Quarterly Report • Aug 6, 2015
Quarterly Report
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SECOND QUARTER AND FIRST HALF 2015 (JOINT VENTURES BASED ON PROPORTIONATE METHOD)
| USD mill | Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | |||
|---|---|---|---|---|---|---|---|---|
| - unless otherwise indicated | Q2'15 | Q1'15 | Change | Q2'14 | Change | 30.06.15 | 30.06.14 | Change |
| Total income | 854 | 866 | -1 % | 965 | -11 % | 1 720 | 1 879 | -8 % |
| - Wilh. Wilhelmsen ASA | 596 | 609 | -2 % | 682 | -12 % | 1 205 | 1 318 | -9 % |
| - Wilhelmsen Maritime Services | 254 | 257 | -1 % | 281 | -10 % | 511 | 559 | -8 % |
| - Holding & Investments | 1 0 |
6 | 1 0 |
16 | 18 | |||
| - Eliminations | -7 | -6 | -8 | -13 | -17 | |||
| EBITDA | 148 | 166 | -11 % | 125 | 18 % | 314 | 245 | 28 % |
| - Wilh. Wilhelmsen ASA | 113 | 136 | -17 % | 9 5 |
19 % | 249 | 185 | 34 % |
| - Wilhelmsen Maritime Services | 3 3 |
3 2 |
4 % | 3 0 |
11 % | 65 | 61 | 7 % |
| - Holding & Investments | 2 | -2 | 1 | 0 | -1 | |||
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| Operating profit/EBIT | 103 | 123 | -16 % | 80 | 29 % | 225 | 156 | 44 % |
| - Wilh. Wilhelmsen ASA | 7 3 |
9 8 |
-25 % | 5 7 |
29 % | 171 | 111 | 55 % |
| - Wilhelmsen Maritime Services | 2 8 |
2 7 |
4 % | 2 3 |
23 % | 55 | 47 | 16 % |
| - Holding & Investments | 2 | -2 | 0 | 0 | -2 | |||
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| Financial income/(expenses) | -8 | -35 | -40 | -42 | -56 | |||
| Tax income/(expenses) | -9 | -4 | -2 | -13 | -12 | |||
| Minority interests | 2 0 |
1 6 |
8 | 36 | 18 | |||
| Profit/(loss) after minority | 66 | 68 | -2 % | 30 | >100% | 134 | 69 | 93 % |
| - Wilh. Wilhelmsen ASA | 5 1 |
4 1 |
25 % | 1 8 |
>100% | 92 | 41 | >100% |
| - Wilhelmsen Maritime Services | 1 1 |
2 5 |
-57 % | 6 | 72 % | 35 | 21 | 68 % |
| - Holding & Investments | 5 | 2 | 6 | 7 | 7 | |||
| - Eliminations | 0 | 0 | 0 | 0 | 0 | |||
| EPS (USD) | 1,43 | 1,46 | -2 % | 0,65 | >100% | 2,89 | 1,49 | 94 % |
Wilh. Wilhelmsen Holding group:
Wilh. Wilhelmsen ASA:
Wilhelmsen Maritime Services AS:
Holding and investments:
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.
The same accounting principles are applied in both the management reports and the financial accounts, and comply with the International Financial Reporting Standards (IFRS).
Total income for the Wilh. Wilhelmsen Holding ASA group (WWH) was relatively flat at USD 854 million for the second quarter of 2015, mainly influenced by a slight reduction in income from both Wilh. Wilhelmsen ASA's (WWASA) and Wilhelmsen Marine Services (WMS). The first quarter included a non-recurring gain (income) of USD 26 million from WWASA's share reduction in Hyundai Glovis.
The operating profit for the second quarter was down compared with first quarter of 2015, amounting to USD 103 million. The first quarter included a non-recurring gain related to WWASA's share reduction in Hyundai Glovis. When excluding the sales gain the operating profit for WWH increased by 7% compared with the first quarter. A slight increase in WWASA and continued strong result from WMS, coupled with a seasonal uplift in NorSea drove the development.
Net financials was an expense of USD 8 million in the second quarter, mainly impacted by a USD 9 million gain on net interest rate derivatives. Contribution from investment management and net financial currency was a loss of USD 2 million and USD 3 million respectively.
Tax was included with an expense of USD 9 million.
Minority interests' share of profit in the second quarter was USD 20 million, of which USD 19 million was related to minority shareholders in WWASA.
Profit after minority interests was almost flat at USD 66 million in the second 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).
| Key figures - Wilh. Wilhelmsen ASA | |||||
|---|---|---|---|---|---|
| USD mill | Q-on-Q | Y-o-Y | |||
| - unless otherwise indicated | Q2'15 | Q1'15 | Change | Q2'14 | Change |
| Total income | 596 | 609 | -2 % | 682 | -12 % |
| - Shipping | 470 | 460 | 2 % | 539 | -13 % |
| - Logistics | 134 | 155 | -14 % | 147 | -9 % |
| - Holding/eliminations | -7 | -6 | -5 | ||
| EBITDA | 113 | 136 | -17 % | 95 | 19 % |
| - EBITDA margin (%) | 18,9 % | 22,3 % | 13,9 % | ||
| Operating profit/EBIT | 73 | 98 | -25 % | 57 | 29 % |
| - EBIT margin (%) | 12,3 % | 16,1 % | 8,3 % | ||
| - Financial income/(expense) | 4 | -46 | -31 | ||
| - Tax income/(expense) | -7 | 5 | 0 | ||
| Profit/(loss) | 70 | 57 | 26 | ||
| - Profit margin (%) | 11,8 % | 9,3 % | 3,8 % | ||
| - Minority interests | 19 | 16 | 8 | ||
| Profit/(loss) after minority | 51 | 41 | 18 |
Total income in WWASA was USD 596 million, down 2% compared with the first quarter. When excluding USD 26 million gain from the previous quarter's share reduction in Hyundai Glovis, the total income improved by 2% reflecting a seasonal increase in ocean transported volumes.
The operating profit declined by 25% to USD 73 million in the second quarter. Exluding the gain from the WWASA share reduction in Hyundai Glovis, the operating profit was in line with the previous quarter, supported by improved contribution from the logictiscs segment.
Net financial income for WWASA was USD 4 million, mainly driven by unrealised gains on interest and currency derivatives. This was partly offset by weaker results from investment management and unrealised net currency revaluation losses.
Net profit after tax was USD 70 million in the second quarter, of which USD 51 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%), American Roll-on-Roll-off Carrier (ARC, owned 50%) and Hyundai Glovis (owned 12.0%), as well as certain shipowning activities outside the operating companies.
WWASA's operating entities transported 19.5 million cubic metres (CBM) in the second quarter, a 6% increase quarter on quarter driven by seasonally higher demand for transportation of cars.
Reduced bunker compensation resulted in lower total income and increased net bunker cost in the second quarter. Combined with higher planned and unplanned off-hire, this had a negative effect on operating profit when comparing the second and the first quarter.
Auto volumes increased in all trades, except Asia to Europe, which came in on par with the first quarter.
The auto trade composition mirrors sales figures. North America and Oceania recorded increased sales, while sales in BRICs declined. India, Brazil, and China recorded the largest percentage drop in sales, while Russian sales figures remained weak. The European auto sales came in on par with the previous quarter.
Asian auto volumes transported on Wallenius Wilhelmsen Logistics' (WWL) vessels kept up with the previous quarter although Japanese volumes were lower. Japanese car export was down 6% compared with the previous quarter which was positively impacted by the end of the Japanese fiscal year.
Export from Korea was up from the first quarter. Korea has seen a flattening of export figures in the last few years, fluctuating around 750 000 unites per quarter (3 million/year), while foreign production of Korean branded cars grew. EUKOR Car Carrier's (EUKOR) share of the total export from Korea to the Americas increased, while export to Europe came in on par with the first quarter.
Auto volumes was also positively impacted by a new ocean contract for privately owned vehicles for American Roll-on Roll-off Carrier (ARC).
Global demand for transportation of high and heavy cargo remained soft. Cargo lifted in the second quarter came in at the same level as the first quarter. With auto volumes increasing more than high and heavy volumes, the group recorded an unfavourable cargo mix given its advanced fleet.
Volumes increased strongly in the Oceania trade, however from a low level in the first quarter impacted by the stinkbug issue. The Atlantic trade recorded a positive development due to seasonality. However, Asia to North America and Asia to Europe experienced a decline.
The demand for construction equipment remained at a relatively healthy level, with a positive sentiment in the European market and improved housing markets in the US. Request for mining equipment continued to be modest due to low commodity prices and few new mining investments, while demand for agriculture machinery saw a declining trend in line with lower crop prices.
At the end of the second quarter, group companies had a lifting capacity of 900 000 CEUs, down 2% quarter on quarter. With a net decrease of three vessels compared with the first quarter, the group controlled 140 vessels by the end of the second quarter equal to a 23% share of the global car carrying capacity.
The group took delivery of one newbuilding during the quarter. The pure-car-and-truck carrier Thalatta commenced service for WWL.
At the end of the second quarter, the newbuilding programme for group companies counted eight vessels (63 300 CEUs) to be delivered in 2016-17. Two of the vessels are for WWASA's account. The group's newbuilding program equalled 14% of the world car carrier order book measured in CEUs.
Several new orders were placed in the quarter and the world orderbook counted 67 vessels (450 000 CEUs) or 11% of the total world fleet measured in CEUs.
Two vessels were redelivered to external owners during the quarter. The group has the flexibility to redeliver six vessels the next 12 months. Two vessels in the global fleet were sold for recycling in the second quarter, of which one was a WWASA group vessel. The pure-car-and-truck carrier Liberty will be demolished at a green recycling facility in China.
WWASA's logistics segment includes logistics activities within Wallenius Wilhelmsen Logistics (WWL, owned 50%), American Shipping and Logistics Group (ASL, owned 50%) and Hyundai Glovis (owned 12.0%).
Improved results in Hyundai Glovis increased contribution from the logistics segment. WWL's activity level was on par with the first quarter, with slightly higher contribution from terminal operations and technical service following somewhat stronger volumes.
Hyundai Glovis Hyundai Glovis is a global integrated logistics company listed on the KRX Korea Exchange. WWASA owns 12.0% of Hyundai Glovis. The investment is reported in WWASA's accounts as "associated company", with share of net result reported as income partly under shipping and partly under logistics one quarter in arrears.
The Hyundai Glovis share price decreased during the second quarter of 2015, and the market value of WWASA's shares in Hyundai Glovis was valued at USD 816 million as of 30 June 2015.
| WWASA | share | price | development | |
|---|---|---|---|---|
| Value of investment: | End | End | ||
| Wilh. Wilhelmsen ASA | Q2'15 | Q1'15 | ||
| WWASA share price (NOK) | 47,20 47,90 | |||
| WWASA shares held by WWH (million) | 160 | 160 | ||
| Value of WWH shareholding (NOK million) | 7 552 7 664 | |||
| Value per WWI/WWIB share (NOK) | 163 | 165 | ||
| Return: Wilh. Wilhelmsen ASA |
Q2'15 | YTD | ||
| Dividend (NOK per share) | 1,00 | 1,00 | ||
| Price return (share price development) | -1 % | 3 % | ||
| Total return (incl. dividend; not reinvested) | 1 % | 5 % | ||
The WWASA share price was down 1% during the second quarter of 2015, reducing the market value of WWH's shares in WWASA to NOK 7 552 million as of 30 June 2015. This represented NOK 163 per outstanding share in WWH (WWI/WWIB).
WWL and EUKOR continue to be part of anti-trust investigations of the car carrying industry in several jurisdictions, of which the EU and US are among the bigger jurisdiction. As some of the processes are confidential, WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are a part of. The company expects further clarification during 2015 and 2016.
30 July, WWL reached a settlement agreement with the Competition Commission in South Africa.
The Commission stated that WWL and other car carriers have allegedly fixed prices, divided markets and tendered collusively in respect of the provision of deep-sea transportation services in the period from 1999 to September 2012.
The Competition Commission, being the investigating authority, referred the settlement to the Competition Tribunal of South Africa to be tried. If the settlement is confirmed, WWL will pay an administrative penalty in the amount of R95 695 529 (approx. USD 7.7 million).
WWL made an accrual for the penalty in fourth quarter 2014. WWASA's 50% share of the fine will therefore not have an accounting effect in 2015.
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.
| Q-on-Q | Y-o-Y | |||
|---|---|---|---|---|
| Q2'15 | Q1'15 | Change | Q2'14 | Change |
| 254 | 257 | -1 % | 281 | -10 % |
| 159 | 167 | -5 % | 174 | -9 % |
| 13 | 14 | -4 % | 14 | -7 % |
| 81 | 75 | 9 % | 87 | -7 % |
| 1 | 3 | 6 | ||
| 33 | 32 | 4 % | 30 | 11 % |
| 13,0 % | 12,4 % | 10,6 % | ||
| 28 | 27 | 4 % | 23 | 23 % |
| 11,0 % | 10,4 % | 8,0 % | ||
| -13 | 7 | -13 | ||
| -4 | -9 | -2 | ||
| 11 | 25 | 7 | ||
| 4,4 % | 9,8 % | 2,5 % | ||
| 0 | 1 | 1 | ||
| 11 | 25 | 6 | ||
| Key figures - Wilhelmsen Maritime Services |
Key figures - Wilhelmsen Maritime Services
Total income for WMS in the second quarter was flat at USD 254 million, influenced by the continued strong USD.
The operating profit in the second quarter continued at a strong level amounting to USD 28 million. The strong USD continued to have a positive impact on the operating profit for the quarter. As a result, the operating margin improved, ending at 11.0% in the second quarter and above the long-term target of 9%.
Financial expense for WMS amounted USD 13 million, mainly due to currency losses. Tax expense was USD 4 million, representing a normal tax rate for the quarter.
The net profit after tax and minority for the quarter was reduced to USD 11 million.
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.
Total income for WSS declined by 5% compared with the previous quarter. Among the business streams, ships agency and safety services reported stable developments, while other streams delivered reduced income.
When measured against the total global merchant fleet1 , WSS generated income of USD 34 per day/vessel in the second quarter, below a three-year average. The favourable exchange rates continued to have a positive impact on operating profit in the quarter.
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.
1 Total global merchant fleet >1000gt, revised fleet base from previous years (excl. repair/rebuildings/layup); source IHS Fairplay
The total income and operating profit remained stable in the second quarter despite challenging market conditions, with the strong USD influencing both top–line and operating profit.
Average number of vessels on full technical management was on par with the previous quarter. By the end of June, WSM served 400 ships worldwide, out of which approximately 40% were on full technical management and 6% were on layup management. The remaining contracts were related to crewing services.
This 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.
Total income for WTS improved by 9% compared with the previous quarter, supported by increased activity within most areas outside offshore.
The new order intake was reduced slightly compared with the first quarter. The total order reserve amounted to USD 395 million at the end of the second quarter, down from USD 411 million by the end of the first quarter. The WTS operating profit improved in the second quarter, driven by operational improvements among most activities.
This includes Wilhelmsen Insurance Services (WIS), and certain corporate services.
Wilhelmsen Insurance Services had a fairly stable development in total income and operating profit compared with the previous quarter.
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.
| Key figures - Holding and investments | |||||
|---|---|---|---|---|---|
| USD mill | Q-on-Q | Y-o-Y | |||
| - unless otherwise indicated | Q2'15 | Q1'15 | Change | Q2'14 | Change |
| Total income | 10 | 6 | 75 % | 10 | 1 % |
| - Holding | 6 | 5 | 25 % | 7 | -11 % |
| - NorSea Group | 4 | 1 | >100% | 4 | 21 % |
| - Other investments | 0 | 0 | 0 | ||
| - Eliminations | 0 | 0 | 0 | ||
| EBITDA | 2 | -2 | 1 | ||
| Operating profit/EBIT | 2 | -2 | 0 | ||
| Financial income/(expenses) | 1 | 4 | -73 % | 4 | -74 % |
| - Investment management | 0 | 5 | 3 | ||
| - Qube | 1 | 0 | 1 | ||
| - Other financial income/(expense) | 0 | -1 | 0 | ||
| - Tax income/(expense) | 2 | 0 | 1 | ||
| Profit/(loss) | 5 | 2 | 6 | ||
| - Minority interests | 0 | 0 | 0 | ||
| Profit/(loss) after minority | 5 | 2 | 6 | ||
Total income for the Holding and Investments segment increased to USD 10 million in the second quarter. The contribution from NorSea Group (NSG) was up, mainly lifted by seasonality.
The operating profit in Holding and Investments was USD 2 million, reflecting normal operation for the quarter in the parent company and income from NSG.
Net financials was a net income of USD 1 million, including USD 1 million dividend from Qube and nil from investment management.
Net profit after minorities for the period was USD 5 million.
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 in WWH's accounts as "associated investment", with share of net result reported as income from associated investments.
Preliminary total income for NSG increased to NOK 806 million in the second quarter, including share of profits from associates and joint ventures and sales gains. Income and operating profit were positively impacted by normal seasonality and high supply base activity.
WWHI share of net result in NSG was a gain of USD 4 million for the quarter. This was an increase compared with the previous quarter, driven by seasonality and reversal of unrealised losses on interest derivatives.
Qube is Australia's largest integrated provider of import and export logistics services, and listed on the Australian Securities Exchange. Through WWHI, WWH owns 6.3% of Qube. The Qube investment is reported in WWH's accounts as "investment available for sale", with changes in market value of the shareholding reported under comprehensive income and dividend income reported as financial income.
| Value of investment: Qube Logistics Holding Limited |
End Q2'15 |
End Q1'15 |
|---|---|---|
| Qube share price (AUD) | 2,35 | 2,97 |
| Qube shares held by WWH (million) | 66 | 66 |
| Value of WWH shareholding (AUD million) | 155 | 196 |
| Value of WWH shareholding (USD million) | 119 | 149 |
| Value of WWH shareholding (NOK million) | 937 | 1 205 |
| Value per WWI/WWIB share (NOK) | 20 | 26 |
| Return (in AUD): |
| Return (in AUD): | ||
|---|---|---|
| Qube Logistics Holding Limited | Q2'15 | YTD |
| Dividend (AUD per share) | 0,027 | 0,027 |
| Price return (share price development) | -21 % | -3 % |
| Total return (incl. dividend; not reinvested) | -20 % | -2 % |
The investment in Qube represented NOK 20 per outstanding share in WWH (WWI/WWIB) by the end of the second quarter. In February, Qube declared interim dividend of AUD 0.027 per share, which was paid in April. Total proceeds to WWHI of USD 1 million was reported as financial income in the second quarter.
Investment management includes investment in equities, bonds and other financial assets available for sale and managed as part of an investment portfolio.
The financial investment portfolio held by WWH was USD 88 million by the end of the first quarter, down from USD 91 million by the end of the previous quarter. The portfolio primarily included Nordic equities and investment-grade bonds. Net income from investment management was nil in the second quarter.
Holding/other activities includes WilNor Governmental Services (owned 51%) and general holding activities.
Net contribution from holding/other activities was stable for the quarter.
| Share price and outstanding shares: | End | End |
|---|---|---|
| Wilh. Wilhelmsen Holding ASA | Q2'15 | Q1'15 |
| WWI share price (NOK) | 170,50 | 158,00 |
| WWIB share price (NOK) | 170,00 | 156,50 |
| 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 | Q2'15 | YTD |
| WWI dividend (NOK per share) | 3,00 | 3,00 |
| WWI price return (share price development) | 8 % | 0 % |
| WWI total return (incl. dividend; not reinvested) | 10 % | 2 % |
| WWIB dividend (NOK per share) | 3,00 | 3,00 |
| 9 % | 4 % | |
| WWIB price return (share price development) |
The WWH share price increased during the second quarter, with the WWI share rising by 8% to NOK 170.50 while the WWIB share was up by 9% to NOK 170.00.
WWH held 100.000 of its own WWI shares by the end of the quarter. WWH's goal is to provide shareholders with a high return over time through a combination of rising value for the company's shares and payment of dividend.
On 23 April 2015 the annual general meeting approved a dividend of NOK 3.00 per share. The dividend was paid in 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 2016, although no longer than 30 June 2016.
Based on the market outlook, WWASA expects seasonally lower auto volumes and continued soft high and heavy volumes in the second half of 2015.
Logistics activities are anticipated to be on par with the first half of 2015.
The underlying trend remains positive in a challenging market. Over the last 12 months the strong USD has contributed significantly to operating profits.
A process is ongoing related to the restructuring of the WTS business area.
The board expects a stable activity level for the group, but with a seasonal slowdown in the second half of 2015.
Lysaker, 5 August 2015 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
| Holding and | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group | WMS group | Investments 3 | Eliminations | Total | ||||||||||
| Quarter | Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
| Operating revenue Other income |
583 | 667 | 2 525 | 252 | 276 | 1 090 | 6 | 7 | 26 | (7) | (8) | (31) | 833 | 941 | 3 610 |
| Share of profits from associates |
14 | 15 | 66 | 0 | 1 | 6 | 4 | 4 | 6 | 0 | 0 | 0 | 18 | 19 | 79 |
| Gain on disposals of assets | 0 | 0 | 0 | 2 | 4 | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 4 | 5 |
| Total income | 596 | 682 | 2 592 | 254 | 281 | 1 101 | 10 | 10 | 32 | (7) | (8) | (31) | 854 | 965 | 3 693 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (217) | (282) | (1 061) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (217) | (282) (1 061) | |
| Vessel expenses | (22) | (20) | (82) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (22) | (20) | (82) |
| Charter expenses | (84) | (83) | (329) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (84) | (83) | (329) |
| Inventory cost | 0 | 0 | 0 | (116) | (130) | (518) | (0) | (0) | (1) | 0 | 0 | 0 | (116) | (130) | (520) |
| Employee benefits | (42) | (71) | (197) | (68) | (77) | (267) | (4) | (5) | (7) | 0 | 0 | 1 | (114) | (152) | (470) |
| Other expenses | (119) | (131) | (510) | (37) | (45) | (169) | (3) | (4) | (16) | 6 | 8 | 31 | (153) | (172) | (664) |
| Depreciation and impairments | (40) | (38) | (160) | (5) | (7) | (24) | (0) | (0) | (1) | 0 | 0 | 0 | (45) | (45) | (185) |
| Total operating expenses | (523) | (625) | (2 339) | (226) | (259) | (979) | (8) | (10) | (26) | 7 | 8 | 31 | (751) | (885) (3 312) | |
| Operating profit 2 | 73 | 57 | 253 | 28 | 23 | 122 | 2 | 0 | 6 | 0 | 0 | 0 | 103 | 80 | 381 |
| Financial income/(expenses) | 4 | (31) | (131) | (13) | (13) | 7 | 1 | 4 | 16 | 0 | 0 | 0 | (8) | (40) | (108) |
| Profit/(loss) before tax | 77 | 26 | 122 | 15 | 10 | 129 | 3 | 5 | 22 | 0 | 0 | 0 | 95 | 40 | 273 |
| Tax income/(expense) | (7) | (0) | 46 | (4) | (2) | (25) | 2 | 1 | (1) | 0 | 0 | 0 | (9) | (2) | 20 |
| Profit/(loss) | 70 | 26 | 168 | 11 | 7 | 104 | 5 | 6 | 21 | 0 | 0 | 0 | 86 | 39 | 292 |
| Minority interests | 19 | 8 | 47 | 0 | 1 | 4 | (0) | 0 | 0 | 0 | 0 | 0 | 20 | 8 | 51 |
| Profit/(loss) to the owners of parent |
51 | 18 | 121 | 11 | 6 | 100 | 5 | 6 | 21 | 0 | 0 | 0 | 66 | 30 | 241 |
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.
WWASA group: Q1 - Disposal of 0.5% shares in Hyundai Glovis by a gain of USD 26 mill. 2015: Disposals gain/(loss) of assets and impairment charges (Included in share of profits from joint ventures and associates)
2014: Disposals gain/(loss) of assets and impairment charges (Included in share of profits from joint ventures and associates) There has not been any material gain/(loss) the first, second, third and fourth quarter of 2014.
Joint ventures based on proportionate method
| Holding and | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | WWASA group | WMS group | Investments 3 | Eliminations | Total | ||||||||||
| Year to date | YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
| Operating revenue | 1 156 | 1 292 | 2 525 | 505 | 550 | 1 090 | 11 | 13 | 26 | (13) | (17) | (31) | 1 658 | 1 839 | 3 610 |
| Other income Share of profits from associates |
23 | 26 | 66 | 2 | 3 | 6 | 5 | 5 | 6 | 0 | 0 | 0 | 30 | 34 | 79 |
| Gain on disposals of assets | 27 | 0 | 0 | 4 | 6 | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 31 | 6 | 5 |
| Total income | 1 205 | 1 318 | 2 592 | 511 | 559 | 1 101 | 16 | 18 | 32 | (13) | (17) | (31) | 1 720 | 1 879 | 3 693 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (432) | (543) | (1 061) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (432) | (543) | (1 061) |
| Vessel expenses | (45) | (42) | (82) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (45) | (42) | (82) |
| Charter expenses | (163) | (164) | (329) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (163) | (164) | (329) |
| Inventory cost | 0 | 0 | 0 | (234) | (258) | (518) | (1) | (1) | (1) | 0 | 0 | 0 | (234) | (258) | (520) |
| Employee benefits | (84) | (121) | (197) | (136) | (154) | (267) | (9) | (11) | (7) | 0 | 0 | 1 | (228) | (286) | (470) |
| Other expenses | (233) | (263) | (510) | (77) | (86) | (169) | (7) | (8) | (16) | 12 | 16 | 31 | (304) | (341) | (664) |
| Depreciation and impairments | (78) | (75) | (160) | (10) | (13) | (24) | (0) | (0) | (1) | 0 | 0 | 0 | (88) | (88) | (185) |
| Total operating expenses | (1 034) | (1 208) | (2 339) | (457) | (512) | (979) | (16) | (20) | (26) | 13 | 17 | 31 | (1 494) | (1 722) | (3 312) |
| Operating profit 2 | 171 | 111 | 253 | 55 | 47 | 122 | (0) | (2) | 6 | 0 | 0 | 0 | 225 | 156 | 381 |
| Financial income/(expenses) | (42) | (47) | (131) | (6) | (16) | 7 | 5 | 7 | 16 | 0 | 0 | 0 | (42) | (56) | (108) |
| Profit/(loss) before tax | 129 | 64 | 122 | 49 | 31 | 129 | 5 | 6 | 22 | 0 | 0 | 0 | 183 | 100 | 273 |
| Tax income/(expense) | (2) | (6) | 46 | (13) | (8) | (25) | 1 | 2 | (1) | 0 | 0 | 0 | (13) | (12) | 20 |
| Profit/(loss) | 127 | 58 | 168 | 36 | 23 | 104 | 7 | 7 | 21 | 0 | 0 | 0 | 170 | 88 | 292 |
| Minority interests | 35 | 17 | 47 | 1 | 2 | 4 | (0) | 0 | 0 | 0 | 0 | 0 | 36 | 18 | 51 |
| Profit/(loss) to the owners of | |||||||||||||||
| parent | 92 | 41 | 121 | 35 | 21 | 100 | 7 | 7 | 21 | 0 | 0 | 0 | 134 | 69 | 241 |
1 / 2 / 3 Comments - see previous page
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.
Joint ventures based on proportionate method
| USD mill | WWASA group | WMS group | Holding & Investments 3 | Total incl eliminations | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter on quarter | Q3 2014 |
Q4 2014 |
Q1 2015 |
Q2 2015 |
Q3 2014 |
Q4 2014 |
Q1 2015 |
Q2 2015 |
Q3 2014 |
Q4 2014 |
Q1 2015 |
Q2 2015 |
Q3 2014 |
Q4 2014 |
Q1 2015 |
Q2 2015 |
| Operating revenue | 619 | 613 | 573 | 583 | 271 | 269 | 253 | 252 | 6 | 6 | 5 | 6 | 889 | 882 | 825 | 833 |
| Other income | ||||||||||||||||
| Share of profits from | ||||||||||||||||
| associates | 30 | 10 | 9 | 14 | 1 | 2 | 2 | 0 | 3 | (1) | 1 | 4 | 34 | 10 | 12 | 18 |
| Gain on disposals of assets | 0 | 0 | 26 | 0 | 1 | (2) | 2 | 2 | 0 | 0 | 0 | 0 | 1 | (2) | 29 | 2 |
| Total income | 650 | 624 | 609 | 596 | 273 | 269 | 257 | 254 | 9 | 4 | 6 | 10 | 924 | 890 | 866 | 854 |
| Operating expenses | ||||||||||||||||
| Voyage expenses | (264) | (255) | (215) | (217) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (264) | (255) | (215) | (217) |
| Vessel expenses | (21) | (19) | (23) | (22) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (21) | (19) | (23) | (22) |
| Charter expenses | (83) | (82) | (79) | (84) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (83) | (82) | (79) | (84) |
| Inventory cost | 0 | 0 | 0 | 0 | (130) | (130) | (118) | (116) | (0) | (0) | (0) | (0) | (131) | (131) | (118) | (116) |
| Employee benefits | (49) | (26) | (41) | (42) | (78) | (35) | (68) | (68) | (5) | 8 | (4) | (4) | (133) | (52) | (113) | (114) |
| Other expenses Depreciation and |
(123) | (124) | (115) | (119) | (41) | (41) | (40) | (37) | (4) | (4) | (3) | (3) | (160) | (163) | (152) | (153) |
| impairments | (44) | (41) | (38) | (40) | (6) | (5) | (5) | (5) | (0) | (0) | (0) | (0) | (50) | (46) | (43) | (45) |
| Total operating expenses | (584) | (547) | (511) | (523) | (256) | (211) | (230) | (226) | (10) | 4 | (8) | (8) | (842) | (748) | (743) | (751) |
| Operating profit 2 | 66 | 76 | 98 | 73 | 17 | 58 | 27 | 28 | (1) | 8 | (2) | 2 | 83 | 142 | 123 | 103 |
| Financial income/(expenses) | (9) | (75) | (46) | 4 | (9) | 32 | 7 | (13) | 1 | 8 | 4 | 1 | (17) | (35) | (35) | (8) |
| Profit/(loss) before tax | 57 | 1 | 52 | 77 | 8 | 90 | 34 | 15 | 0 | 16 | 2 | 3 | 66 | 107 | 88 | 95 |
| Tax income/(expense) | (3) | 55 | 5 | (7) | (2) | (15) | (9) | (4) | 1 | (4) | (0) | 2 | (4) | 36 | (4) | (9) |
| Profit/(loss) | 55 | 56 | 57 | 70 | 6 | 75 | 25 | 11 | 1 | 12 | 2 | 5 | 62 | 143 | 84 | 86 |
| Minority interests | 15 | 16 | 16 | 19 | 1 | 1 | 1 | 0 | 0 | 0 | 0 | (0) | 16 | 17 | 16 | 20 |
| Profit/(loss) to the owners of parent |
39 | 40 | 41 | 51 | 5 | 74 | 25 | 11 | 1 | 12 | 2 | 5 | 46 | 126 | 68 | 66 |
1 / 2 / 3 Comments - see previous page
| USD mill | WWASA group | WMS group | Holding & Investments | Total incl eliminations | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |||
| One off pension | 2014 | 2014 | 2015 | 2015 | 2014 | 2014 | 2015 | 2015 | 2014 | 2014 | 2015 | 2015 | 2014 | 2014 | 2015 | 2015 | ||
| Operating profit before | ||||||||||||||||||
| one off pension | 66 | 76 | 98 | 73 | 17 | 58 | 27 | 28 | (1) | 8 | (2) | 2 | 83 | 142 | 123 | 103 | ||
| Gain: term. benefit plan 4 | 17 | 35 | 11 | 63 | ||||||||||||||
| Total one off pension | 0 | 17 | 0 | 0 | 0 | 35 | 0 | 0 | 0 | 11 | 0 | 0 | 0 | 63 | 0 | 0 | ||
| Operating profit after one | ||||||||||||||||||
| off pension | 66 | 60 | 98 | 73 | 17 | 23 | 27 | 28 | (1) | (3) | (2) | 2 | 83 | 80 | 123 | 103 |
4Gain: termination of defined benefit plan for Norwegian employees (included in employees benefit)
Joint ventures based on proportionate method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Financial items | |||||
| Investment management 1 | (1,6) | 5,1 | 11,7 | 16,8 | 17,6 |
| Interest income | 1,5 | 1,9 | 3,3 | 4,5 | 8,0 |
| Other financial items | 0,5 | (1,8) | (1,2) | (6,8) | (9,6) |
| Net financial items | 0,4 | 5,3 | 13,7 | 14,6 | 16,1 |
| Financial - interest expenses | |||||
| Interest expenses | (16,7) | (24,2) | (34,3) | (42,1) | (76,4) |
| Interest rate derivatives - realised | (10,0) | (8,6) | (17,0) | (11,1) | (28,5) |
| Net financial - interest expenses | (26,6) | (32,8) | (51,3) | (53,2) | (104,9) |
| Interest rate derivatives - unrealised | 18,5 | (6,4) | 19,9 | (12,0) | (16,8) |
| Financial currency | |||||
| Net currency gain/(loss) | (22,3) | 3,3 | (14,5) | (8,4) | 86,0 |
| Currency derivatives - realised | (4,0) | (1,2) | (0,5) | (3,3) | 9,8 |
| Currency derivatives - unrealised | 14,1 | (1,6) | (1,4) | 5,6 | (38,3) |
| Cross currency derivatives - realised | (0,0) | 7,8 | 0,0 | 8,7 | 3,6 |
| Cross currency derivatives - unrealised | 11,1 | (13,9) | (10,0) | (7,6) | (63,4) |
| Net financial currency | (1,1) | (5,6) | (26,3) | (5,0) | (2,2) |
| Financial derivatives bunkers | |||||
| Valuation of bunker hedges | 0,9 | (0,1) | 1,7 | (0,3) | (0,3) |
| Net financial derivatives bunkers | 0,9 | (0,1) | 1,7 | (0,3) | (0,3) |
| Financial income/(expenses) | (7,8) | (39,6) | (42,3) | (56,0) | (108,2) |
1 Includes financial derivatives for trading
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Cash settled bunker and fuel hedges | (0,1) | 0,1 | (1,1) | 0,5 | 0,5 |
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.
| Key figures | ||||||||
|---|---|---|---|---|---|---|---|---|
| Q-on-Q | Y-o-Y | 01.01- | 01.01- | Y-o-Y | ||||
| (USD mill) | Q2'15 | Q1'15 | Change | Q2'14 | Change | 30.06.15 | 30.06.14 | Change |
| Total income | 376 | 393 | -4 % | 394 | -5 % | 769 | 776 | -1 % |
| EBITDA | 121 | 134 | -10 % | 96 | 26 % | 255 | 189 | 35 % |
| Operating profit/EBIT | 95 | 110 | -14 % | 69 | 37 % | 204 | 137 | 49 % |
| Profit(loss) after minority | 66 | 68 | -2 % | 30 | >100% | 134 | 69 | 93 % |
| EPS (USD) | 1,43 | 1,46 | -2 % | 0,65 | >100% | 2,89 | 1,49 | 94 % |
Total income for the Wilh. Wilhelmsen Holding ASA group (WWH) was relatively flat at USD 376 million for the second quarter of 2015, mainly influenced by a slight reduction in income from both Wilh. Wilhelmsen ASA's (WWASA) and Wilhelmsen Marine Services (WMS). The first quarter included a non-recurring gain (income) of USD 26 million from WWASA's share reduction in Hyundai Glovis.
The operating profit for the second quarter was down compared with first quarter of 2015, amounting to USD 95 million. The first quarter included a non-recurring gain related to WWASA's share reduction in Hyundai Glovis. When excluding the sales gain the operating profit for WWH group increased by 13% compared with the first quarter. A slight increase in WWASA and continued strong result from WMS, coupled with a seasonal uplift in NorSea drove the development.
Net financials was an expense of USD 2 million in the second quarter, mainly impacted by a USD 8 million gain on net interest rate derivatives. Contribution from both investment management and net financial currency was a loss of USD 2 million.
Tax was included with an expense of USD 6 million.
Minority interests' share of profit in the second quarter was USD 19 million, mainly related to minority shareholders in WWASA.
Profit after minority interests was flat at USD 66 million in the first quarter.
Total income for WWH was relatively stable at USD 769 million for the first half of 2015. WWASA income increased, supported by a non–recurring gain, while WMS total income decreased, influenced by the continued strong USD.
Operating profit for the first half of the year was USD 204 million, up 49% compared with the corresponding period last year. The increase reflected improved results from WWASA, mainly due to non-recurring items. WMS operating profit also increased in the first half of 2015, supported by the strong USD and cost cutting initiatives. Nonrecurring items in the first half of 2014 included sale of assets in WMS as well as restructuring costs in WWASA, while first half of 2015 included a Hyundai Glovis sales gain.
Net financials was an expense of USD 26 million in the first half year, impacted by USD 4 million gain on net interest rate derivatives, while net financial currency was a loss of USD 21 million. Income from investment management contributed with USD 12 million in the first half year.
Minority interests' share of profit in the first half year was USD 35 million, of which USD 34 million was related to minority shareholders in WWASA.
Net profit after tax and minority interests was USD 134 million in the first half year of 2015.
The WWH group's net cash flow in the second quarter 2015 from operating, investing and financing activities was negative with USD 14 million.
Cash flow from operating activities was USD 92 million, reflecting dividend from joint ventures and associates and solid operating result. Cash flow from investing activities was negative with USD 93 million mainly driven by fixed asset investments and net current financial investments. Cash flow from financing activities was negative with USD 14 million, reflecting net effect of net debt uptake, interest paid and dividend to shareholders during the period.
| Cash flow | ||
|---|---|---|
| USD mill. - unless otherwise indicated | Q2'15 | Q1'15 |
| Cash from operations | 92 | 66 |
| Dividend received from joint ventures and | ||
| associates | 36 | 0 |
| Net cash provided by operating activities | 92 | 66 |
| Investments in fixed assets | -84 | -76 |
| Net financial investments | -9 | -17 |
| Sale of assets/ Other | 0 | 52 |
| Net cash flow from investing activities | -93 | -41 |
| Net repayment of debt | 38 | 31 |
| Dividend to shareholders and minorities | -27 | 0 |
| Interest payment/other | -25 | -20 |
| Net cash flow from financing activities | -14 | 11 |
| Net increase in cash and cash equivalents | -14 | 36 |
Cash and cash equivalents were USD 386 million by end of the second quarter of 2015. Total liquid assets including current financial investments amounted to USD 723 million.
The main group companies also have undrawn committed drawing rights to cover 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.
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 337 million at the end of the second quarter, with investments in various asset classes including Nordic shares and investment grade bonds. Of this, USD 88 million were in the parent company.
| Liquidity and debt | ||
|---|---|---|
| USD mill. - unless otherwise | ||
| indicated | 30.06.15 | 31.12.14 |
| Cash and cash equivalent | 386 | 364 |
| - Wilh. Wilhelmsen ASA | 160 | 140 |
| - Wilhelmsen Maritime Services | 156 | 179 |
| - Holding & Investments | 70 | 46 |
| - Eliminations | 0 | 0 |
| Current financial investments | 337 | 324 |
| - Wilh. Wilhelmsen ASA | 248 | 235 |
| - Wilhelmsen Maritime Services | 0 | 0 |
| - Holding & Investments | 88 | 89 |
| - Eliminations | 0 | 0 |
| Interest bearing debt | 1 746 | 1 693 |
| - Wilh. Wilhelmsen ASA | 1393 | 1325 |
| - Wilhelmsen Maritime Services | 318 | 328 |
| - Holding & Investments | 35 | 40 |
| - 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.
The main risks as considered by the Board of Directors at that time are described in the 2014 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.
Global growth rates for 2015 have been revised some down, but projections for 2016 continue to indicate a modest but uneven pick-up in the global economy (source IMF). While the US economy is gaining speed after a slow start of the year, a slowdown in the Chinese economy and prolonged fall in commodity prices (including oil) impacts economic activity in commodity exporting countries and world trade in general.
Political and social unrest continued in many counties also in the first half of 2015, but with no major change in impact on group operation.
While currency markets remained volatile in the first half of 2015, the appreciation of the As of 30 June 2015 the group's total interest-bearing debt was USD
1 746 million, of which USD 35 million related to Holding and Investments, USD 318 million related to the WMS group and USD 1 393 million related to the WWASA group.
USD against most currencies continued. Expectation of a future increase in US interest rate continues to support the USD, and creates uncertainty related to any impact on the wider currency and equity markets going forward.
The share price of Hyundai Glovis (held through WWASA) fell 30% during the first half of 2015, while the share prices of WWASA remained relatively stable (both measured in local currencies).
EUKORs contract with Hyundai and Kia expires 31 December 2015. EUKOR aims to uphold its 60% share of Hyundai and Kia exports out of Korea.
WWL and EUKOR continue to be part of anti-trust investigations of the car carrying industry in several jurisdictions, of which the EU and US are among the bigger jurisdiction. As some of the processes are confidential, WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are a part of. The company expects further clarification during 2015 and 2016.
Lysaker, 5 August 2015 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 2015 |
01.04-30.06 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
|---|---|---|---|---|---|---|
| Operating revenue | 329 | 342 | 657 | 686 | 1 369 | |
| Other income | ||||||
| Share of profits from joint ventures and associates | 44 | 48 | 81 | 85 | 165 | |
| Gain on disposals of assets | 2 | 2 | 4 | 31 | 6 | 5 |
| Total income | 376 | 394 | 769 | 776 | 1 538 | |
| Operating expenses | ||||||
| Vessel expenses | (11) | (11) | (23) | (25) | (47) | |
| Charter expenses | (5) | (5) | (11) | (11) | (23) | |
| Inventory cost | (116) | (130) | (234) | (258) | (520) | |
| Employee benefits | 3 | (86) | (107) | (170) | (208) | (337) |
| Other expenses | (37) | (44) | (76) | (84) | (167) | |
| Depreciation and impairments | 4 | (26) | (27) | (51) | (52) | (105) |
| Total operating expenses | (282) | (325) | (565) | (640) | (1 199) | |
| Operating profit | 95 | 69 | 204 | 137 | 339 | |
| Financial income/(expenses) | 4 | (2) | (34) | (26) | (46) | (85) |
| Profit before tax | 92 | 35 | 178 | 91 | 255 | |
| Tax income/(expense) | 6 | (6) | 3 | (8) | (4) | 36 |
| Profit for the period | 86 | 38 | 169 | 87 | 290 | |
| Attributable to: minority interests | 19 | 8 | 35 | 17 | 49 | |
| owners of the parent | 66 | 30 | 134 | 69 | 241 | |
| Basic earnings per share (USD) | 7 | 1,43 | 0,65 | 2,89 | 1,49 | 5,20 |
Joint ventures based on equity method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year | |
|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | ||
| Profit for the period | 86 | 38 | 169 | 87 | 290 | |
| Items that will be reclassified to income statement | ||||||
| Net investment hedge/cash flow hedges (net after tax) | 0 | 0 | 0 | 1 | 7 | |
| Revaluation market to market value | (30) | 3 | (1) | 18 | 24 | |
| Currency translation differences | 5 | 30 | (1) | (46) | 8 | (168) |
| Items that will not be reclassified to income statement | ||||||
| Remeasurement postemployment benefits, net of tax | (0) | (0) | (1) | (51) | ||
| Other comprehensive income, net of tax | 0 | 3 | (49) | 28 | (187) | |
| Total comprehensive income for the period | 86 | 40 | 120 | 115 | 103 | |
| Total comprehensive income attributable to: | ||||||
| Owners of the parent | 65 | 33 | 86 | 96 | 62 | |
| Minority interests | 21 | 8 | 35 | 19 | 42 | |
| Total comprehensive income for the period | 86 | 40 | 120 | 115 | 103 |
The above consolidated income statement should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | Note | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|---|
| Non current assets | ||||
| Deferred tax asset | 6 | 49 | 20 | 43 |
| Goodwill and other intangible assets | 3 | 267 | 319 | 276 |
| Vessels, property and other tangible assets | 3 | 2 040 | 2 004 | 1 950 |
| Investments in joint ventures and associates | 1 289 | 1 284 | 1 264 | |
| Other non current assets | 8 | 141 | 169 | 154 |
| Total non current assets | 3 786 | 3 795 | 3 687 | |
| Current assets | ||||
| Inventory | 108 | 127 | 110 | |
| Current financial investments | 337 | 366 | 324 | |
| Other current assets | 359 | 443 | 354 | |
| Cash and cash equivalents | 386 | 383 | 364 | |
| Total current assets | 1 189 | 1 319 | 1 152 | |
| Total assets | 4 975 | 5 114 | 4 839 | |
| Equity | ||||
| Paid-in capital | 9 | 122 | 122 | 122 |
| Retained earnings | 7/9 | 1 806 | 1 786 | 1 738 |
| Attributable to equity holders of the parent | 1 928 | 1 908 | 1 860 | |
| Minority interests | 494 | 456 | 469 | |
| Total equity | 2 422 | 2 364 | 2 329 | |
| Non current liabilities | ||||
| Pension liabilities | 87 | 105 | 92 | |
| Deferred tax | 6 | 17 | 61 | 8 |
| Non current interest-bearing debt | 10 | 1 618 | 1 645 | 1 590 |
| Other non current liabilities | 285 | 214 | 297 | |
| Total non current liabilities | 2 007 | 2 025 | 1 987 | |
| Current liabilities | ||||
| Current income tax | 6 | 5 | 11 | |
| Public duties payable | 9 | 9 | 9 | |
| Current interest-bearing debt | 10 | 128 | 230 | 103 |
| Other current liabilities | 403 | 480 | 399 | |
| Total current liabilities | 545 | 725 | 522 | |
| Total equity and liabilities | 4 975 | 5 114 | 4 839 |
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 | YTD | YTD | Full year | |
|---|---|---|---|---|---|---|
| Note | 2015 | 2014 | 2015 | 2014 | 2014 | |
| Cash flow from operating activities | ||||||
| Profit before tax | 92 | 35 | 178 | 91 | 254 | |
| Financial (income)/expenses | (9) | 16 | (14) | 30 | (49) | |
| Financial derivatives unrealised | 2 | 9 | 37 | 13 | 118 | |
| Depreciation/impairment | 3 | 26 | 27 | 51 | 52 | 105 |
| Loss/ (gain) on sale of fixed assets (Gain)/loss from sale of subsidiaries, joint ventures and |
3 | 0 | (1) | (1) | (1) | (2) |
| associates | 2 | (0) | (4) | (28) | (4) | (4) |
| Change in net pension asset/liability | 1 | (1) | (3) | (3) | (61) | |
| Change in inventory | (4) | (2) | (1) | (3) | 2 | |
| Change in working capital | (5) | 8 | (10) | (27) | (50) | |
| Share of profit from joint ventures and associates | (44) | (48) | (81) | (85) | (165) | |
| Dividend received from joint ventures and associates | 36 | 35 | 36 | 35 | 103 | |
| Tax paid (company income tax, withholding tax) | (3) | (3) | (5) | (7) | (11) | |
| Net cash provided by operating activities | 92 | 71 | 158 | 91 | 241 | |
| Cash flow from investing activities | ||||||
| Proceeds from sale of fixed assets | 3 | 0 | 2 | 9 | 13 | 26 |
| Investments in fixed assets | 3 | (84) | (39) | (160) | (54) | (91) |
| Net proceeds from sale of subsidiaries | 0 | 9 | 2 | 9 | 9 | |
| Net proceeds from sale of joint ventures and associates | 2 | (1) | 0 | 39 | 1 | 1 |
| Investments in joint ventures and associates | 0 | (17) | 0 | (17) | (17) | |
| Loans granted to joint ventures and associates | 0 | (1) | 0 | (1) | 1 | |
| Proceeds from sale of financial investments | 39 | 12 | 73 | 52 | 90 | |
| Current financial investments | (47) | (5) | (98) | (54) | (92) | |
| Interest received | 1 | 2 | 2 | 4 | 6 | |
| Changes in other investments | 0 | 1 | 1 | 0 | 0 | |
| Net cash flow from investing activities | (93) | (37) | (133) | (49) | (66) | |
| Cash flow from financing activities | ||||||
| Proceeds from issue of debt | 64 | 475 | 128 | 491 | 696 | |
| Repayment of debt | (26) | (436) | (59) | (460) | (753) | |
| Interest paid including interest derivatives | (19) | (31) | (44) | (46) | (91) | |
| Cash from financial derivatives | (5) | 7 | (0) | 5 | 12 | |
| Dividend to shareholders/purchase of own shares | (27) | (35) | (27) | (36) | (60) | |
| Net cash flow from financing activities | (14) | (21) | (3) | (45) | (197) | |
| Net increase in cash and cash equivalents 1 | (14) | 13 | 22 | (3) | (21) | |
| Cash and cash equivalents at the beg. of the period 1 | 400 | 369 | 364 | 386 | 386 | |
| Cash and cash equivalents at the end of the period 1 | 386 | 383 | 386 | 383 | 364 |
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 31.12.2014 | 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 |
| Balance at 31.12.2013 | 122 | 1 713 | 1 836 | 450 | 2 286 |
| Profit for the period | 69 | 69 | 17 | 87 | |
| Comprehensive income | 26 | 26 | 1 | 28 | |
| Paid dividends to shareholders | (23) | (23) | (13) | (36) | |
| Balance 30.06.2014 | 122 | 1 786 | 1 908 | 456 | 2 365 |
| Retained | Minority | ||||
|---|---|---|---|---|---|
| USD mill | Share capital | earnings | Total | interests | Total equity |
| Balance at 31.12.2013 | 122 | 1 713 | 1 836 | 450 | 2 286 |
| Profit for the period | 241 | 241 | 49 | 290 | |
| Comprehensive income | (180) | (180) | (7) | (187) | |
| Paid dividends to shareholders | (37) | (37) | (23) | (60) | |
| Balance 31.12.2014 | 122 | 1 738 | 1 861 | 469 | 2 329 |
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 2013 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 2013.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
Second quarter
There has not been any significant acquistions or disposals during the second quarter.
First, second, third and fourth quarter There has not been any significant acquisitions or disposals during the first,
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
second, third and fourth quarter of 2014.
Up to 31 December 2014 WWH ASA and WWASA had two pension schemes for employees in Norway; a defined benefit scheme closed for new members and a defined contribution scheme. Due to changes in the national pension scheme and changes in the pension market in general, the Board of WWH ASA and WWASA
decided to follow the recommendations from the pension committee to terminate the defined benefit pension scheme 31 December 2014. Effective 1 January 2015 all employees entered into a defined contribution pension scheme with improved saving rates.
| 31.12.2014 | |
|---|---|
| Employee benefits (excluding pension cost) | (370) |
| Pension cost | (24) |
| Gain related to termination of defined benefit plan | 57 |
| Employee benefits income statement | (337) |
| Pension cost | (24) |
| Gain related to termination of defined benefit plan | 57 |
| Other comprehensive income pension before tax | (46) |
| Net equity effect of pension cost before tax (parent and subsidaries) | (13) |
|---|---|
| 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 | 2014 | 2014 | 2014 | 2014 | 2014 |
| Operating profit before one off pension | 122 | -2 | -0 | 0 | 137 |
| Gain: termination of defined benefit plan for Norwegian employees | |||||
| (included in employees benefit) | 11 | 35 | 11 | 57 | |
| Gain: termination of defined benefit plan for Norwegian employees (Share | |||||
| of profit from joint ventures and associates) | 6 | 6 | |||
| Total one off pension | 17 | 35 | 11 | 0 | 63 |
| Operating profit after one off pension | 105 | -36 | (11) | 0 | 74 |
Joint ventures based on equity method
| USD mill | Vessels / Newbuilding contracts |
Other tangible assets |
Intangible assets |
Total tangible and intangible assets |
|---|---|---|---|---|
| 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 |
| 2014 | ||||
| Cost price 1.1 | 2 467 | 336 | 393 | 3 196 |
| Acquisition | 21 | 10 | 23 | 54 |
| Reclass/disposal | (55) | (7) | (5) | (66) |
| Currency translation differences | 0 | 1 | (7) | (5) |
| Cost price 30.06 | 2 433 | 341 | 405 | 3 178 |
| Accumulated depreciation and impairment losses 1.1 | (647) | (126) | (84) | (857) |
| Depreciation/amortisation | (38) | (8) | (6) | (52) |
| Reclass/disposal | 46 | 3 | 3 | 52 |
| Currency translation differences | 0 | 0 | 1 | 2 |
| Accumulated depreciation and impairment losses 30.06 | (639) | (131) | (86) | (856) |
| Carrying amounts 30.06 | 1 794 | 210 | 319 | 2 323 |
| 2014 | ||||
| Cost price 1.1 | 2 467 | 336 | 393 | 3 196 |
| Acquisition | 35 | 22 | 33 | 90 |
| Reclass/disposal | (103) | (18) | (5) | (126) |
| Currency translation differences | 0 | (33) | (68) | (101) |
| Cost price 31.12 | 2 400 | 307 | 353 | 3 059 |
| Accumulated depreciation and impairment losses 1.1 | (647) | (126) | (84) | (857) |
| Depreciation/amortisation | (76) | (15) | (10) | (101) |
| Reclass/disposal | 86 | 10 | 3 | 99 |
| Impairment Currency translation differences |
(4) | 0 | 0 | (4) |
| Accumulated depreciation and impairment losses 31.12 | 0 | 15 | 15 | 30 |
| (640) | (116) | (76) | (833) | |
| Carrying amounts 31.12 | 1 759 | 190 | 276 | 2 226 |
Joint ventures based on equity method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Financial items | |||||
| Investment management | (1,8) | 4,9 | 11,5 | 16,6 | 17,4 |
| Interest income | 0,9 | 1,5 | 2,2 | 3,7 | 6,5 |
| Other financial items | 0,6 | (1,5) | (1,3) | (6,6) | (9,8) |
| Net financial items | (0,4) | 4,9 | 12,3 | 13,7 | 14,1 |
| Financial - interest expenses | |||||
| Interest expenses | (11,4) | (20,0) | (24,0) | (33,8) | (59,1) |
| Interest rate derivatives - realised | (9,3) | (7,9) | (15,8) | (9,8) | (26,0) |
| Net financial - interest expenses | (20,7) | (27,9) | (39,7) | (43,6) | (85,1) |
| Interest rate derivatives - unrealised | 17,7 | (5,5) | 20,0 | (11,2) | (16,4) |
| Financial currency | |||||
| Net currency gain/(loss) | (21,1) | 3,4 | (8,7) | (8,3) | 92,5 |
| Currency derivatives - realised | (5,4) | (1,2) | (0,5) | (3,3) | 8,0 |
| Currency derivatives - unrealised | 15,5 | (1,6) | (1,4) | 5,7 | (38,3) |
| Cross currency derivatives - realised | (0,0) | 7,8 | 0,0 | 8,7 | 3,6 |
| Cross currency derivatives - unrealised | 11,1 | (13,9) | (10,0) | (7,6) | (63,4) |
| Net financial currency | 0,1 | (5,5) | (20,6) | (4,8) | 2,4 |
| Valuation of bunker hedges | 0,9 | 0,0 | 1,7 | 0,0 | 0,0 |
| Net financial derivatives bunkers | 0,9 | 0,0 | 1,7 | 0,0 | 0,0 |
| Financial income/(expenses) | (2,3) | (34,0) | (26,4) | (46,0) | (84,9) |
| Total net currencies effect | |||||
| Net currency gain/(loss) - Operating currency | (14,5) | 10,0 | 3,6 | 6,3 | 54,8 |
| Net currency gain/(loss) - Financial currency | (6,6) | (6,6) | (12,3) | (14,6) | 37,7 |
| Currency derivatives - realised | (5,4) | (1,2) | (0,5) | (3,3) | 8,0 |
| Currency derivatives - unrealised | 15,5 | (1,6) | (0,0) | 5,7 | (38,3) |
| Cross currency derivatives - realised | (0,1) | 7,8 | 0,0 | 8,7 | 3,6 |
| Cross currency derivatives - unrealised | 11,1 | (13,9) | (10,0) | (7,6) | (63,4) |
| Net financial currency | 0,1 | (5,5) | (19,2) | (4,8) | 2,4 |
| Currency translation differences through other comprehensive income Total net currency effect |
30,1 30,2 |
(0,8) (6,3) |
(46,3) (65,5) |
8,4 3,6 |
(167,9) (165,5) |
WWASA's subsidiary Wilhelmsen Lines Shipowning (WLS) commenced legal proceedings before the Oslo City Court based on the tax appeal board's decision to turn down the application for tonnage tax. The basis for the proceedings was that the transition rule valid for companies that exited the old tonnage tax regime (abolished in 2007) into ordinary taxation was in breach with The Constitution of Norway, article 97. Alternatively, WLS can claim a compensation for the economic loss caused by the unconstitutional transition rule. Until the company is faced with the final outcome of the litigation process, the issue will have no
impact on the income statement or balance sheet for the group.
Joint ventures based on equity method
The share capital is as follow with a nominal value of NOK 20:
| 34 637 092 |
|---|
| 11 866 732 |
| 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 2014,first and second quarter 2015.
| USD mill | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|
| Available-for-sale financial assets | |||
| At 1 January | 131 | 126 | 126 |
| Sale of available-for-sale financial assets | 0 | (5) | (5) |
| Market to market valuation | (4) | 13 | 21 |
| Currency translation adjustment | (7) | 8 | (11) |
| Total available-for-sale financial assets | 120 | 142 | 131 |
The investment in Norwegian Car Carriers ASA was sold in Q1 2014. Available-for-sale financial assets are denominated in Australian Dollar 30 June 2015 (30 June 2014).
Dividend for fiscal year 2013 was NOK 5.50 per share, where 3.00 per share was paid in May 2014 and NOK 2.00 per share was paid in November 2014.
The proposed dividend for fiscal year 2014 in 2015 is NOK 3.00 per share, was
approved by the annual general meeting on 23 April 2015, and paid to the shareholders in May 2015.
Joint ventures based on equity method
| USD mill | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|
| Non current interest-bearing debt | 1 618 | 1 645 | 1 590 |
| Current interest-bearing debt | 128 | 230 | 103 |
| Total interest-bearing debt | 1 746 | 1 876 | 1 693 |
| Cash and cash equivalents | 386 | 383 | 364 |
| Current financial investments | 337 | 366 | 324 |
| Net interest-bearing debt | 1 023 | 1 127 | 1 005 |
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 2015 (analogous for 30 June 2014).
Net interest-bearing debt in joint ventures (the group's share part of investments)
| USD mill | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|
| Non current interest-bearing debt | 659 | 587 | 620 |
| Current interest-bearing debt | 79 | 86 | 85 |
| Total interest-bearing debt | 737 | 673 | 705 |
| Cash and cash equivalents | 263 | 245 | 223 |
| Net interest-bearing debt | 475 | 428 | 482 |
| USD mill | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|
| Interest-bearing debt | |||
| Mortgages | 1 007 | 926 | 924 |
| Leasing commitments | 82 | 91 | 82 |
| Bonds | 304 | 472 | 319 |
| Bank loan | 353 | 387 | 368 |
| Total interest-bearing debt | 1 746 | 1 876 | 1 693 |
| Repayment schedule for interest-bearing debt | |||
| Due in 2015 | 65 | 184 | 103 |
| Due in 2016 | 189 | 98 | 185 |
| Due in 2017 | 123 | 303 | 118 |
| Due in 2018 | 286 | 80 | 280 |
| Due in 2019 and later | 1 082 | 1 210 | 1 008 |
| Total interest-bearing debt | 1 746 | 1 876 | 1 693 |
Joint ventures based on equity method
| USD mill | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| 2015 | ||||
| Financial assets at fair value | ||||
| Equities | 127 | 127 | ||
| Bonds | 210 | 0 | 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 |
| 2014 | ||||
| Financial assets at fair value | ||||
| Equities | 137 | 137 | ||
| Bonds | 212 | 22 | 0 | 233 |
| Financial derivatives | 6 | 6 | ||
| Available-for-sale financial assets | 136 | 136 | ||
| Total financial assets 30.06 | 485 | 27 | 0 | 512 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 0 | 101 | 101 | |
| Total financial liabilities 30.06 | 0 | 101 | 0 | 101 |
| USD mill | 2015 | 2014 | ||
| Changes in level 3 instruments | ||||
| Opening balance 01.01 | 0 | 0 | ||
| Closing balance | 0 | 0 |
The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. The fair value of financial instruments that are not traded in an active market (over-the-counter contracts) are based on third party quotes. These quotes use the maximum number of observable market rates for price discovery. Specific valuation techniques used by financial counterparties (banks) to value financial derivatives include: - Quoted market prices or dealer quotes for similar derivatives
The fair value of interest rate swaps is calculated as the net present value of the estimated future cash flows based on observable yield curves
The fair value of interest rate swap option (swaption) contracts is determined using observable volatility, yield curve and time-to-maturity parameters at the balance sheet date, resulting in a swaption premium. Options are typically valued by applying the Black-Scholes model.
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to net present value
The fair value of foreign exchange option contracts is determined using observable forward exchange rates, volatility, yield curves and time-to-maturity parameters at the balance sheet date, resulting in an option premium. Options are typically valued by applying the Black-Scholes model.
The carrying value less impairment provision of receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial derivatives.
The fair values, except for bond debt, are based on cash flows discounted using a rate based on market rates including margins and are within level 2 of the fair value hierarchy. The fair values of the bond debt are based on quoted prices and are also classified within level 2 of the fair value hierarchy due to limited trading in an active market.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.
The quoted market price used for financial assets held by the group is the current mid price. These instruments are included in level 1. Instruments included in level 1 at the end of June 2015 are liquid investment grade bonds (analogous for 2014).
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 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
Q2 2015 |
Q2 2014 |
Full year 2014 |
| Operating revenue | 79 | 68 | 285 | 252 | 276 | 1 090 | 6 | 7 | 26 | (7) | (8) | (31) | 329 | 342 | 1 369 |
| Other income Share of profits from joint |
|||||||||||||||
| ventures and associates | 40 | 43 | 152 | 0 | 1 | 6 | 4 | 4 | 6 | 0 | 0 | 0 | 44 | 48 | 165 |
| Gain on disposals of assets | 0 | 0 | 0 | 2 | 4 | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 4 | 5 |
| Total income | 119 | 111 | 437 | 254 | 281 | 1 101 | 10 | 10 | 32 | (7) | (8) | (31) | 376 | 394 | 1 538 |
| Primary operating profit Depreciation and |
86 | 65 | 291 | 33 | 30 | 146 | 2 | 1 | 7 | (0) | 0 | 0 | 121 | 96 | 444 |
| impairments | (21) | (19) | (80) | (5) | (7) | (24) | (0) | (0) | (1) | 0 | 0 | 0 | (26) | (27) | (105) |
| Operating profit 1 | 65 | 46 | 211 | 28 | 23 | 122 | 2 | 0 | 6 | (0) | 0 | 0 | 95 | 69 | 339 |
| Financial | |||||||||||||||
| income/(expenses) | 9 | (25) | (108) | (13) | (13) | 7 | 1 | 4 | 16 | 0 | 0 | 0 | (2) | (34) | (85) |
| Profit/(loss) before tax | 74 | 21 | 104 | 15 | 10 | 129 | 3 | 5 | 22 | (0) | 0 | 0 | 92 | 35 | 255 |
| Tax income/(expense) | (4) | 4 | 62 | (4) | (2) | (25) | 2 | 1 | (1) | 0 | 0 | 0 | (6) | 3 | 36 |
| Profit/(loss) | 70 | 25 | 166 | 11 | 7 | 104 | 5 | 6 | 21 | (0) | 0 | 0 | 86 | 38 | 290 |
| Minority interests | 19 | 7 | 45 | 0 | 1 | 4 | (0) | 0 | 0 | 0 | 0 | 0 | 19 | 8 | 49 |
| Profit/(loss) to the owners of parent |
51 | 18 | 121 | 11 | 6 | 100 | 5 | 6 | 21 | (0) | 0 | 0 | 66 | 30 | 241 |
| USD mill | WWASA group | WMS group | Holding & Investments 2 | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year to date | YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
| Operating revenue Other income |
155 | 139 | 285 | 505 | 550 | 1 090 | 11 | 13 | 26 | (13) | (17) | (31) | 657 | 686 | 1 369 |
| Share of profits from joint ventures and associates |
73 | 77 | 152 | 2 | 3 | 6 | 5 | 5 | 6 | 0 | 0 | 0 | 81 | 85 | 165 |
| Gain on disposals of assets | 27 | 0 | 0 | 4 | 6 | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 31 | 6 | 5 |
| Total income | 255 | 216 | 437 | 511 | 559 | 1 101 | 16 | 18 | 32 | (13) | (17) | (31) | 769 | 776 | 1 538 |
| Primary operating profit Depreciation and impairments |
190 (40) |
129 (38) |
291 (80) |
65 (10) |
61 (13) |
146 (24) |
0 (0) |
(1) (0) |
7 (1) |
(0) 0 |
0 0 |
0 0 |
255 (51) |
189 (52) |
444 (105) |
| Operating profit 1 | 149 | 91 | 211 | 55 | 47 | 122 | (0) | (2) | 6 | (0) | 0 | 0 | 204 | 137 | 339 |
| Financial income/(expenses) |
(26) | (37) | (108) | (6) | (16) | 7 | 5 | 7 | 16 | 0 | 0 | 0 | (26) | (46) | (85) |
| Profit/(loss) before tax | 123 | 54 | 104 | 49 | 31 | 129 | 5 | 6 | 22 | (0) | 0 | 0 | 178 | 91 | 255 |
| Tax income/(expense) | 3 | 2 | 62 | (13) | (8) | (25) | 1 | 2 | (1) | 0 | 0 | 0 | (8) | (4) | 36 |
| Profit/(loss) | 126 | 56 | 166 | 36 | 23 | 104 | 7 | 7 | 21 | (0) | 0 | 0 | 169 | 87 | 290 |
| Minority interests | 34 | 15 | 45 | 1 | 2 | 4 | (0) | 0 | 0 | 0 | 0 | 0 | 35 | 17 | 49 |
| Profit/(loss) to the owners of parent |
92 | 41 | 121 | 35 | 21 | 100 | 7 | 7 | 21 | (0) | 0 | 0 | 134 | 69 | 241 |
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 2015 |
31.12 2014 |
30.06 2015 |
31.12 2014 |
30.06 2015 |
31.12 2014 |
30.06 2015 |
31.12 2014 |
30.06 2015 |
31.12 2014 |
| Assets | ||||||||||
| Deferred tax asset | 28 | 25 | 17 | 16 | 4 | 2 | 0 | 0 | 49 | 43 |
| Intangible assets | 6 | 6 | 261 | 270 | 0 | 0 | 0 | 0 | 267 | 276 |
| Tangible assets | 1 854 | 1 760 | 184 | 187 | 3 | 3 | 0 | 0 | 2 040 | 1 950 |
| Investments in joint ventures and associates | 1 191 | 1 164 | 15 | 17 | 83 | 83 | 0 | 0 | 1 289 | 1 264 |
| Other non current assets | 1 | 1 | 10 | 11 | 130 | 142 | 0 | 0 | 141 | 154 |
| Current financial investments | 248 | 235 | 0 | 0 | 88 | 89 | 0 | 0 | 337 | 324 |
| Other current assets | 31 | 23 | 432 | 439 | 8 | 4 | (5) | (2) | 466 | 464 |
| Cash and cash equivalents | 160 | 140 | 156 | 179 | 70 | 46 | 0 | 0 | 386 | 364 |
| Total assets | 3 519 | 3 353 | 1 074 | 1 118 | 387 | 370 | (5) | (2) | 4 975 | 4 839 |
| Equity and liabilities | ||||||||||
| Equity | 1 806 | 1 707 | 278 | 310 | 338 | 312 | 0 | 0 | 2 422 | 2 329 |
| Deferred tax | 0 | 0 | 17 | 8 | 0 | 0 | 0 | 0 | 17 | 8 |
| Interest-bearing debt | 1 393 | 1 325 | 318 | 328 | 35 | 40 | 0 | 0 | 1 746 | 1 693 |
| Other non current liabilities | 249 | 264 | 115 | 115 | 8 | 9 | 0 | 0 | 372 | 389 |
| Other current liabilities | 72 | 55 | 346 | 357 | 5 | 9 | (5) | (2) | 417 | 419 |
| Total equity and liabilities | 3 519 | 3 353 | 1 074 | 1 118 | 387 | 370 | (5) | (2) | 4 975 | 4 839 |
Joint ventures based on equity method
| USD mill | WWASA group | WMS group | Holding & Investments | |||||
|---|---|---|---|---|---|---|---|---|
| Quarter | Q2 2015 | Q2 2014 | Q2 2015 | Q2 2014 | Q2 2015 | Q2 2014 | ||
| Profit before tax | 74 | 21 | 15 | 10 | 3 | 5 | ||
| Net financial (income)/expenses | (9) | 24 | 11 | 15 | 2 | (2) | ||
| Depreciation/impairment | 21 | 19 | 5 | 7 | - | 0 | ||
| Change in working capital | (6) | 17 | (27) | (42) | (1) | (1) | ||
| Share of profit from joint ventures and associates | (40) | (43) | (0) | (1) | (4) | (4) | ||
| Net (gain)/loss from sale of associate | - | |||||||
| Dividend received from joint ventures and associates | 33 | 31 | 3 | 4 | - | |||
| Net cash provided by operating activities | 73 | 69 | 7 | (8) | (1) | (2) | ||
| Net sale/(investments) in fixed assets | (73) | (13) | (9) | (20) | - | - | ||
| Net sale/(investments) in entities and segments | - | 0 | 8 | - | (18) | |||
| Current financial investments | (13) | 5 | 1 | 1 | 4 | 2 | ||
| Net changes in other investments | 2 | 2 | - | - | - | - | ||
| Net cash flow from investing activities | (83) | (5) | (9) | (11) | 4 | (16) | ||
| Net change of debt | 38 | 6 | - | 46 | - | (16) | ||
| Net change in other financial items | (16) | (6) | (2) | (9) | (1) | (1) | ||
| Net dividend from other segments/ to shareholders | (28) | (37) | (39) | (18) | 41 | 20 | ||
| Net cash flow from financing activities | (5) | (36) | (41) | 19 | 40 | 3 | ||
| Net increase in cash and cash equivalents | (16) | 28 | (42) | 1 | 43 | (15) | ||
| Cash and cash equivalents at the beg.of the period | 176 | 162 | 198 | 170 | 26 | 37 | ||
| Cash and cash equivalents at the end of period | 160 | 189 | 156 | 171 | 70 | 22 |
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.
WWL and EUKOR continue to be part of anti-trust investigations of the car carrying industry in several jurisdictions, of which the EU and US are among the bigger jurisdiction. As some of the processes are confidential, WWASA is not in a
30 July, WWL reached a settlement agreement with the Competition Commission in South Africa.
The Commission stated that WWL and other car carriers have allegedly fixed prices, divided markets and tendered collusively in respect of the provision of deep-sea transportation services in the period from 1999 to September 2012.
The Competition Commission, being the investigating authority, referred the settlement to the Competition Tribunal of South Africa to be tried. If the settlement is confirmed, WWL will pay an administrative penalty in the amount of R95 695
position to comment on the ongoing investigations which WWL and EUKOR are a part of. The company expects further clarification during 2015 and 2016.
529 (approx. USD 7.7 million).
WWL made an accrual for the penalty in fourth quarter 2014. The group's 50% share of the fine will therefore not have an accounting effect in 2015.
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2015 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, 5 August 2015 The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler Helen Juell Odd Rune Austgulen Bettina Banoun Carl E. Steen
Chair
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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