21 | 21 | 0 | 21 | |
| Balance 31.03.2017 | 122 | 1 912 | 2 035 | 509 | 2 543 |
| 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 | 75 | 75 | 2 | 77 | |
| Incoming non-controlling interests | 53 | 53 | |||
| Change in non-controlling interests | 4 | 4 | |||
| Outgoing non-controlling interests | (398) | (398) | |||
| Paid dividends to shareholders | (25) | (25) | (11) | (37) | |
| 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
First quarter 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 8.
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 (equitymethod). 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.
| Vessels / | Total tangible | |||
|---|---|---|---|---|
| USD mill | Newbuilding contracts |
Other tangible assets |
Intangible assets |
and intangible assets |
| 2018 | ||||
| Cost price 1.1 | 36 | 844 | 243 | 1 123 |
| Acquisition | - | 7 | 2 | 9 |
| Reclass/disposal | - | (34) | (1) | (35) |
| Currency translation differences | 2 | 32 | 10 | 44 |
| Cost price 31.03 | 38 | 849 | 253 | 1 140 |
| Accumulated depreciation and impairment losses 1.1 | (17) | (273) | (71) | (362) |
| Depreciation/amortisation | (0) | (8) | (2) | (10) |
| Reclass/disposal | - | 32 | 1 | 33 |
| Currency translation differences | (1) | (10) | (3) | (14) |
| Accumulated depreciation and impairment losses 31.03 | (18) | (259) | (75) | (352) |
| Carrying amounts 31.03 | 20 | 590 | 178 | 788 |
| 2017 | ||||
| Cost price 1.1 | 2 457 | 278 | 208 | 2 944 |
| Acquisition | 0 | 3 | 0 | 4 |
| Reclass/disposal | (54) | (2) | - | (55) |
| Currency translation differences | - | 6 | 1 | 7 |
| Cost price 31.03 | 2 404 | 286 | 209 | 2 899 |
| Accumulated depreciation and impairment losses 1.1 | (579) | (110) | (63) | (752) |
| Depreciation/amortisation | (3) | (1) | (4) | |
| Depreciation discontinued operations | (20) | (20) | ||
| Reclass/disposal | 17 | 1 | - | 18 |
| Currency translation differences | (1) | (1) | ||
| Accumulated depreciation and impairment losses 31.03 | (582) | (113) | (65) | (760) |
| Carrying amounts 31.03 | 1 821 | 173 | 144 | 2 139 |
| 2017 Full year | ||||
| Cost price 1.1 | 2 457 | 278 | 208 | 2 944 |
| Acquisition | 0 | 26 | 3 | 29 |
| Business combination | 38 | 536 | 30 | 604 |
| Reclass/disposal Currency translation differences |
(2 458) (1) |
3 1 |
(8) 10 |
(2 462) 9 |
| Cost price 31.12 | 36 | 844 | 243 | 1 123 |
| Accumulated depreciation and impairment losses 1.1 | (579) | (110) | (63) | (752) |
| Depreciation/amortisation | (0) | (15) | (6) | (22) |
| Depreciation discontinued operations | (20) | (0) | (20) | |
| Business combination | (17) | (138) | (1) | (156) |
| Reclass/disposal | 599 | (9) | 1 | 592 |
| Currency translation differences | 1 | (2) | (2) | (4) |
| Accumulated depreciation and impairment losses 31.12 | (17) | (273) | (71) | (362) |
| Carrying amounts 31.12 | 19 | 571 | 171 | 761 |
USD mill
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.
Material joint ventures and associates at the end March 2018 are:
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 Q1 2018 the ownership has increased to 74.57% through acquisition of shares from NorSea Group's management.
| 31.03.2018 | ||
|---|---|---|
| Holding and Investments segment: | Ownership | Booked value |
| Wallenius Wilhelmsen ASA | 37.8% | 836 |
| Maritime service segment: | ||
| Associates | 20 - 50% | 13 |
| Supply services segment: | ||
| Joint venture | ||
| Cost Center Base | 50 % | 107 |
| Vikan Næringspark Invest AS | 50 % | 16 |
| Other | 50 % | 0 |
| Associates | ||
| Risavika Havn AS | 42.8% | 40 |
| Risavika Eiendom AS | 42 % | 12 |
| Hammerfest Næringsinvest AS | 32 % | 2 |
| Other | 33 - 49% | 7 |
| Total investment in joint ventures and associates | 1 033 |
| Share of profit from joint ventures and associates | Q1 2018 |
|---|---|
| Wallenius Wilhelmsen ASA | 4 |
| Joint ventures and associates in Supply Services | 1 |
| Associates in Maritime Services | 1 |
| Share of profit from joint ventures and associates | 6 |
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 subsidary 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.
The financial performance and cash flow information presented are for the Q1 2017.
| USD mill | Q1 2017 |
|---|---|
| Operating revenue | 59 |
| Other income | |
| Share of profits from joint ventures and associates | 14 |
| Gain/(loss) on sale of assets | 9 |
| Total income | 82 |
| Operating expenses | |
| Vessel expenses | (15) |
| Inventory cost | |
| Employee benefits | (11) |
| Other expenses | (3) |
| Depreciation and impairments | (20) |
| Total operating expenses | (49) |
| Operating profit | 33 |
| Financial income/(expenses) | (8) |
| Profit before tax | 25 |
| Tax income/(expense) | 1 |
| Profit from discontinued operations | 26 |
| Non controlling interests | 7 |
| Changes in fair value cash flow hedge | (0) |
| Exchange differences on translation of discontinued operations | 2 |
| Remeasurement pension liabilities, net of tax | |
| Other comprehensive income from discontinued operations | 1 |
| Cash flow from discontinued operations | |
| Net cash flow from operating activities | 7 |
| Net cash flow from investing activities | 107 |
| Net cash flow from financing activities | (74) |
| Net increase in cash generated by the discontinued operations | 40 |
| 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) |
Details of the merger between Wilh. Wilhelmsen ASA and Wall Roll AB
| The carry amounts of assets and liabilities as at the date of the merger 04. April 2017 were: | 04.04.2017 |
|---|---|
| Deferred tax asset | 56 |
| Intangible assets | 6 |
| Tangible assets | 1 822 |
| Investments in joint ventures and associates | 775 |
| Other non current assets | 1 |
| Current financial investments | 150 |
| Other current assets | 16 |
| Cash and cash equivalents | 121 |
| Total Assets | 2 946 |
| Deferred tax | 0 |
| Interest-bearing debt | 1 267 |
| Other non current liabilities | 164 |
| Other current liabilities | 55 |
| Non controlling interests | 398 |
| Liabilities and non-controlling interests | 1 884 |
| Net assets for controlling shareholders | 1 062 |
The share capital is as follow with a nominal value of NOK 20:
| A - shares | 34 637 092 |
|---|---|
| B - shares | 11 866 732 |
| Total shares | 46 503 824 |
quarter in 2017.
Earnings per share taking into consideration the number of outstanding shares in the period. The group acquired 100.000 own A shares during August 2011.
Basic earnings per share is calculated by dividing profit for the period after minority interests, by average number of total outstanding shares.
| 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 |
| Mark to market valuation | (0) |
| 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 at 1. January 2018 | 801 | |||
| Change in fair value through income statement | 124 | |||
| Fair value at 31. March 2018 | 924 |
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 is NOK 3.50 per share, was approved by the annual general meeting on 26 April 2018, and will be paid to the shareholders in May 2018. The dividends have effect on retained earnings in the second quarter of 2018.
Earnings per share is calculated based on 46 403 824 shares for 2018, and each
| USD mill | 31.03.2018 | 31.03.2017 | 31.12.2017 |
|---|---|---|---|
| Non current interest-bearing debt | 507 | 203 | 493 |
| Current interest-bearing debt | 114 | 108 | |
| Interest-bearing debt discontinued operations | 1 267 | ||
| Total interest-bearing debt | 621 | 1 469 | 601 |
| Cash and cash equivalents | 171 | 206 | 167 |
| Current financial investments | 99 | 87 | 101 |
| Cash and cash equivalents and current financial investments discontinued operations | 272 | ||
| Net interest-bearing debt | 351 | 905 | 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 31 March 2018 (analogous for 31 March 2017).
| Specification of interest-bearing debt | |||
|---|---|---|---|
| USD mill | 31.03.2018 | 31.03.2017 | 31.12.2017 |
| Interest-bearing debt | |||
| Bankloan | 621 | 203 | 601 |
| Interest-bearing debt discontinued operations | 1 267 | ||
| Total interest-bearing debt | 621 | 1 469 | 601 |
| Repayment schedule for interest-bearing debt | |||
| Due in 1 year | 114 | 0 | 108 |
| Due in 2 year | 25 | 33 | 25 |
| Due in 3 year | 28 | 170 | 22 |
| Due in 4 year | 21 | 0 | 22 |
| Due in 5 year and later | 433 | 0 | 425 |
| Interest-bearing debt discontinued operations | 1 267 | ||
| Total interest-bearing debt | 621 | 1 469 | 601 |
| USD mill | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| 2018 | ||||
| Financial assets at fair value | ||||
| Equities | 51 | 1 | 52 | |
| Bonds | 47 | 47 | ||
| Financial derivatives | 0 | 13 | 13 | |
| Financial assets at fair value | 828 | 97 | 924 | |
| Total financial assets 31.03 | 925 | 13 | 98 | 1 036 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 9 | 9 | ||
| Total financial liabilities 31.03 | 0 | 9 | 0 | 9 |
| 2017 | ||||
| Financial assets at fair value | ||||
| Equities | 43 | 43 | ||
| Bonds | 193 | 0 | 193 | |
| Financial derivatives | 1 | 1 | ||
| Financial assets at fair value | 137 | 91 | 228 | |
| Total financial assets 31.03 | 373 | 1 | 91 | 466 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 153 | 153 | ||
| Total financial liabilities 31.03 | 0 | 153 | 0 | 153 |
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 March 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 | Q1 2018 |
Q1 2017 |
Q1 2018 |
Q1 2017 |
Q1 2018 |
Q1 2017 |
Q1 2018 |
Q1 2017 |
Q1 2018 |
Q1 2017 |
|
| Operating revenue | 150 | 140 | 59 | 3 | 5 | (2) | (6) | 210 | 139 | ||
| Gain on sale of assets | 1 | 1 | 0 | - | - | - | 1 | 1 | |||
| Total income | 151 | 140 | 59 | - | 3 | 5 | (2) | (6) | 211 | 140 | |
| Operating expenses | |||||||||||
| Cost of goods and change in inventory | (55) | (44) | (12) | (0) (0) |
- | 0 | (67) | (44) | |||
| Employee benefits | (55) | (53) | (23) | (4) (6) |
0 | 0 | (82) | (60) | |||
| Other expenses | (27) | (34) | (18) | (3) (4) |
2 | 6 | (46) | (32) | |||
| Operating profit before depreciation | |||||||||||
| and amortisation | 13 | 9 | 6 | - | (4) (5) |
0 | (0) | 15 | 4 | ||
| Depreciation and impairments | (4) | (4) | (6) | (0) (0) |
- | (10) | (4) | ||||
| Operating profit | 9 | 5 | 1 | - | (4) (5) |
0 | (0) | 5 | 0 | ||
| Share of profits from associates | 1 | 1 | 1 | 4 | (1) | - | 6 | 0 | |||
| Changes in fair value financial assets | 3 | - | 121 | 124 | |||||||
| Other financial income/(expenses) | 1 | 6 | (4) | 14 | 2 | - | 11 | 8 | |||
| Profit/(loss) before tax | 14 | 12 | (2) | - | 134 | (4) | 0 | (0) | 147 | 8 | |
| Tax income/(expense) | (3) | (3) | (1) | (0) (1) |
- | (5) | (4) | ||||
| Profit/(loss) | 11 | 9 | (3) | - | 134 | (5) | 0 | (0) | 142 | 5 | |
| Result of discontinued operations | - | - | - | - | 26 | - | 26 | ||||
| Non-controlling interests | 0 | 0 | (1) | 0 | 42 | (1) | - | 7 | 41 | 7 | |
| Profit/(loss) to the owners of parent | 11 | 9 | (2) | (0) | 92 | (4) | 0 | 19 | 101 | 24 |
| WWASA group | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | (discontinued operations) |
Maritime Services | Supply Services | Holding & Investments |
Eliminations | Total | ||||||
| 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | 31.03 | |
| Year to date | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 |
| Assets | ||||||||||||
| Deferred tax asset | 56 | 4 | 14 | 3 | 4 | 6 | - | - | 11 | 77 | ||
| Intangible assets | 6 | 168 | 138 | 9 | 0 | 0 | - | - | 178 | 144 | ||
| Tangible assets | 1 822 | 192 | 171 | 415 | 2 | 2 | - | - | 610 | 1 995 | ||
| Investments in joint ventures and associates | 775 | 13 | 13 | 184 | 836 | 466 | - | - | 1 033 | 1 254 | ||
| Other non current assets | 1 | 115 | 109 | 6 | 864 | 166 | (21) | 965 | 275 | |||
| Current financial investments | 150 | 0 | 0 | - | 99 | 87 | - | - | 99 | 237 | ||
| Other current assets | 16 | 328 | 316 | 67 | 57 | 20 | (40) | (2) | 412 | 351 | ||
| Cash and cash equivalents | 121 | 143 | 166 | 10 | 18 | 41 | - | - | 171 | 328 | ||
| Total assets | 0 2 946 | 965 | 927 | 694 | 1 881 | 788 | (61) | (2) 3 478 | 4 660 | |||
| Equity and liabilities | ||||||||||||
| Equity majority | 1 062 | 355 | 345 | 159 | 1 592 | 525 | - | - | 2 105 | 1 932 | ||
| Equity non controlling interest | 398 | (1) | (0) | 57 | 200 | 213 | - | - | 256 | 611 | ||
| Deferred tax | 5 | 14 | - | (0) | (0) | - | - | 5 | 14 | |||
| Interest-bearing debt | 1 267 | 196 | 170 | 380 | 64 | 33 | (19) | 621 | 1 469 | |||
| Other non current liabilities | 164 | 107 | 115 | 19 | 10 | 8 | (2) | 133 | 287 | |||
| Other current liabilities | 55 | 303 | 284 | 79 | 16 | 10 | (40) | (2) | 358 | 347 | ||
| Total equity and liabilities | 0 2 946 | 965 | 927 | 694 | 1 881 | 788 | (61) | (2) 3 478 | 4 660 |
| USD mill | Maritime Services | Supply services | Holding & Investments | ||||
|---|---|---|---|---|---|---|---|
| Quarter | Q1 2018 | Q1 2017 | Q1 2018 | Q1 2017 | Q1 2018 | Q1 2017 | |
| Profit before tax | 14 | 12 | (2) | 134 | (4) | ||
| Change in fair value financial assets | (3) | (121) | |||||
| Other financial (income)/expenses | (1) | (6) | 4 | (14) | (2) | ||
| Depreciation/impairment | 4 | 4 | 6 | 0 | - | ||
| Change in working capital | (7) | 9 | 7 | (4) | (0) | ||
| Net (gain)/loss from sale of subsidiaries and fixed assets | (1) | (1) | (0) | - | |||
| Net cash provided by operating activities | 6 | 18 | 15 | - | (3) | (6) | |
| Share of profit from joint ventures and associates | (1) | (1) | (1) | (4) | 1 | ||
| Dividend received from joint ventures and associates | 1 | 1 | - | ||||
| Net sale/(investments) in fixed assets | (3) | (2) | (2) | ||||
| Current financial investments | 0 | 0 | 2 | (7) | |||
| Net cash flow from investing activities | (4) | (2) | (2) | - | (2) | (6) | |
| Net change of debt | (10) | (7) | 8 | ||||
| Net change in other financial items | (3) | (2) | (4) | 1 | (0) | ||
| Net dividend from other segments/ to shareholders | - | - | - | 1 | |||
| Net cash flow from financing activities | (3) | (12) | (10) | - | 9 | 1 | |
| Net increase in cash and cash equivalents | (1) | 4 | 2 | - | 3 | (12) | |
| Cash and cash equivalents at the beg.of the period | 144 | 161 | 7 | 15 | 54 | ||
| Cash and cash equivalents at the end of period | 143 | 165 | 10 | - | 18 | 42 |
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 2018, the group acquiree additional portion of shares from management. The total ownership is 74.57 % at end of March 2018.
Total consideration for the Wilhelmsen's additional 32% investment in NorSea Group is NOK 545 million (USD 70 million). The acquistion from management increased the total consideration with USD 4 million.
The investment is financed through existing liquidity and funding reserves. The group originally acquired 35.4% of the shares in NorSea Group in July 2012, and increased to 40% ownership in April 2014. In addition, the group has USD 18 million in loans to NorSea Group.
The acquistion balance from NorSea Group is consolidated at the end of September 2017 and a part of the segment "Supply Services". With effect from the fourth quarter 2017, NorSea Group will be reported as a subsidiary in the group accounts. Total income, cost and balance sheet items of NorSea Group will then be consolidated on a 100% basis, with non-controlling interests deducted on a net basis.
NorSea Group has previously been reported as associate in the group accounts Accounting loss of the disposal of associate is USD 40 million, mainly due to change in NOK/USD from 2012 to 2017.
The Purchase Price Allocation is preliminary due to final valuation of fair value of assets.
| Cash | 74 |
|---|---|
| Option fair value * | 2 |
| Non-controlling interest | 52 |
| Fair value of previously held equity interest | 80 |
| Total purchase consideration | 208 |
| Fair value of net identifiable assets acquired (see below) | 208 |
| Goodwill | 0 |
* The option is related to remaining part of the shares, currently held by non controlling interests.
| USD mill | Fair value |
|---|---|
| Intangible assets | 10 |
| Property, fixtures and vessels | 417 |
| Other long-term assets/ associate and joint arrangements | 185 |
| Other current assets | 67 |
| Cash and cash equivalents | 5 |
| Non current interest-bearing debt | (352) |
| Other non-current liabilities | (4) |
| Other current liabilities | (121) |
| Net identifiable assets acquired | 208 |
The group recognises non-controlling interests in an acquired entity at fair value This decision is made on an acquisition-by-acquisition basis. For the non-controlling interests in NorSea group, the group elected to recognise the non-controlling interests in at its proportionate share of the acquired net identifiable assets.
The acquired business contributed revenues of USD 53 million and net profit before non-controlling interests of USD 3,9 million to the group for the period from 26 September to 31 December 2017.
If the acquisition had occurred on 1 January 2017, consolidated pro-forma revenue and profit before non-controlling interests for the period from 1 January to 26 September 2017 would have been USD 186 million and USD 12 million respectively.
| Cash consideration at the end of March 2018 | 74 |
|---|---|
| Less balance acquired | |
| Cash | 5 |
| Net | 5 |
| Net outflow of cash => investing activities | (69) |
Acquisition-related costs of USD 1 million that were not directly attributable to the issue of shares are included in other expenses in income statement and in operating cash flows in the statement of cash flows.
| Net profit from NorSea Group as an associate a part of segment Holding & |
2017 | Q1 | Q2 | Q3 | YTD |
|---|---|---|---|---|---|
| Investments | 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.
The annual general meeting on 26 April 2018 approved the proposed liquidation of 100 000 own class A shares demoninated NOK 20 per share. The share capital is reduced from NOK 930 076 480 by NOK 2 000 000 to NOK 928 076 480.
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.
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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