Wallenius Wilhelmsen

Earnings Release • Feb 9, 2017

Wilh. Wilhelmsen ASA: Results for the fourth quarter of 2016

Wilh. Wilhelmsen ASA: Results for the fourth quarter of 2016

2016 ended with an improvement in transported volumes,

which had a positive effect on total income for the

fourth quarter. Adjusted for non-recurring items,

WWASA also recorded an uplift in operating profit.

Rate pressure continues, but the group expects soft

volume recovery in the first half of 2017.

Total income for the fourth quarter was USD 450

million, up 8% from USD 418 million in the third

quarter. The operating profit ended at USD 4 million

due to non-recurring items, down from USD 32 million

in the previous quarter.

"The third quarter, which is usually negatively

affected by seasonality, was impacted additionally by

comprehensive strikes in Korea. In addition to a

seasonal improvement in the fourth quarter, the 7%

volume increase was positively affected by a general

improvement in transported volumes driven by increased

light vehicle sales in key markets and several

emerging markets. Yet, the cargo mix continued to be

suboptimal given our advanced fleet," says Jan Evyin

Wang, president and CEO of WWASA.

"The underlying results for the logistics segment

improved. However, due to internal cost allocations,

the operating profit was weaker compared with the

previous quarter," says Wang.

Non-recurring items totalling USD 37 million, mainly

caused by additional provisions related to anti-trust

investigations in Wallenius Wilhelmsen Logistics and

EUKOR Car Carriers, affected operating profit

negatively in the fourth quarter. Adjusted for non-

recurring items, the operating profit grew 28% quarter

on quarter.

Pressure on rates affects the car carrying

markets. "To mitigate the negative impact, we are

implementing a wide range of initiatives to optimise

our fleet to transportation demand," says Wang.

The planned merger between Wallenius and WWASA is

expected to be completed at the end of the first

quarter of 2017.

Commenting on the prospects for WWASA, Mr Wang

says: "Despite global political uncertainties, the

volume decline we have experienced for a long time

appears to have bottomed out. We expect a soft volume

recovery in the first half of 2017, but with continued

rate pressure."

The board expects the proposed merger and the

following effects to have long-term positive impact

for the group's competitiveness.