Wallenius Wilhelmsen

Earnings Release • Feb 10, 2016

Wilh. Wilhelmsen ASA (WWASA): Results for the fourth quarter of 2015

Wilh. Wilhelmsen ASA (WWASA): Results for the fourth quarter of 2015

Adjusted for non-recurring items, Wilh. Wilhelmsen

ASA's top line and operating profit declined slightly

compared with the previous quarter. Contribution from

the shipping segment increased, while the results from

the logistics segment declined.

WWASA's total income for the fourth quarter was USD

545 million, down from USD 558 million in the third

quarter.

"The volumes in the fourth quarter were on par with

the seasonally weak third quarter. While

transportation of cars improved, high and heavy

volumes dropped significantly, negatively affecting

the cargo mix. Lower bunker compensations and

continued pressure on rates also explain the decline

in total income," says Jan Evyin Wang, president and

CEO of WWASA, when commenting on the underlying

business performance in the fourth quarter.

The group's logistics activities had a negative impact

compared with previous quarters, mainly due to lower

income from Hyundai Glovis.

The fourth quarter operating result was USD 66

million. When adjusting for non-recurring items,

including the USD 200 million provision in the third

quarter related to anti-trust investigations in two

joint ventures, the operating profit was down 3%.

In the fourth quarter, EUKOR agreed with Hyundai Motor

Group to carry Hyundai/KIA vehicles from Korea for a

further four years.

"Being strategically important for the company's

profitability going forward, the agreement builds on

EUKOR's ambitions to be a global provider of quality

car carrying services for a diversified customer

base," says Wang.

Net financial costs ended at USD 13 million, up from a

net expense of USD 73 million in the previous quarter.

The improvement was mainly caused by unrealised gains

on financial derivatives used for hedging purposes.

Higher USD interest rates resulted in unrealised gains

on interest derivatives, partly offset by losses on

financial derivatives due to a stronger USD and the

decrease in bunker prices.

Auto volumes are forecasted to drop, while high and

heavy volumes are expected to recover from the

extraordinary weak level seen in the fourth quarter.

The market situation is anticipated to remain

challenging with continued pressure on profitability.

The new investments in logistics will have a positive

effect on operating profit. However, the proposed

restructuring of WWASA, where Den Norske Amerikalinje

AS (owning the 12% shareholding in Hyundai Glovis)

will be demerged from WWASA and carried forward in a

separately listed entity, will reduce the

contributions from the logistics segment.

With the proposed restructuring of WWASA, the board

proposes not to pay dividend in the second quarter for

the fiscal year 2015. The proposal will be resolved by

the annual general meeting on 3 May 2016.