Quarterly Report • Aug 4, 2016
Quarterly Report
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Proportionate method1
| EPS (USD) | 0,78 | 1,73 | -55 % | 1,43 | -45 % | 2,51 | 2,89 | -13 % |
|---|---|---|---|---|---|---|---|---|
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| - Holding & Investments | 1 6 |
8 | 1 5 |
24 | 23 | |||
| - Wilhelmsen Maritime Services | 7 | 6 | 22 % | 1 1 |
-30 % | 14 | 35 | -61 % |
| - Wilh. Wilhelmsen ASA | 1 2 |
6 7 |
-81 % | 4 1 |
-70 % | 79 | 76 | 5 % |
| Profit/(loss) after minority | 36 | 80 | -55 % | 66 | -45 % | 117 | 134 | -13 % |
| Minority interests | 1 1 |
2 9 |
2 0 |
40 | 36 | |||
| Tax income/(expenses) | -5 | -10 | -9 | -15 | -13 | |||
| Financial income/(expenses) | -25 | -23 | -8 | -47 | -42 | |||
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| - Holding & Investments | 1 7 |
1 5 |
1 6 |
33 | 23 | |||
| - Wilhelmsen Maritime Services | 1 7 |
1 4 |
22 % | 2 8 |
-40 % | 31 | 55 | -44 % |
| - Wilh. Wilhelmsen ASA | 42 | 113 | -63 % | 6 0 |
-29 % | 156 | 148 | 5 % |
| Operating profit/EBIT | 77 | 143 | -46 % | 103 | -25 % | 219 | 225 | -3 % |
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| - Holding & Investments | 1 8 |
1 5 |
1 6 |
33 | 23 | |||
| - Wilhelmsen Maritime Services | 2 3 |
2 0 |
17 % | 3 3 |
-31 % | 43 | 65 | -34 % |
| - Wilh. Wilhelmsen ASA | 80 | 148 | -46 % | 100 | -20 % | 228 | 226 | 1 % |
| EBITDA | 121 | 183 | -34 % | 148 | -19 % | 304 | 314 | -3 % |
| - Eliminations | -6 | -6 | -7 | -12 | -13 | |||
| - Holding & Investments | 3 2 |
2 3 |
2 3 |
55 | 38 | |||
| - Wilhelmsen Maritime Services | 235 | 235 | 0 % | 254 | -7 % | 470 | 511 | -8 % |
| - Wilh. Wilhelmsen ASA | 531 | 595 | -11 % | 583 | -9 % | 1 126 | 1 183 | -5 % |
| Total income | 792 | 848 | -7 % | 854 | -7 % | 1 639 | 1 720 | -5 % |
| - unless otherwise indicated | Q2'16 | Q1'16 | Change | Q2'15 | Change | 30.06.16 | 30.06.15 | Change |
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
Wilh. Wilhelmsen Holding group:
Wilh. Wilhelmsen ASA:
Wilhelmsen Maritime Services:
Holding and investments:
The same accounting principles are applied in both the management reports and the financial accounts, and comply with the International Financial Reporting Standards (IFRS).
1 While the equity method provides a fair presentation of the group's financial position in joint ventures, the group's internal financial segment reporting is based on the proportionate method. The major contributors in Wilh. Wilhelmsen ASA are joint ventures and hence the proportionate method gives management a higher level of information and a fuller picture of the group's operations. For Wilhelmsen Maritime Services and Holding and Investments the financial reporting will be the same for both the equity and the proportionate methods.
Total income for the Wilh. Wilhelmsen Holding ASA group (WWH) was USD 792 million in the second quarter of 2016. This was a reduction from the previous quarter which included a nonrecurring gain related to WWASA logistics investments. When adjusting for this nonrecurring gain, income was up 3% for the quarter.
Wilh. Wilhelmsen ASA's (WWASA) shipping volumes improved in the second quarter. Income in Wilhelmsen Maritime Services (WMS) remained subdued, reflecting a generally week shipping and offshore market. Income was up in Holding and Investment, mainly due to improved net result in Hyundai Glovis.
The operating profit for the quarter was USD 77 million. This was an increase of 23% from the previous quarter when adjusting for the nonrecurring gain in WWASA impacting first quarter results. The improvement in underlying operating profit was supported by increased WWASA shipping volumes, improved operating margin in WMS and increased contribution from Holding and investments.
Net financials were negative with USD 25 million in the second quarter. Net interest rate derivatives and net currency were both negative with a loss of USD 9 million, while financial derivatives for bunkers was positive with USD 4 million.
Tax expense was included with USD 5 million in the second quarter.
Minority interests' share of net profit for the quarter was USD 11 million, of which USD 6 million was related to minority shareholders in WWASA and USD 5 million was related to minority shareholders in Treasure ASA.
Profit after tax and minority interests totalled USD 36 million in the second quarter, down from USD 80 million in the first quarter.
The Wilh. Wilhelmsen ASA group (WWASA) is a global provider of shipping and logistics services towards car and ro-ro customers. WWH owns 72.7% of WWASA. In line with accounting standards, all revenue and expenses in WWASA are reported in full with minority interest included after net profit/(loss).
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
|---|---|---|---|---|---|---|---|---|
| - unless otherwise indicated | Q2'16 | Q1'16 | Change | Q2'15 | Change | 30.06.16 | 30.06.15 | Change |
| Total income | 531 | 595 | -11 % | 583 | -9 % | 1 126 | 1 183 | -5 % |
| - Shipping | 372 | 357 | 4 % | 470 | -21 % | 729 | 930 | -22 % |
| - Logistics | 167 | 259 | -36 % | 134 | 25 % | 425 | 289 | 47 % |
| - Holding/eliminations | -8 | -7 | -7 | -15 | -14 | |||
| EBITDA | 80 | 148 | -46 % | 100 | -20 % | 228 | 226 | 1 % |
| - EBITDA margin (%) | 15,1 % | 24,9 % | 17,1 % | 20,3 % | 19,1 % | |||
| Operating profit/EBIT | 42 | 113 | -63 % | 98 | -57 % | 156 | 148 | 5 % |
| - EBIT margin (%) | 8,0 % | 19,0 % | 16,8 % | 13,8 % | 12,5 % | |||
| - Financial income/(expense) | -21 | -15 | 4 | -36 | -42 | |||
| - Tax income/(expense) | -3 | -6 | -7 | -9 | -2 | |||
| Profit/(loss) | 18 | 95 | 61 | 114 | 111 | |||
| - Profit margin (%) | 3,5 % | 16,0 % | 10,4 % | 10,1 % | 9,4 % | |||
| - Minority interests | 6 | 2 9 |
1 9 |
35 | 35 | |||
| Profit/(loss) after minority | 12 | 67 | 41 | 79 | 76 |
The results reported under the WWASA segment exclude historic results from activities demerged into Treasure ASA on 8 June 2016. The WWH segment accounts for WWASA will as such deviate from the results reported by WWASA prior to the demerger.
WWASA's total income was USD 531 million in the second quarter, while operating profit was USD 42 million. This was down from previous quarter which was positively impacted by a USD 80 million non-recurring gain related to the logistics activites. When excluding this nonrecurring gain, income was up 3 per cent and operating profit was up 27 per cent when compared with the first quarter.
Net financial expenses in the second quarter amounted to USD 21 million compared with USD 15 million in the previous quarter.
The group recorded a tax expense of USD 3 million for the quarter compared with an expense of USD 6 million in first quarter.
Net profit after tax was USD 18 million in the second quarter, of which USD 12 million was attributed to WWH.
WWASA's shipping segment includes shipping activities within Wallenius Wilhelmsen Logistics (WWL, owned 50%), EUKOR Car Carrier (EUKOR, owned 40%) and American Roll-on-Roll-off Carrier (ARC, owned 50%), as well as certain shipowning activities outside the operating companies.
WWASA's operating entities transported 16.8 million cubic metres (CBM) in the second quarter, an 8% increase quarter on quarter driven by seasonally higher demand for transportation of cars as well as high and heavy.
Reduced bunker compensation and increased bunker prices resulted in increased net bunker costs in the second quarter, which partly offset the improvement in the underlying activities.
In key markets, total light vehicle sales in the second quarter grew by 3% from the previous quarter and increased by 6% compared with the same period last year.
Japanese car exports continued its stable trend in the second quarter and were slightly below volumes in the previous quarter while slightly higher than the same period last year. Car exports out of Korea increased 7% in the second quarter from the first quarter, however exports were 14% below the same period in 2015.
The global construction equipment market continued in the second quarter its overall soft development, mainly driven by a drop in sales in China, North America and Japan. The global demand for mining equipment also remained weak, due to continued low commodity prices and few new mining investments. Demand for agriculture equipment continued the declining trend from 2015, impacted by lower crop prices forcing farmers to curb their spending.
With the delivery of two Post-Panamax vessels to Wilh. Wilhelmsen ASA, Theben and Themis, in the second quarter of 2016, the combined fleet of the group companies grew to 134 vessels. The group operates approximately 22% of the global fleet.
The group has a combined lifting capacity of 889.000 CEU, up by 16.000 CEU in Q2.
The group has six vessels under construction at shipyards in Korea and China. All six vessels are large Post-Panamax, vessels with capacity for 8.000 CEU each. Four vessels are ordered by Wallenius Lines while two are under construction for EUKOR Car Carriers.
WWASA's logistics segment includes logistics activities within Wallenius Wilhelmsen Logistics (WWL, owned 50%) and American Shipping and Logistics Group (ASL, owned 50%).
Underlying results improved compared with the previous quarter and continued on a healthy level.
The WWASA share was subject to a repricing following demerger of Treasure ASA on 8 June 2016. As of 30 June 2016, the market value of WWH's shares in WWASA was NOK 3 360 million. This represented NOK 72 per outstanding share in WWH (WWI and WWIB).
| Value of investment: | End |
|---|---|
| Wilh. Wilhelmsen ASA | Q2'16 |
| WWASA share price (NOK) | 21,00 |
| WWASA shares held by WWH (million) | 160 |
| Value of WWH shareholding (NOK million) | 3 360 |
| Value per WWI/WWIB share (NOK) | 72 |
The joint venture companies WWL and EUKOR continues to be part of anti-trust investigations in several jurisdictions, of which the EU is among the bigger jurisdictions.
WWL reached a settlement with the US Department of Justice (DOJ) in July, agreeing to pay a fine of USD 98.9 million (USD 49.5 million for WWASAs account). WWASA made a provision for the outcome of the investigation in the third quarter 2015. Consequently, the fine will not have a profit and loss effect for WWASA in 2016. The settlement also closed the DOJ investigation into EUKOR. EUKOR did not receive a fine.
The ongoing investigations of WWL and EUKOR are confidential. WWASA is therefore not in a position to comment on the ongoing investigations within remaining jurisdictions. The processes are expected to continue to take time, but further clarifications are expected during 2016 and 2017.
The Wilhelmsen Maritime Services group (WMS) is a global provider of ships service, ship management and technical solutions towards the maritime industry. WMS is a wholly-owned subsidiary of WWH.
| Key figures - Wilhelmsen Maritime Services | ||||||||
|---|---|---|---|---|---|---|---|---|
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
| - unless otherwise indicated | Q2'16 | Q1'16 | Change | Q2'15 | Change | 30.06.16 | 30.06.15 | Change |
| Total income | 235 | 235 | 0 % | 254 | -7 % | 470 | 511 | -8 % |
| - Ships service | 150 | 152 | -1 % | 159 | -6 % | 302 | 326 | -7 % |
| - Ship management | 1 2 |
1 2 |
-3 % | 1 3 |
-10 % | 24 | 27 | -10 % |
| - Technical solutions | 7 3 |
6 9 |
5 % | 8 1 |
-10 % | 142 | 155 | -9 % |
| - Corporate/other/eliminations | 1 | 1 | 1 | 2 | 4 | |||
| EBITDA | 23 | 20 | 17 % | 33 | -31 % | 43 | 65 | -34 % |
| - EBITDA margin (%) | 9,7 % | 8,4 % | 13,0 % | 9,1 % | 12,7 % | |||
| Operating profit/EBIT | 17 | 14 | 22 % | 28 | -40 % | 31 | 55 | -44 % |
| - EBIT margin (%) | 7,2 % | 5,9 % | 11,0 % | 6,5 % | 10,7 % | |||
| - Financial income/(expense) | -7 | -5 | -13 | -12 | -6 | |||
| - Tax income/(expense) | -3 | -2 | -4 | -5 | -13 | |||
| Profit/(loss) | 8 | 7 | 11 | 14 | 36 | |||
| - Profit margin (%) | 3,2 % | 2,8 % | 4,4 % | 3,0 % | 7,1 % | |||
| - Minority interests | 0 | 0 | 0 | 1 | 1 | |||
| Profit/(loss) after minority | 7 | 6 | 11 | 14 | 35 |
WMS' total income of USD 235 million was in line with the first quarter, with a quite stable income for most business areas.
Operating profit was USD 17 million, up by 22% compared with a weak first quarter. The strong USD continued to have a positive impact on operating profit for the group, while a continued weak shipping and offshore market had the opposite effect.
Financial expense for WMS amounted to USD 7 million, impacted by a USD 5 million financial currency loss.
Tax expense was USD 3 million, representing normal tax for the quarter.
The net profit after tax and minority for the quarter was USD 7 million.
Wilhelmsen Ships Service (WSS) is a global provider of standardised product brands and service solutions to the maritime industry, focusing on marine products, marine chemicals, safety products and services, maritime logistics and ships agency. WSS is a wholly owned subsidiary of WMS.
The second quarter shows a slight decline in total income compared with the first quarter. When measured against the total global merchant fleet1, WSS generated income of USD 32 per day/vessel in the second quarter.
Operating profit improved from a low first quarter. The business performance was, however, still impacted by the adaptation to the new ERP system, which went live in January 2016 with 2000 users in 165 locations.
Wilhelmsen Ship Management (WSM) provides full technical management, crewing and related services for all major vessel types with exception of oil tankers. WSM is a wholly owned subsidiary of WMS.
Total income was reduced by 3% and net operating profit decreased compared with the previous quarter. The second quarter was impacted by lower business volume, currency and restructuring cost.
Average number of vessels on full technical management was slightly lower than previous quarter. By the end of June, WSM served 398 ships worldwide, of which approximately 34% were on full technical management and 14% were on layup management. The remaining contracts were related to crewing services.
The technical solutions business area includes entities providing fully engineered solutions, equipment and services towards the maritime and offshore industries, focusing on safety systems, electrical energy management, HVAC-R and insulation for newbuilds and retrofits. These entities operate in the market as Wilhelmsen Technical Solutions and Callenberg Technology Group.
The total income was up by 5% compared with the previous quarter. The increase was mainly due to higher activities within HVAC-R. The total order reserve was reduced to USD 259 million at the end of the second quarter compared with USD 302 million by the end of first quarter.
Challenging conditions in the global offshore market continued to have an impact on revenue and operating profit.
This includes WMS group activities, Wilhelmsen Insurance Services (WIS) and certain corporate services.
On 23 June, WMS signed an agreement to sell its WSS and WTS safety business to Survitec Group Ltd, where after WMS will take a 20% ownership stake in Survitec. Contract completion is expected in the fourth quarter of 2016.
Holding and investments include activities performed by the holding company and investments outside WWASA and WMS. This includes investments held by Wilh. Wilhelmsen Holding Invest (WWHI), a wholly owned subsidiary of WWH, and Treasure ASA, owned 72.7%.
| Key figures - Holding and investments | ||||||||
|---|---|---|---|---|---|---|---|---|
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
| - unless otherwise indicated | Q2'16 | Q1'16 | Change | Q2'15 | Change | 30.06.16 | 30.06.15 | Change |
| Total income | 32 | 23 | 35 % | 23 | 35 % | 55 | 38 | 43 % |
| - Holding | 1 2 |
6 | >100% | 6 | 99 % | 17 | 11 | 64 % |
| - NorSea Group | 2 | 5 | -69 % | 4 | -65 % | 6 | 5 | 17 % |
| - Treasure ASA (Hyundai Glovis) | 1 8 |
1 3 |
43 % | 1 3 |
38 % | 31 | 22 | 40 % |
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| EBITDA | 18 | 15 | 16 | 33 | 23 | |||
| Operating profit/EBIT | 17 | 15 | 16 | 33 | 23 | |||
| Financial income/(expenses) | 3 | -2 | neg. | 1 | >100% | 0 | 5 | -93 % |
| - Investment management | 1 | -2 | 0 | 0 | 5 | |||
| - Qube | 4 | 0 | 1 | 4 | 1 | |||
| - Other financial income/(expense) | -3 | -1 | 0 | -3 | -1 | |||
| - Tax income/(expense) | 1 | -2 | 2 | -1 | 1 | |||
| Profit/(loss) | 21 | 11 | 18 | 32 | 29 | |||
| - Minority interests | 5 | 4 | 4 | 8 | 6 | |||
| Profit/(loss) after minority | 16 | 8 | 15 | 24 | 23 |
The results reported under the Holding and Investment segment include historic results from activities demerged from WWASA into Treasure ASA. These activities were previously reported under the WWASA segment.
Total income for the Holding and investments segment was USD 32 million in the second quarter, an increase of 35% when compared with the first quarter. Income from Huyundai Glovis and holding activities mainly provided on a pass through basis increased, while the contribution from NorSea Group was down.
The operating profit in Holding and investments increased to USD 17 million, primarily reflecting the increased contribution from Hyundai Glovis.
Net financials was a net income of USD 3 million, including USD 4 million in dividend and sales gain from shareholding in Qube.
Net profit after tax was USD 21 million in the second quarter, of which USD 16 million was attributed to WWH.
Treasure ASA is a Norwegian public limited liability company, holding a 12.04% ownership interest in Hyundai Glovis. WWH owns 72.7% of Treasure ASA. Hyundai Glovis is reported as "associate" in WWH's accounts, with share of net result reported as "share of profit from associates" one quarter in arrears.
Hyundai Glovis reported a net profit of KRW 179.3 billion for the first quarter of 2016. This represented an increase of 40% compared with the previous quarter. Treasure ASA's share of the net profit, equivalent to USD 18 million, was reported as operating income in WWH in the second quarter.
Treasure ASA was listed on the Oslo Stock Exchange on 8 June 2016, following a demerger from WWASA. As of 30 June 2016, the market value of WWH's shares in Treasure ASA was NOK 2 544 million. This represented NOK 55 per outstanding share in WWH (WWI and WWIB).
| Value of investment: | End |
|---|---|
| Treasure ASA | Q2'16 |
| TRE share price (NOK) | 15,90 |
| TRE shares held by WWH (million) | 160 |
| Value of WWH shareholding (NOK million) | 2 544 |
| Value per WWI/WWIB share (NOK) | 55 |
NSG is a leading provider of supply bases and integrated logistics solution to the Norwegian and Danish offshore industry. Through WWHI, WWH owns 40% of NSG. NSG is reported as "associate" in WWH's accounts, with share of net result reported as "share of profit from associates".
Preliminary total income for NSG was NOK 562 million in the second quarter, including share of profits from associates and joint ventures and sales gains.
Operating profit for the quarter was in line with the first quarter when adjusting for nonrecurring sales gain impacting the first quarter results.
WWHI share of net result in NSG was USD 2 million for the quarter.
As part of a re-alignment between shareholders, WWHI increased its share of NSG shareholder loans with USD 8 million in the second quarter.
This includes cash and cash equivalents, current financial investments and available for sale financial assets held by the parent company, Wilh. Wilhelmsen Holding Invest, Treasure ASA and other subsidiaries reported under the Holding and investment segment.
| Holding and investments USD mill. - unless otherwise indicated |
30.06.16 |
|---|---|
| Cash and cash equivelent | 66 |
| Current financial investments | 85 |
| Available for sale financial assets | 122 |
| Total financial assets | 273 |
| Total debt | 35 |
The current financial investment portfolio held by WWH was USD 85 million by the end of the first quarter, down from USD 87 million by the end of the previous quarter. The portfolio primarily included Nordic equities and investment-grade bonds. Net income from investment management was USD 1 million in the second quarter.
Available for sale financial assets included shares in Qube Holdings Limited and Kaplan Equity Limited. Changes in market value of these shareholdings are reported under comprehensive income, while dividend income and sales gains/losses are reported as financial income.
In February, Qube declared interim dividend of AUD 0.027 per share, payable in April. Total proceeds to WWHI of USD 1 million was reported in the second quarter. In the second quarter WWHI sold 3.5 million shares in Qube with a gain of USD 3 million, reducing shareholding to 70 million shares by the end of the quarter.
Holding/other activities includes WilNor Governmental Services (owned 51%) and general holding activities.
Income was up in the second quarter, mainly due to pass through revenue in WilNor Governmental Services.
Health and safety metrics are reported using industry standard methods for two types of operations within the group: vessel based operations where health and safety exposure is 24 hours per day and onshore operations where health and safety exposure is typically ~8 hours per day.
WWH uses an operational control approach for consolidating health and safety data from WWH's wholly owned businesses and operations in order to consistently account for result
In the second quarter of 2016, there were approximately 10.4 million exposure hours (work hours) in the group. Vessel based operations account for about 77% of total exposure hours and onshore operations accounts for about 23%.
Sickness absence In the second quarter of 2016, the sickness absence rate for onshore operations was 1.59 %. This was an improvement compared with the first quarter and below the 2015 base year result of 1.67%.
In the second quarter, an incident lead to one work related fatality on board a laid up vessel. For vessel based operations, the losttime injury frequency rate was 0.25, a reduction from the first quarter and in line with the target not to exceed 0.60 for 2016. The total recordable case frequency rate for vessel based operations result was 2.0 against the target of 2.8. For onshore operations, the losttime injury frequency rate was 0.70 and the total recordable case frequency rate was 1.05. This was above level experienced in the first quarter. Continued improvement of reporting of total recordable cases is in focus with education, robust reporting methods, and management attention.
The WWH share price was down in the second quarter, reducing some of the gains from the first quarter. By the end of the quarter, the WWI share price was NOK 148.00 and the WWIB share price was NOK 140.00, a quarterly reduction of 3% and 5% respectively when adjusting for dividend paid.
The annual general meeting held 3 May 2016 approved a dividend of NOK 3.00 per share, which was paid on 13 May. The general meeting also authorised the board to declare further dividend of up to NOK 3.00 per share. The authorisation is valid until the annual general meeting in 2017, although no longer than 30 June 2017.
| Share price and outstanding shares: | End | End |
|---|---|---|
| Wilh. Wilhelmsen Holding ASA | Q2'16 | Q1'16 |
| WWI share price (NOK) | 148,00 | 156,00 |
| WWIB share price (NOK) | 140,00 | 150,00 |
| WWI shares | 34 637 092 34 637 092 | |
| - of which owned by the company | 100 000 | 100 000 |
| WWIB shares | 11 866 732 11 866 732 | |
| - of which owned by the company | 0 | 0 |
| Total outstanding shares | 46 403 824 46 403 824 | |
| Return: | ||
| Wilh. Wilhelmsen Holding ASA | Q2'16 | YTD |
| WWI dividend (NOK per share) | 3,00 | 3,00 |
| WWI price return (share price development) | -5 % | 11 % |
| WWI total return (incl. dividend; not reinvested) | -3 % | 13 % |
| WWIB dividend (NOK per share) | 3,00 | 3,00 |
| WWIB price return (share price development) | -7 % | 8 % |
| WWIB total return (incl. dividend; not reinvested) | -5 % | 10 % |
WWASA expects volume growth to remain weak over the next period.
A general soft maritime services market will continue to impact WMS income short term.
The agreed restructuring of the safety activities will have a one-off positive contribution when concluded, and create long term opportunities.
With most investments in traded shares, the short term value development of the Holding and investments segment will remain sensitive to the global stock market.
The board expects the general business environment to remain soft, impacting most group activities and performance.
Lysaker, 4 August 2016 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.
Joint ventures based on proportionate method (restated figures for WWASA group and Holding & Investments)
| Holding and | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group | WMS group | Investments 3 | Eliminations | Total | ||||||||||
| Quarter | Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
| Operating revenue | 530 | 583 | 2 243 | 233 | 252 | 998 | 12 | 6 | 21 | (6) | (7) | (25) | 769 | 833 | 3 237 |
| Other income Share of profits from |
0 | 0 | |||||||||||||
| associates | 0 | 0 | 1 | 1 | 0 | 5 | 20 | 18 | 43 | 0 | 0 | 0 | 21 | 18 | 49 |
| Gain on sale of assets | 0 | 0 | 29 | 1 | 2 | 7 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 2 | 35 |
| Total income | 531 | 583 | 2 272 | 235 | 254 | 1 010 | 32 | 23 | 64 | (6) | (7) | (25) | 792 | 854 | 3 321 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (160) | (217) | (818) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (160) | (217) | (818) |
| Vessel expenses | (20) | (22) | (85) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (20) | (22) | (85) |
| Charter expenses | (69) | (84) | (316) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (69) | (84) | (316) |
| Inventory cost | 0 | 0 | 0 | (104) | (116) | (458) | (0) | (0) | (1) | 0 | 0 | 0 | (104) | (116) | (460) |
| Employee benefits | (40) | (42) | (168) | (68) | (68) | (263) | (4) | (4) | (16) | 0 | 0 | 1 | (112) | (114) | (446) |
| Other expenses | (162) | (119) | (658) | (40) | (37) | (150) | (10) | (3) | (14) | 6 | 6 | 24 | (206) | (153) | (799) |
| Depreciation and impairments | (38) | (40) | (160) | (6) | (5) | (73) | (0) | 0 | 0 | 0 | 0 | 0 | (44) | (45) | (233) |
| Total operating expenses | (488) | (523) | (2 205) | (218) | (226) | (944) | (14) | (8) | (31) | 6 | 7 | 25 | (715) | (751) (3 157) | |
| Operating profit 2 | 42 | 60 | 67 | 17 | 28 | 65 | 17 | 16 | 33 | 0 | 0 | (0) | 77 | 103 | 165 |
| Financial income/(expenses) | (21) | 4 | (128) | (7) | (13) | 3 | 3 | 1 | 9 | 0 | 0 | 0 | (25) | (8) | (117) |
| Profit/(loss) before tax | 22 | 64 | (61) | 10 | 15 | 69 | 20 | 17 | 41 | 0 | 0 | (0) | 52 | 95 | 48 |
| Tax income/(expense) | (3) | (7) | 23 | (3) | (4) | (16) | 1 | 2 | 2 | 0 | 0 | 0 | (5) | (9) | 8 |
| Profit/(loss) | 18 | 57 | (38) | 8 | 11 | 52 | 21 | 18 | 43 | 0 | 0 | (0) | 47 | 86 | 56 |
| Minority interests | 6 | 16 | (9) | 0 | 0 | 2 | 5 | 4 | 10 | 0 | 0 | 0 | 11 | 20 | 2 |
| Profit/(loss) to the owners of | |||||||||||||||
| parent | 12 | 41 | (29) | 7 | 11 | 50 | 16 | 15 | 33 | 0 | 0 | (0) | 36 | 66 | 54 |
1 The report is based on the proportionate method for all material joint ventures in the WWH group. In Wilh. Wilhelmsen Holding group's financial interim reports, the equity method is applied for consolidation of joint ventures. This method provides a fair presentation of the group's financial position. However, during the day to day operations, management are using the proportionate method for their analysis and decision making.
2 Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
3 Holding and Investments includes Wilh.Wilhelmsen Holding ASA, Wilh.Wilhelmsen Holding Invest group and minor activities which fail to meet the definition for other segments.
No material acquisitions or disposals in second quarter
WWASA group: Q1 - An accounting gain of USD 80 million as a result of step acquisition in Vehicle Services Americas (VSA) and CAT-WWL, and sale of Vehicle Services Europe (VSE). Loss of USD 3.5 million related to recycling of three vessels.
No material acquisitions or disposals in second quarter
WWASA group: Q1 - Disposal of 0.5% shares in Hyundai Glovis by a gain of USD 26 mill.
Joint ventures based on proportionate method (restated figures for WWASA group and Holding & Investments)
| Holding and | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group | WMS group | Investments 3 | Eliminations | Total | |||||
| Year to date | YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
| Operating revenue | 1 046 | 1 156 | 466 | 505 | 17 | 11 | (12) | (13) | 1 517 | 1 658 |
| Other income Share of profits from associates |
0 0 |
0 0 |
2 | 2 | 38 | 28 | 0 | 0 | 40 | 30 |
| Gain on sale of assets | 80 | 27 | 2 | 4 | 0 | 0 | 0 | 0 | 82 | 31 |
| Total income | 1 126 | 1 183 | 470 | 511 | 55 | 38 | (12) | (13) | 1 639 | 1 720 |
| Operating expenses | ||||||||||
| Voyage expenses | (320) | (432) | 0 | 0 | 0 | 0 | 0 | 0 | (320) | (432) |
| Vessel expenses | (40) | (45) | 0 | 0 | 0 | 0 | 0 | 0 | (40) | (45) |
| Charter expenses | (136) | (163) | 0 | 0 | 0 | 0 | 0 | 0 | (136) | (163) |
| Inventory cost | 0 | 0 | (213) | (234) | (0) | (0) | 0 | 0 | (214) | (234) |
| Employee benefits | (83) | (84) | (136) | (136) | (8) | (9) | 0 | 0 | (226) | (228) |
| Other expenses | (319) | (233) | (79) | (77) | (14) | (7) | 11 | 12 | (400) | (304) |
| Depreciation and impairments | (72) | (78) | (12) | (10) | (0) | 0 | 0 | 0 | (85) | (88) |
| Total operating expenses | (970) | (1 034) | (439) | (457) | (22) | (16) | 12 | 13 | (1 420) | (1 494) |
| Operating profit 2 | 156 | 148 | 31 | 55 | 33 | 23 | 0 | (0) | 219 | 225 |
| Financial income/(expenses) | (36) | (42) | (12) | (6) | 0 | 5 | 0 | 0 | (47) | (42) |
| Profit/(loss) before tax | 120 | 106 | 19 | 49 | 33 | 28 | 0 | (0) | 172 | 183 |
| Tax income/(expense) | (9) | (2) | (5) | (13) | (1) | 1 | 0 | 0 | (15) | (13) |
| Profit/(loss) | 110 | 105 | 14 | 36 | 32 | 30 | 0 | (0) | 157 | 170 |
| Minority interests | 31 | 29 | 1 | 1 | 8 | 6 | 0 | 0 | 40 | 36 |
| Profit/(loss) to the owners of parent | 79 | 76 | 14 | 35 | 24 | 24 | 0 | (0) | 117 | 134 |
1 / 2 / 3 Comments - see previous page
No material acquisitions or disposals in second quarter
WWASA group: Q1 - An accounting gain of USD 80 million as a result of step acquisition in Vehicle Services Americas (VSA) and CAT-WWL, and sale of Vehicle Services Europe (VSE). Loss of USD 3.5 million related to recycling of three vessels.
There has not been any material gain/(loss) the second quarter of 2015.
WWASA group: Q1 - Disposal of 0.5% shares in Hyundai Glovis by a gain of USD 26 mill.
WMS group Q4 2015: Gain from termination of defined benefit plan USD 4 mill. Included in employee benefits
| Holding and | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group | WMS group | Investments 3 | Eliminations | Total | |||||
| Restatement | YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
YTD 2016 |
YTD 2015 |
| Reported operating profit | 169 | 171 | 31 | 55 | 20 | (0) | 219 | 225 | ||
| Share of profit from associates | (13) | (22) | 13 | 22 | 0 | 0 | ||||
| Operating profit after restatement | 156 | 148 | 31 | 55 | 33 | 22 | 219 | 225 | ||
| Profit/(loss) after restatement | 110 | 105 | 14 | 36 | 32 | 29 | 157 | 170 | ||
| Minority interests before restatement | 35 | 35 | 1 | 1 | 5 | (0) | 40 | 36 | ||
| Change in minority interests | (4) | (6) | 4 | 6 | 0 | 0 | ||||
| Profit/(loss) to the owners of parent | 79 | 76 | 14 | 35 | 24 | 24 | 117 | 134 |
Joint ventures based on proportionate method (restated figures for WWASA group and Holding & Investments)
| USD mill | WWASA group | Holding & Investments 3 | Total WWH group incl eliminations |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter on quarter | Q1 2015 |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q1 2015 |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q1 2015 |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
| Operating revenue | 573 | 583 | 546 | 541 | 515 | 5 | 6 | 5 | 6 | 6 | 825 | 833 | 779 | 800 | 748 |
| Other income Share of profits from associates |
(0) | 0 | 0 | 0 | 0 | 10 | 18 | 13 | 2 | 18 | 12 | 18 | 15 | 4 | 19 |
| Gain on sale of assets | 26 | 0 | (0) | 2 | 80 | 0 | 0 | 0 | 0 | 0 | 29 | 2 | 1 | 3 | 80 |
| Total income | 600 | 583 | 546 | 543 | 595 | 15 | 23 | 18 | 7 | 23 | 866 | 854 | 795 | 807 | 848 |
| Operating expenses Voyage expenses Vessel expenses Charter expenses Employee benefits |
(215) (23) (79) (41) |
(217) (22) (84) (42) |
(202) (23) (76) (40) |
(184) (18) (76) (44) |
(160) (20) (67) (43) |
0 0 0 (4) |
0 0 0 (4) |
0 0 0 (3) |
0 0 0 (4) |
0 0 0 (4) |
(215) (23) (79) (113) |
(217) (22) (84) (114) |
(202) (23) (76) (108) |
(184) (18) (76) (110) |
(160) (20) (67) (114) |
| Other expenses Depreciation and impairments |
(115) (38) |
(119) (40) |
(310) (41) |
(114) (41) |
(157) (35) |
(3) 0 |
(3) 0 |
(4) 0 |
(3) 0 |
(4) 0 |
(152) (43) |
(153) (45) |
(342) (98) |
(153) (47) |
(194) (41) |
| Total operating expenses | (511) | (523) | (692) | (478) | (482) | (8) | (8) | (8) | (8) | (8) | (743) | (751) | (952) | (711) | (705) |
| Operating profit 2 | 89 | 60 | (146) | 65 | 113 | 7 | 16 | 10 | (0) | 15 | 123 | 103 | (157) | 96 | 143 |
| Financial income/(expenses) | (46) | 4 | (73) | (13) | (15) | 4 | 1 | 0 | 3 | (2) | (35) | (8) | (69) | (5) | (23) |
| Profit/(loss) before tax | 43 | 64 | (219) | 51 | 98 | 11 | 17 | 10 | 3 | 13 | 88 | 95 | (226) | 91 | 120 |
| Tax income/(expense) | 5 | (7) | (5) | 30 | (6) | (0) | 2 | (0) | 0 | (2) | (4) | (9) | (16) | 37 | (10) |
| Profit/(loss) Minority interests |
47 13 |
57 16 |
(224) (61) |
81 22 |
92 25 |
11 2 |
18 4 |
10 3 |
3 0 |
11 4 |
84 16 |
86 20 |
(243) (57) |
129 23 |
110 29 |
| Profit/(loss) to the owners of parent | 34 | 41 | (163) | 59 | 67 | 9 | 15 | 7 | 3 | 8 | 68 | 66 | (186) | 105 | 80 |
The listing of Treasure ASA in June has effect on the segment financial reporting for WWASA and Holding & Investment. The share of profit from Hyundai Glovis has been moved from WWASA segment to Holding & Investment and corresponding minority interests.
No changes for WMS group
The total figures for the WWH group is not affected by the demerger of WWASA and the listing of Treasure ASA
| USD mill | WWASA group | Holding & Investments 3 | Total WWH group incl eliminations |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q4 2015 |
Q1 2016 |
Q1 2015 |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q1 2015 |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
||||
| Reported operating profit | 2015 98 |
2015 73 |
2015 (134) |
66 | 126 | (2) | 2 | (2) | (2) | 2 | 123 | 103 | (157) | 96 | 143 |
| Share of profit from associates | (9) | (13) | (12) | (2) | (13) | 9 | 13 | 12 | 2 | 13 | |||||
| Operating profit after restatement | 89 | 60 | (146) | 65 | 113 | 7 | 15 | 10 | (0) | 15 | 123 | 103 | (157) | 96 | 143 |
| Profit/(loss) after restatement | 47 | 57 | (224) | 81 | 92 | 11 | 18 | 10 | 3 | 11 | 84 | 86 | (243) | 129 | 110 |
| Minority interests before restatement | 16 | 19 | (58) | 23 | 29 | 0 | (0) | 0 | (0) | (0) | 16 | 20 | (57) | 23 | 29 |
| Change in minority interests | (2) | (4) | (3) | (0) | (4) | 2 | 4 | 3 | 0 | 4 | |||||
| Profit/(loss) to the owners of parent | 34 | 41 | (163) | 59 | 67 | 9 | 15 | 7 | 3 | 8 | 68 | 66 | (186) | 105 | 80 |
Joint ventures based on proportionate method
| WMS group (no changes) | Holding & Investments 3 restated |
Total incl eliminations (no changes) |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group restated | |||||||||||||||
| Quarter on quarter | Q3 2015 |
Q4 2015 |
Q1 2016 |
Q2 2016 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q2 2016 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q2 2016 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q2 2016 |
| Operating revenue | 546 | 541 | 515 | 530 | 234 | 260 | 233 | 233 | 5 | 6 | 6 | 12 | 779 | 800 | 748 | 769 |
| Other income Share of profits from |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
| associates | 0 | 0 | 0 | 0 | 1 | 2 | 1 | 1 | 13 | 2 | 18 | 20 | 15 | 4 | 19 | 21 |
| Gain on sale of assets | (0) | 2 | 80 | 0 | 1 | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 1 | 3 | 80 | 1 |
| Total income | 546 | 543 | 595 | 531 | 236 | 263 | 235 | 235 | 18 | 7 | 23 | 32 | 795 | 807 | 848 | 792 |
| Operating expenses | ||||||||||||||||
| Voyage expenses | (202) | (184) | (160) | (160) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (202) | (184) | (160) | (160) |
| Vessel expenses | (23) | (18) | (20) | (20) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (23) | (18) | (20) | (20) |
| Charter expenses | (76) | (76) | (67) | (69) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (76) | (76) | (67) | (69) |
| Inventory cost | 0 | 0 | 0 | 0 | (103) | (122) | (109) | (104) | (0) | (0) | (0) | (0) | (103) | (122) | (109) | (104) |
| Employee benefits | (40) | (44) | (43) | (40) | (65) | (62) | (68) | (68) | (3) | (4) | (4) | (4) | (108) | (110) | (114) | (112) |
| Other expenses Depreciation and |
(310) | (114) | (157) | (162) | (32) | (41) | (38) | (40) | (4) | (3) | (4) | (10) | (342) | (153) | (194) | (206) |
| impairments | (41) | (41) | (35) | (38) | (57) | (5) | (6) | (6) | 0 | 0 | 0 | (0) | (98) | (47) | (41) | (44) |
| Total operating expenses | (692) | (478) | (482) | (488) | (257) | (231) | (221) | (218) | (8) | (8) | (8) | (14) | (952) | (711) | (705) | (715) |
| Operating profit 2 | (146) | 65 | 113 | 42 | (21) | 32 | 14 | 17 | 10 | (0) | 15 | 17 | (157) | 96 | 143 | 77 |
| Financial income/(expenses) | (73) | (13) | (15) | (21) | 3 | 5 | (5) | (7) | 0 | 3 | (2) | 3 | (69) | (5) | (23) | (25) |
| Profit/(loss) before tax | (219) | 51 | 98 | 22 | (18) | 37 | 9 | 10 | 10 | 3 | 13 | 20 | (226) | 91 | 120 | 52 |
| Tax income/(expense) | (5) | 30 | (6) | (3) | (11) | 7 | (2) | (3) | (0) | 0 | (2) | 1 | (16) | 37 | (10) | (5) |
| Profit/(loss) | (224) | 81 | 92 | 18 | (29) | 45 | 7 | 8 | 10 | 3 | 11 | 21 | (243) | 129 | 110 | 47 |
| Minority interests | (61) | 22 | 25 | 6 | 0 | 1 | 0 | 0 | 3 | 0 | 4 | 5 | (57) | 23 | 29 | 11 |
| Profit/(loss) to the owners of parent |
(163) | 59 | 67 | 12 | (29) | 44 | 6 | 7 | 7 | 3 | 8 | 16 | (186) | 105 | 80 | 36 |
1 / 2 / 3 Comments - see previous page
Joint ventures based on proportionate method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Financial items | |||||
| Investment management 1 | 3,0 | (1,6) | 1,8 | 11,7 | 6,0 |
| Interest income | 2,6 | 1,5 | 5,1 | 3,3 | 7,0 |
| Other financial items | 3,4 | 0,5 | 1,8 | (1,2) | (9,5) |
| Net financial items | 9,0 | 0,4 | 8,7 | 13,7 | 3,5 |
| Financial - interest expenses | |||||
| Interest expenses | (20,5) | (16,7) | (39,0) | (34,3) | (68,7) |
| Interest rate derivatives - realised | (8,1) | (10,0) | (15,6) | (18,4) | (34,1) |
| Net financial - interest expenses | (28,6) | (26,6) | (54,7) | (52,7) | (102,8) |
| Interest rate derivatives - unrealised | (1,1) | 18,5 | (15,4) | 19,9 | 24,3 |
| Financial currency | |||||
| Net currency gain/(loss) | (5,7) | (22,3) | (9,4) | (14,5) | 25,7 |
| Currency derivatives - realised | (13,5) | (4,0) | (13,2) | (0,5) | (1,8) |
| Currency derivatives - unrealised | 13,3 | 14,1 | 21,5 | (0,0) | (26,2) |
| Cross currency derivatives - realised | (0,5) | (0,0) | (1,0) | 0,0 | (11,5) |
| Cross currency derivatives - unrealised | (2,2) | 11,1 | 11,0 | (10,0) | (21,4) |
| Net financial currency | (8,6) | (1,1) | 9,0 | (24,9) | (35,4) |
| Financial derivatives bunkers | |||||
| Valuation of bunker hedges | 5,1 | 0,9 | 6,5 | 1,7 | (6,3) |
| Realised portion bunker hedges | (0,8) | 0,0 | (1,5) | 0,0 | 0,0 |
| Net financial derivatives bunkers | 4,3 | 0,9 | 5,1 | 1,7 | (6,3) |
| Financial income/(expenses) | (24,9) | (7,8) | (47,4) | (42,3) | (116,5) |
1 Includes financial derivatives for trading
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Cash settled bunker and fuel hedges | (1,4) | 1,0 | (5,0) | 1,0 | (5,3) |
In Wilh. Wilhelmsen Holding's financial report the equity method is applied for consolidation of joint ventures. This method provides a fair presentation of the group's financial position.
| Y-o-Y | |||||||
|---|---|---|---|---|---|---|---|
| Q2'16 | Q1'16 | Change | Q2'15 | Change | 30.06.16 | 30.06.15 | Change |
| 342 | 411 | -17 % | 376 | -9 % | 753 | 769 | -2 % |
| 91 | 159 | -43 % | 121 | -25 % | 250 | 255 | -2 % |
| 65 | 134 | -51 % | 95 | -31 % | 199 | 204 | -3 % |
| 36 | 80 | -55 % | 66 | -45 % | 117 | 134 | -13 % |
| 0,78 | 1,73 | -55 % | 1,43 | -45 % | 2,51 | 2,89 | -13 % |
| Q-on-Q | Y-o-Y | 01.01- | 01.01- |
Total income for the Wilh. Wilhelmsen Holding ASA group (WWH) was USD 342 million in the second quarter of 2016. This was a reduction from the previous quarter which included a non-recurring gain related to WWASA logistics investments. When adjusting for this nonrecurring gain, income was up 3% for the quarter.
Wilh. Wilhelmsen ASA's (WWASA) shipping volumes improved in the second quarter. Income in Wilhelmsen Maritime Services (WMS) remained subdued, reflecting a generally week shipping and offshore market. Income was up in Holding and Investment, mainly due to improved net result in Hyundai Glovis.
The operating profit for the quarter was USD 65 million. This was an increase of 21% from the previous quarter when adjusting for the non-recurring gain in WWASA impacting first quarter results. The improvement in underlying operating profit was supported by increased WWASA shipping volumes, improved operating margin in WMS and increased contribution from Holding and investments.
Net financials were negative with of USD 19 million in the second quarter. Net interest rate derivatives and net currency were both negative with a loss of USD 8 million, while financial derivatives for bunkers was positive with USD 4 million.
Tax expense was nil in the second quarter.
Minority interests' share of net profit for the quarter was USD 10 million, of which USD 5 million was related to minority shareholders in WWASA and USD 5 million was related to minority shareholders in Treasure ASA.
Profit after tax and minority interests totalled USD 36 million in the second quarter, down from USD 80 million in the first quarter.
Total income for WWH was USD 753 million for the first half of 2016. This was a reduction of 2% when compared with the similar period last year. Adjusting for a non-recurring gain related to WWASA logistics activities in the first half of 2016, income was down 12%. Both WWASA and WMS saw a reduction in operating revenue in the first half, reflecting a weak operating environment.
Operating profit for the first half of the year was USD 199 million, a reduction of 2% compared with the corresponding period last year. Adjusting for non-recurring gains related to WWASA logistics activities, operating profit was down 33%. The reduction reflected lower results within WWASA shipping activities and a reduction in operating income and margin in WMS. Operating profit from Holding and investment activities improved.
Net financials was an expense of USD 36 million in the first half year, impacted by a USD
The WWH group had a net increase in cash and cash equivalents of USD 105 million in the second quarter.
Cash flow from operating activities was USD 152 million, reflecting increased contribution from operations and seasonally high dividend from joint ventures and associates. Cash flow from investing activities was negative with USD 144 million mainly due to WWASA vessel investments. Cash flow from financing activities was positive with USD 97 million, reflecting net debt uptake exceeding interest and dividend paid during the period.
| Cash flow | ||
|---|---|---|
| USD mill. - unless otherwise indicated | Q2'16 | Q1'16 |
| Cash from operations | 97 | 49 |
| Dividend received from joint ventures and | ||
| associates | 55 | 1 |
| Net cash provided by operating activities | 152 | 50 |
| Investments in fixed assets | -139 | -20 |
| Net financial investments | -3 | -14 |
| Sale of assets/ Other | -1 | 13 |
| Net cash flow from investing activities | -144 | -21 |
| Net repayment of debt | 145 | -43 |
| Dividend to shareholders and minorities | -17 | 0 |
| Interest payment/other | -31 | -25 |
| Net cash flow from financing activities | 97 | -67 |
| Net increase in cash and cash equivalents | 105 | -39 |
Cash and cash equivalents for the group amounted to USD 378 million by end of the second quarter of 2016. Total liquid assets including current financial investments amounted to USD 719 million. In addition to this, the main group companies also have undrawn committed drawing rights to cover investments and any short-term cash flow needs, including where relevant back stop for outstanding certificates and bonds with a remaining term of less than 12 months to maturity.
27 million loss on net interest rate derivatives, while net financials related to currency and bunkers contributed positively with combined USD 11 million.
Minority interests' share of profit in the first half year was USD 38 million, mainly related to minority shareholders in WWASA and Treasure ASA.
Net profit after tax and minority interests was USD 117 million in the first half year of 2016.
The WWH group carries out active financial asset management of part of the group's liquidity. The value of the group's investment portfolio remained stable amounting to USD 341 million at the end of the second quarter, with investments in various asset classes including Nordic shares and investment grade bonds. Of this, USD 85 million were in the parent company.
| Liquidity and debt | ||
|---|---|---|
| USD mill. - unless otherwise indicated | 30.06.16 | 31.12.15 |
| Cash and cash equivalent | 378 | 273 |
| - Wilh. Wilhelmsen ASA | 150 | 87 |
| - Wilhelmsen Maritime Services | 162 | 170 |
| - Holding & Investments | 66 | 17 |
| - Eliminations | 0 | 0 |
| Current financial investments | 341 | 339 |
| - Wilh. Wilhelmsen ASA | 256 | 251 |
| - Wilhelmsen Maritime Services | 0 | 0 |
| - Holding & Investments | 85 | 87 |
| - Eliminations | 0 | 0 |
| Interest bearing debt | 1 779 | 1 637 |
| - Wilh. Wilhelmsen ASA | 1 425 | 1 299 |
| - Wilhelmsen Maritime Services | 319 | 289 |
| - Holding & Investments | 35 | 48 |
| - Eliminations | 0 | 0 |
The group funds its investments and operations from several capital sources, including the commercial bank loan market, financial leases, export financing and the Norwegian bond market. Business activities are primarily financed over the balance sheet of the relevant subsidiary or joint venture.
As of 30 June 2016 the group's total interestbearing debt amounted to USD 1 779 million, of which USD 35 million was related to Holding and Investments, USD 319 million related to the WMS group and USD 1 425 million related to the WWASA group.
The main risks as considered by the Board of Directors at that time are described in the 2015 Annual Report. 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.
The baseline projection for global growth in 2016 has been subject a modest downward revision. The recovery is projected to strengthen in 2017 and beyond, driven primarily by emerging market and developing economies, as conditions in stressed economies start gradually to normalize. But uncertainty has increased, and risks of weaker growth scenarios are becoming more tangible (source IMF). Since hitting a low point earlier this year, most commodity prices have recovered some, but remains at a low level.
Political and social unrest continued in many counties also in the first half of 2016, but with no major change in impact on group operation.
While currency markets have remained fairly volatile also in the first half of 2016, the general appreciation of the USD against most currencies has levelled off. Uncertainty remains around a potential future increase in US interest rates.
The share price of Hyundai Glovis (held through Treasure ASA) was down 11% during the first half of 2016. The share prices of WWASA increased up to the Treasure ASA de-merger, but the combined value of the two listed entities have since fallen back to the level seen at the start of 2016 (all measured in local currencies).
The joint venture companies WWL and EUKOR continues to be part of anti-trust investigations in several jurisdictions, of which the EU is among the bigger jurisdictions. The ongoing investigations of WWL and EUKOR are confidential. WWASA is therefore not in a position to comment on the ongoing investigations within remaining jurisdictions. The processes are expected to continue to take time, but further clarifications are expected during 2016 and 2017.
Lysaker, 4 August 2016 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 | 01.04-30.06 2016 |
01.04-30.06 2015 |
YTD 2016 |
YTD 2015 |
Full year 2015 |
|---|---|---|---|---|---|---|
| Operating revenue | 304 | 329 | 606 | 657 | 1 307 | |
| Other income | ||||||
| Share of profits/ (loss) from joint ventures and associates | 36 | 44 | 145 | 81 | (60) | |
| Gain on sale of assets | 2 | 1 | 2 | 2 | 31 | 34 |
| Total income | 342 | 376 | 753 | 769 | 1 281 | |
| Operating expenses | ||||||
| Vessel expenses | (9) | (11) | (19) | (23) | (42) | |
| Charter expenses | (6) | (5) | (12) | (11) | (22) | |
| Inventory cost | (104) | (116) | (214) | (234) | (460) | |
| Employee benefits | 3 | (83) | (86) | (168) | (170) | (331) |
| Other expenses | (48) | (37) | (91) | (76) | (151) | |
| Depreciation and impairments | 4 | (26) | (26) | (52) | (51) | (154) |
| Total operating expenses | (277) | (282) | (554) | (565) | (1 159) | |
| Operating profit | 65 | 95 | 199 | 204 | 122 | |
| Financial income/(expenses) | 5 | (19) | (2) | (36) | (26) | (86) |
| Profit before tax | 46 | 92 | 163 | 178 | 36 | |
| Tax income/(expense) | 6 | (0) | (6) | (8) | (8) | 19 |
| Profit for the period | 46 | 86 | 155 | 169 | 55 | |
| Attributable to: minority interests | 10 | 19 | 38 | 36 | 1 | |
| owners of the parent | 36 | 66 | 117 | 134 | 54 | |
| Basic earnings per share (USD) | 7 | 0,78 | 1,43 | 2,51 | 2,89 | 1,16 |
Joint ventures based on equity method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Profit for the period | 46 | 86 | 155 | 169 | 55 |
| Items that will be reclassified to income statement | |||||
| Net investment hedge/cash flow hedges (net after tax) | 6 | 0 | 8 | 0 | (8) |
| Revaluation market to market value | (10) | (30) | (10) | (1) | (1) |
| Currency translation differences 5 |
(15) | 30 | 35 | (46) | (131) |
| Items that will not be reclassified to income statement | |||||
| Remeasurement postemployment benefits, net of tax | 0 | (0) | (1) | 5 | |
| Other comprehensive income, net of tax | (18) | 0 | 33 | (49) | (134) |
| Total comprehensive income for the period | 28 | 86 | 188 | 120 | (80) |
| Total comprehensive income attributable to: | |||||
| Owners of the parent | 16 | 65 | 147 | 86 | (77) |
| Minority interests | 12 | 21 | 41 | 35 | (3) |
| Total comprehensive income for the period | 28 | 86 | 188 | 120 | (80) |
The above consolidated income statement should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | Note | 30.06.2016 | 30.06.2015 | 31.12.2015 |
|---|---|---|---|---|
| Non current assets | ||||
| Deferred tax asset | 6 | 100 | 49 | 92 |
| Goodwill and other intangible assets | 4 | 212 | 267 | 205 |
| Vessels, property and other tangible assets | 4 | 2 107 | 2 040 | 2 011 |
| Investments in joint ventures and associates | 1 219 | 1 289 | 1 116 | |
| Other non current assets | 8 | 150 | 141 | 141 |
| Total non current assets | 3 787 | 3 786 | 3 566 | |
| Current assets | ||||
| Inventory | 116 | 108 | 107 | |
| Current financial investments | 341 | 337 | 327 | |
| Other current assets | 366 | 359 | 375 | |
| Cash and cash equivalents | 378 | 386 | 311 | |
| Total current assets | 1 201 | 1 189 | 1 120 | |
| Total assets | 4 989 | 4 975 | 4 686 | |
| Equity | ||||
| Paid-in capital | 7 | 122 | 122 | 122 |
| Retained earnings | 7/9 | 1 763 | 1 806 | 1 632 |
| Attributable to equity holders of the parent | 1 885 | 1 928 | 1 754 | |
| Minority interests | 492 | 494 | 452 | |
| Total equity | 2 377 | 2 422 | 2 206 | |
| Non current liabilities | ||||
| Pension liabilities | 69 | 87 | 67 | |
| Deferred tax | 6 | 17 | 17 | 20 |
| Non current interest-bearing debt | 10 | 1 599 | 1 618 | 1 461 |
| Other non current liabilities | 274 | 285 | 291 | |
| Total non current liabilities | 1 959 | 2 007 | 1 839 | |
| Current liabilities | ||||
| Current income tax | 9 | 6 | 8 | |
| Public duties payable | 8 | 9 | 9 | |
| Current interest-bearing debt | 10 | 180 | 128 | 199 |
| Other current liabilities | 456 | 403 | 425 | |
| Total current liabilities | 653 | 545 | 640 | |
| Total equity and liabilities | 4 989 | 4 975 | 4 686 |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | 01.04-30.06 | 01.04-30.06 | Full year | |
|---|---|---|---|---|
| Note | 2016 | 2015 | 2015 | |
| Cash flow from operating activities | ||||
| Profit before tax | 46 | 92 | 36 | |
| Financial (income)/expenses | 0 | (9) | 58 | |
| Financial derivatives unrealised | 13 | 2 | 24 | |
| Depreciation/impairment | 4 | 26 | 26 | 154 |
| Loss/ (gain) on sale of fixed assets | 4 | (2) | (2) | (6) |
| (Gain)/loss from sale off subsidiaries, joint ventures and associates | 2 | 0 | (0) | (28) |
| Change in net pension asset/liability | (1) | 1 | (22) | |
| Change in inventory | (1) | (4) | 2 | |
| Change in working capital | 57 | (4) | (48) | |
| Share of profit from joint ventures and associates | (36) | (44) | 60 | |
| Dividend received from joint ventures and associates | 55 | 36 | 47 | |
| Tax paid (company income tax, withholding tax) | (5) | (3) | (19) | |
| Net cash provided by operating activities | 152 | 92 | 258 | |
| Cash flow from investing activities | ||||
| Proceeds from sale of fixed assets | 4 | 5 | 0 | 16 |
| Investments in fixed assets | 4 | (139) | (84) | (212) |
| Net proceeds from sale of subsidiaries | 0 | 0 | 2 | |
| Net proceeds from sale of joint ventures and associates | 2 | 0 | (1) | 41 |
| Loans granted to joint ventures and associates | (8) | 0 | 0 | |
| Proceeds from sale of financial investments | 41 | 39 | 139 | |
| Current financial investments | (44) | (47) | (174) | |
| Interest received | 1 | 1 | 4 | |
| Changes in other investments | 1 | 0 | (3) | |
| Net cash flow from investing activities | (144) | (93) | (187) | |
| Cash flow from financing activities | ||||
| Proceeds from issue of debt | 190 | 64 | 227 | |
| Repayment of debt | (45) | (26) | (207) | |
| Interest paid including interest derivatives | (16) | (19) | (87) | |
| Cash from financial derivatives | (15) | (5) | (13) | |
| Dividend to shareholders/purchase of own shares | (17) | (27) | (43) | |
| Net cash flow from financing activities | 97 | (14) | (123) | |
| Net increase in cash and cash equivalents 1 | 105 | (14) | (53) | |
| Cash and cash equivalents at the beg. of the period 1 | 273 | 400 | 364 | |
| Cash and cash equivalents at the end of the period 1 | 378 | 386 | 312 | |
1 Excluding restricted cash.
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.
Joint ventures based on equity method
| USD mill | Share capital | Retained earnings |
Total | Minority interests |
Total equity |
|---|---|---|---|---|---|
| Balance at 31.12.2015 | 122 | 1 632 | 1 754 | 452 | 2 206 |
| Profit for the period | 117 | 117 | 38 | 155 | |
| Comprehensive income | 31 | 31 | 2 | 33 | |
| Paid dividends to shareholders | (16) | (16) | (1) | (17) | |
| Balance 30.06.2016 | 122 | 1 763 | 1 885 | 492 | 2 377 |
| Balance at 31.12.2014 | 122 | 1 738 | 1 861 | 469 | 2 329 |
| Profit for the period | 134 | 134 | 35 | 169 | |
| Comprehensive income | (48) | (48) | (1) | (49) | |
| Paid dividends to shareholders | (18) | (18) | (9) | (27) | |
| Balance 30.06.2015 | 122 | 1 806 | 1 928 | 494 | 2 422 |
| Retained | Minority | ||||
|---|---|---|---|---|---|
| USD mill | Share capital | earnings | Total | interests | Total equity |
| Balance at 31.12.2014 | 122 | 1 738 | 1 861 | 469 | 2 329 |
| Profit for the period | 54 | 54 | 1 | 55 | |
| Comprehensive income | (131) | (131) | (3) | (135) | |
| Paid dividends to shareholders | (29) | (29) | (15) | (44) | |
| Balance 31.12.2015 | 122 | 1 632 | 1 754 | 452 | 2 206 |
The above consolidated statement of statement of changes in equity should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
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 2015 for Wilh.Wilhelmsen Holding ASA group (WWI), which has been prepared in accordance with IFRS's endorsed by the EU.
Treasure ASA was demerger from WWASA and the company was listed at 8 June 2016. Treasure ASA hold 12.04% ownership in the listed company Hyundai Glovis. Treasure ASA group is a part of Holding & Investment segment. See separate note for restated figures.
WWL has acquired the full ownership of WWL Vehicle Services Americas (VSA), previously a joint venture, based in USA. The company employs 3 400 employees and handles some 4.7 million units annually.
With full ownership, WWL strengthens its position as a leading provider of vehicle processing for automotive manufacturers in North America.
Second quarter
There has not been any significant acquisitions or disposals during the second quarter.
Up to 31 December 2014 WWH ASA and WWASA had two pension schemes for employees in Norway; a defined benefit scheme and a defined contribution scheme. Effective 1 January 2015 most of the Norwegians legal entities entered
The accounting policies implemented are consistent with those of the annual financial statements for WWI for the year end 31 December 2015.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
WWL has also acquired the full ownership of CAT-WWL, previously a joint venture, based in South Africa.
With full ownership in CAT-WWL, a network of ten vehicle-processing facilities, WWL becomes one of the top independent providers of vehicle processing services to support automotive manufacturers in South Africa. The business employs more than 900 workers and handles some 680 000 units.
In addition, WWL has sold Vehicle Services Europe (VSE) to Groupe CAT. The company employs some 400 employees with truck based inland distribution in Europe and three vehicle processing centres in Germany.
In the first quarter of 2015, WWASA sold 187 500 shares in Hyundai Glovis with net proceeds of approximately USD 39 million. The net gain recorded in the 2015 group's accounts amounted to USD 26 million.
into a defined contribution pension scheme with improved saving rates. In 2015 the subsidary Wilhelmsen Chemical terminated the defined benefit scheme and implemented the same pension plan as the rest of the Norwegian part of the
| Employee benefits (excluding pension cost) | (305) |
|---|---|
| Pension cost | (30) |
| Gain related to termination of defined benefit plan | 4 |
| Employee benefits income statement | (331) |
| Pension cost | (30) |
| Gain related to termination of defined benefit plan | 4 |
| Other comprehensive income pension before tax | 7 |
| Net equity effect of pension cost before tax (parent and subsidaries) | (19) |
| Holding & | Total WWH |
| USD mill | WWASA group | WMS group | Investments | Eliminations | group |
|---|---|---|---|---|---|
| 31.12 | 31.12 | 31.12 | 31.12 | 31.12 | |
| One off pension | 2015 | 2015 | 2015 | 2015 | 2015 |
| Operating profit before one off pension | 60 | 65 | (4) | 0 | 122 |
| Gain: termination of defined benefit plan for Norwegian employees | |||||
| (included in employees benefit) | 4 | 4 | |||
| Total one off pension | - | 4 | - | 0 | 4 |
| Operating profit after one off pension | 60 | 61 | (4) | 0 | 118 |
Joint ventures based on equity method
| USD mill | Vessels / Newbuilding contracts |
Other tangible assets |
Intangible assets |
Total tangible and intangible assets |
|---|---|---|---|---|
| 2016 | ||||
| Cost price 1.1 | 2 472 | 307 | 325 | 3 105 |
| Acquisition | 142 | 10 | 5 | 157 |
| Reclass/disposal | (160) | (7) | 0 | (166) |
| Currency translation differences | 0 | 12 | 10 | 22 |
| Cost price 30.06 | 2 455 | 322 | 341 | 3 118 |
| Accumulated depreciation and impairment losses 1.1 | (646) | (122) | (121) | (889) |
| Depreciation/amortisation | (40) | (7) | (5) | (52) |
| Reclass/disposal | 143 | 5 | (1) | 147 |
| Currency translation differences | 0 | (4) | (2) | (6) |
| Accumulated depreciation and impairment losses 30.06 | (542) | (128) | (129) | (799) |
| Carrying amounts 30.06 | 1 913 | 194 | 212 | 2 319 |
| 2015 | ||||
| Cost price 1.1 | 2 400 | 307 | 353 | 3 059 |
| Acquisition | 141 | 14 | 156 | 310 |
| Reclass/disposal | (79) | (7) | (152) | (237) |
| Currency translation differences | 0 | (11) | (15) | (27) |
| Cost price 30.06 | 2 462 | 302 | 341 | 3 105 |
| Accumulated depreciation and impairment losses 1.1 | (640) | (116) | (76) | (833) |
| Depreciation/amortisation | (40) | (7) | (4) | (51) |
| Reclass/disposal | 72 | 4 | 2 | 78 |
| Currency translation differences | 0 | 5 | 3 | 8 |
| Accumulated depreciation and impairment losses 30.06 | (608) | (115) | (75) | (798) |
| Carrying amounts 30.06 | 1 853 | 187 | 267 | 2 307 |
| 2015 | ||||
| Cost price 1.1 | 2 400 | 307 | 353 | 3 059 |
| Acquisition | 154 | 39 | 168 | 362 |
| Reclass/disposal | (81) | (7) | (154) | (242) |
| Currency translation differences | 0 | (32) | (42) | (74) |
| Cost price 31.12 | 2 472 | 307 | 325 | 3 105 |
| Accumulated depreciation and impairment losses 1.1 | (640) | (116) | (76) | (833) |
| Depreciation/amortisation | (80) | (14) | (7) | (102) |
| Reclass/disposal | 75 | (3) | 4 | 76 |
| Impairment | 0 | (2) | (50) | (52) |
| Currency translation differences | 0 | 13 | 9 | 22 |
| Accumulated depreciation and impairment losses 31.12 | (646) | (122) | (121) | (889) |
| Carrying amounts 31.12 | 1 827 | 185 | 205 | 2 216 |
Joint ventures based on equity method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year | |
|---|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | ||
| Financial items | ||||||
| Investment management | 3,0 | (1,8) | 1,8 | 11,5 | 5,2 | |
| Interest income | 0,8 | 0,9 | 1,8 | 2,2 | 4,4 | |
| Other financial items | 2,9 | 0,6 | 1,9 | (1,3) | (9,0) | |
| Net financial items | 6,7 | (0,4) | 5,5 | 12,3 | 0,6 | |
| Financial - interest expenses | ||||||
| Interest expenses | (13,6) | (11,4) | (25,9) | (24,0) | (47,4) | |
| Interest rate derivatives - realised | (7,8) | (9,3) | (14,8) | (15,8) | (31,5) | |
| Net financial - interest expenses | (21,3) | (20,7) | (40,7) | (39,7) | (78,9) | |
| Interest rate derivatives - unrealised | (0,3) | 17,7 | (11,8) | 20,0 | 23,6 | |
| Financial currency | ||||||
| Net currency gain/(loss) | (5,5) | (21,1) | (12,3) | (8,7) | 36,2 | |
| Currency derivatives - realised | (13,5) | (5,4) | (13,2) | (0,5) | (1,8) | |
| Currency derivatives - unrealised | 13,3 | 15,5 | 21,5 | (1,4) | (26,2) | |
| Cross currency derivatives - realised | (0,5) | (0,0) | (1,0) | 0,0 | (11,5) | |
| Cross currency derivatives - unrealised | (2,2) | 11,1 | 11,0 | (10,0) | (21,4) | |
| Net financial currency | (8,3) | 0,1 | 6,0 | (20,6) | (24,9) | |
| Financial derivatives bunkers | ||||||
| Valuation of bunker hedges | 5,1 | 0,9 | 6,5 | 1,7 | (6,3) | |
| Realised portion bunker hedges | (0,8) | (1,5) | ||||
| Net financial derivatives bunkers | 4,3 | 0,9 | 5,1 | 1,7 | (6,3) | |
| Financial income/(expenses) | (18,9) | (2,3) | (35,9) | (26,4) | (85,9) | |
| Total net currencies effect | ||||||
| Net currency gain/(loss) - Operating currency | 3,3 | (14,5) | 5,2 | 3,6 | 28,0 | |
| Net currency gain/(loss) - Financial currency | (8,7) | (6,6) | (17,6) | (12,3) | 8,1 | |
| Currency derivatives - realised | (13,5) | (5,4) | (13,2) | (0,5) | (1,8) | |
| Currency derivatives - unrealised | 13,3 | 15,5 | 21,5 | (0,0) | (26,2) | |
| Cross currency derivatives - realised | (0,5) | (0,1) | (1,0) | 0,0 | (11,5) | |
| Cross currency derivatives - unrealised | (2,2) | 11,1 | 11,0 | (10,0) | (21,4) | |
| Net financial currency | (8,3) | 0,1 | 6,0 | (19,2) | (24,9) | |
| Currency translation differences through other | ||||||
| comprehensive income | (14,7) | 30,1 | 34,7 | (46,3) | (130,8) | |
| Total net currency effect | (23,0) | 30,2 | 40,6 | (65,5) | (155,7) |
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 and tax exempt revenues from tonnage tax regimes.
Joint ventures based on equity method
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 |
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.
Earnings per share is calculated based on 46 403 824 shares for 2015, first quarter 2016 and second quarter 2016.
| USD mill | 30.06.2016 | 30.06.2015 | 31.12.2015 |
|---|---|---|---|
| Available-for-sale financial assets | |||
| At 1 January | 122 | 131 | 131 |
| Acquistion | 12 | - | 6 |
| Sale during the year | (7) | ||
| Mark to market valuation | (7) | (4) | (1) |
| Currency translation adjustment | 2 | (7) | (14) |
| Total available-for-sale financial assets | 122 | 120 | 122 |
Available-for-sale financial assets are denominated in Australian Dollar 30 June 2016 (30 June 2015).
Dividend for fiscal year 2014 was NOK 5.00 per share, where 3.00 per share was paid in May 2015 and NOK 2.00 per share was paid in November 2015.
The proposed dividend for fiscal year 2015 in 2016 is NOK 3.00 per share, was
approved by the annual general meeting on 3 May 2016, and paid to the the shareholders in May 2016.
Joint ventures based on equity method
| USD mill | 30.06.2016 | 30.06.2015 | 31.12.2015 |
|---|---|---|---|
| Non current interest-bearing debt | 1 599 | 1 618 | 1 461 |
| Current interest-bearing debt | 180 | 128 | 199 |
| Total interest-bearing debt | 1 779 | 1 746 | 1 660 |
| Cash and cash equivalents | 378 | 386 | 311 |
| Current financial investments | 341 | 337 | 327 |
| Net interest-bearing debt | 1 060 | 1 023 | 1 022 |
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 2016 (analogous for 30 June 2015).
Net interest-bearing debt in joint ventures (the group's share part of investments)
| USD mill | 30.06.2016 | 30.06.2015 | 31.12.2015 |
|---|---|---|---|
| Non current interest-bearing debt | 725 | 659 | 640 |
| Current interest-bearing debt | 64 | 79 | 69 |
| Total interest-bearing debt | 789 | 737 | 708 |
| Cash and cash equivalents | 215 | 263 | 262 |
| Net interest-bearing debt | 574 | 475 | 446 |
| USD mill | 30.06.2016 | 30.06.2015 | 31.12.2015 |
|---|---|---|---|
| Interest-bearing debt | |||
| Mortgages | 997 | 1 007 | 1 049 |
| Leasing commitments | 158 | 82 | 0 |
| Bonds | 270 | 304 | 270 |
| Bank loan | 354 | 353 | 341 |
| Total interest-bearing debt | 1 779 | 1 746 | 1 660 |
| Repayment schedule for interest-bearing debt | |||
| Due in 2016 | 125 | 65 | 199 |
| Due in 2017 | 147 | 189 | 105 |
| Due in 2018 | 290 | 123 | 302 |
| Due in 2019 | 668 | 286 | 641 |
| Due in 2020 and later | 549 | 1 082 | 414 |
| Total interest-bearing debt | 1 779 | 1 746 | 1 660 |
Joint ventures based on equity method
| USD mill | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| 2016 | ||||
| Financial assets at fair value | ||||
| Equities | 110 | 110 | ||
| Bonds | 230 | 0 | 230 | |
| Available-for-sale financial assets | 115 | 6 | 122 | |
| Total financial assets 30.06 | 455 | 0 | 6 | 462 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 219 | 219 | ||
| Total financial liabilities 30.06 | 0 | 219 | 0 | 219 |
| 2015 | ||||
| Financial assets at fair value | ||||
| Equities | 127 | 127 | ||
| Bonds | 210 | 210 | ||
| Financial derivatives | 8 | 8 | ||
| Available-for-sale financial assets | 120 | 120 | ||
| Total financial assets 30.06 | 456 | 8 | 0 | 464 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 272 | 272 | ||
| Total financial liabilities 30.06 | 0 | 272 | 0 | 272 |
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:
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 2016 are liquid investment grade bonds (analogous for 2015).
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.
Joint ventures based on equity method
| USD mill | WWASA group | WMS group | Holding & Investments | 2 | Eliminations | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
Q2 2016 |
Q2 2015 |
Full year 2015 |
| Operating revenue | 65 | 79 | 313 | 233 | 252 | 998 | 12 | 6 | 21 | (6) | (7) | (25) | 304 | 329 | 1 307 |
| Other income Share of profits from joint ventures and associates |
16 | 26 | (108) | 1 | 0 | 5 | 20 | 18 | 43 | 0 | 0 | 0 | 36 | 44 | (60) |
| Gain on sale of assets | (0) | 0 | 27 | 1 | 2 | 7 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 2 | 34 |
| Total income | 81 | 105 | 231 | 235 | 254 | 1 010 | 32 | 23 | 64 | (6) | (7) | (25) | 342 | 376 | 1 281 |
| Primary operating profit Depreciation and impairments |
51 (20) |
72 (21) |
104 (80) |
23 (6) |
33 (5) |
138 (73) |
18 (0) |
16 (0) |
33 (1) |
0 0 |
(0) 0 |
(0) 0 |
91 (26) |
121 (26) |
275 (154) |
| Operating profit 1 | 31 | 51 | 24 | 17 | 28 | 65 | 17 | 16 | 32 | 0 | (0) | (0) | 65 | 95 | 122 |
| Financial income/(expenses) |
(15) | 9 | (98) | (7) | (13) | 3 | 3 | 1 | 9 | 0 | 0 | 0 | (19) | (2) | (86) |
| Profit/(loss) before tax | 16 | 61 | (73) | 10 | 15 | 69 | 20 | 16 | 41 | 0 | (0) | (0) | 46 | 92 | 36 |
| Tax income/(expense) | 1 | (4) | 33 | (3) | (4) | (16) | 1 | 2 | 2 | 0 | 0 | 0 | (0) | (6) | 19 |
| Profit/(loss) | 17 | 57 | (40) | 8 | 11 | 52 | 21 | 18 | 42 | 0 | (0) | (0) | 46 | 86 | 55 |
| Minority interests | 5 | 15 | (11) | 0 | 0 | 2 | 5 | 4 | 10 | 0 | 0 | 0 | 10 | 19 | 1 |
| Profit/(loss) to the owners of parent |
12 | 41 | (29) | 7 | 11 | 50 | 16 | 15 | 33 | 0 | (0) | (0) | 36 | 66 | 54 |
1 Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses
2 Holding and Investments includes Wilh.Wilhelmsen Holding ASA, Wilh.Wilhelmsen Holding Invest group and minor activities which fail to meet the definition for other segments.
Joint ventures based on equity method
| Holding & | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group | WMS group | Investments | Eliminations | Total | |||||
| Year to date | 30.06 2016 |
31.12 2015 |
30.06 2016 |
31.12 2015 |
30.06 2016 |
31.12 2015 |
30.06 2016 |
31.12 2015 |
30.06 2016 |
31.12 2015 |
| Assets | ||||||||||
| Deferred tax asset | 77 | 67 | 21 | 22 | 2 | 3 | 0 | 0 | 100 | 92 |
| Intangible assets | 6 | 6 | 206 | 199 | 1 | 0 | 0 | 0 | 212 | 205 |
| Tangible assets | 1 913 | 1 827 | 191 | 182 | 2 | 2 | 0 | 0 | 2 107 | 2 011 |
| Investments in joint ventures and associates | 761 | 689 | 15 | 15 | 442 | 412 | 0 | 0 | 1 219 | 1 116 |
| Other non current assets | 1 | 1 | 10 | 9 | 139 | 131 | 0 | 0 | 150 | 141 |
| Current financial investments | 256 | 242 | 0 | 0 | 85 | 85 | 0 | 0 | 341 | 327 |
| Other current assets | 21 | 24 | 458 | 455 | 6 | 6 | (2) | (3) | 482 | 482 |
| Cash and cash equivalents | 150 | 108 | 162 | 181 | 66 | 22 | 0 | 0 | 378 | 311 |
| Total assets | 3 186 | 2 963 | 1 063 | 1 063 | 742 | 663 | (2) | (3) | 4 989 | 4 686 |
| Equity and liabilities | ||||||||||
| Equity majority | 1 142 | 959 | 253 | 273 | 490 | 522 | 0 | 0 | 1 885 | 1 754 |
| Equity minority interests | 288 | 359 | (0) | 0 | 204 | 92 | 492 | 452 | ||
| Deferred tax | 0 | 1 | 17 | 20 | 0 | 0 | 0 | 0 | 17 | 20 |
| Interest-bearing debt | 1 425 | 1 319 | 319 | 307 | 35 | 34 | 0 | 0 | 1 779 | 1 660 |
| Other non current liabilities | 211 | 225 | 125 | 126 | 7 | 7 | 0 | 0 | 343 | 358 |
| Other current liabilities | 120 | 100 | 349 | 336 | 6 | 7 | (2) | (3) | 473 | 441 |
| Total equity and liabilities | 3 186 | 2 963 | 1 063 | 1 063 | 742 | 663 | (2) | (3) | 4 989 | 4 686 |
Joint ventures based on equity method
| USD mill | WWASA group | WMS group | Holding & Investments | ||||
|---|---|---|---|---|---|---|---|
| Quarter | Q2 2016 | Q2 2015 | Q2 2016 | Q2 2015 | Q2 2016 | Q2 2015 | |
| Profit before tax | 16 | 61 | 10 | 15 | 20 | 16 | |
| Net financial (income)/expenses | 15 | (9) | 10 | 11 | (3) | 2 | |
| Depreciation/impairment | 20 | 21 | 6 | 5 | 0 | - | |
| Change in working capital | 29 | 3 | 7 | (27) | 6 | (10) | |
| Share of profit from joint ventures and associates | (15) | (26) | (1) | (0) | (20) | (18) | |
| Dividend received from joint ventures and associates | 53 | 24 | 2 | 3 | - | 9 | |
| Net cash provided by operating activities | 117 | 73 | 35 | 7 | 3 | (1) | |
| Net sale/(investments) in fixed assets | (130) | (73) | (9) | (9) | - | - | |
| Net sale/(investments) in entities and segments | - | 0 | (0) | - | (8) | - | |
| Current financial investments | (8) | (11) | 1 | 1 | 7 | 4 | |
| Net changes in other investments | 0 | 1 | - | - | - | ||
| Net cash flow from investing activities | (138) | (84) | (8) | (9) | (2) | 4 | |
| , | |||||||
| Net change of debt | 129 | 38 | 30 | - | (13) | - | |
| Net change in other financial items | (27) | (16) | (5) | (2) | - | (1) | |
| Net dividend from other segments/ to shareholders | (17) | (28) | (59) | (39) | 61 | 41 | |
| Net cash flow from financing activities | 84 | (5) | (34) | (41) | 48 | 40 | |
| Net increase in cash and cash equivalents | 63 | (16) | (7) | (42) | 49 | 43 | |
| Cash and cash equivalents at the beg.of the period | 87 | 176 | 169 | 198 | 17 | 26 | |
| Cash and cash equivalents at the end of period | 150 | 160 | 162 | 156 | 66 | 70 |
Joint ventures based on equity method
WWH delivers services to the WWASA group. These include primarily human resources, tax, communication, treasury and legal services ("Shared Services") 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.
In addition, WWASA group and WMS group have several transactions with associates. The contracts governing such transactions are based on commercial market terms and mainly relate to the chartering of vessels on short and long term charters.
The demerger of Den Norske Amerikalinje AS (owning the 12% shareholding in Hyundai Glovis) from WWASA was effective on 8th June 2016.
The demerged entity named Treasure ASA was listed on the Oslo Stock Exchange on 8th June and is part of the Holding & Investment segment.
The joint venture companies Wallenius Wilhelmsen Logistics (WWL) and EUKOR continues to be part of anti-trust investigations in several jurisdictions, of which the EU is among the bigger jurisdictions.
WWL reached a settlement with the US Department of Justice (DOJ) in July, agreeing to pay a fine of USD 98.9 million (USD 49.5 million for the WW group account). The group made a provision for the outcome of the
No material events occured between the balance sheet date and the date when the accounts were presented providing new information about conditions prevailing on the balance sheet date.
investigation in the third quarter of 2015. Consequently, the fine will not have a profit and loss effect for the group in 2016.
The ongoing investigations are confidential, hence the group is not in a position to comment on the ongoing investigations within remaining jurisdictions. The processes are expected to continue to take time, but further clarifications within some jurisdictions are expected during 2016 and 2017.
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2016 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, 4 August 2016 The board of directors of Wilh. Wilhelmsen Holding ASA
Chair
Diderik Schnitler Helen Juell Odd Rune Austgulen Irene Waage Basili Carl E. Steen
Thomas Wilhelmsen Group CEO
Wilh. Wilhelmsen Holding ASA PO Box 33 NO-1324 Lysaker, NORWAY Tel: +47 67 58 40 00 Email: [email protected] http://www.wilhelmsen.com/
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