Wallenius Wilhelmsen

Earnings Release • May 8, 2014

Wilh. Wilhelmsen ASA - results for the first quarter 2014

Wilh. Wilhelmsen ASA - results for the first quarter 2014

A decrease in demand for auto transportation, partly

due to seasonality and bad weather, combined with an

unfavourable trade mix led to weaker profitability in

the shipping segment quarter on quarter. The

operating profit was also negatively affected by

reduced contribution from logistics activities.

The WWASA group posted an operating profit of USD 54

million in the first quarter of 2014 based on an

operating profit of USD 637 million. The

corresponding figures for the fourth quarter of 2013

were USD 66 million and USD 671 million. The fourth

quarter was negatively affected by an accrual of USD

16.5 million related to the cease and desist order

and surcharge order partly owned Wallenius Wilhelmsen

Logistics received from the Japanese Fair Trade

Commission. Including a sales gain of USD 1 million

in the fourth quarter, the adjusted operating profit

fell 34% and total income 5% quarter on quarter.

"With a 6% decrease in shipments, mainly auto

volumes, our profitability was weaker quarter on

quarter. The operating profit was also negatively

impacted by an unfavorable trade mix and increased

costs in US trades due to bad weather. With a slight

increase in high and heavy volumes our cargo mix

improved, but the increased volumes were not in

primary ro-ro trades. Due to increased cost, the

marginal high and heavy contribution was less

profitable," says Jan Eyvin Wang, president and CEO

of WWASA.

The contribution from the group's logistics

activities also declined: "Total income was on par

with the previous quarter. Increased revenue from

inland distribution services was offset by a decline

in contribution from Hyundai Glovis which had a

negative effect on profitability," says Wang.

"Despite a positive underlying growth potential for

our cargo segments, we expect the demand for deep sea

transportation of cars and high and heavy volumes to

be modest. In addition, an increased pressure on

margins for both shipping and logistics services is

evident. We will therefore continue to actively

optimise and adjust tonnage to market demand. Cost

efficiency programmes are also implemented in order

to offset potentially negative effects stemming from

suboptimal cargo and trade mixes," says Wang on

future prospects.

In accordance with seasonality, the board expects the

group's core activities to perform stronger in the

second quarter.

The Annual General Meeting (AGM) held 24 April 2014

resolved to pay a dividend of NOK 1 per share,

totalling USD 37 million, to be paid to shareholders

8 May 2014.