Earnings Release • Feb 9, 2017
Earnings Release
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| 27 April | Annual general assembly |
|---|---|
| 10 May | Q1 2017 results |
| 11 May | Q1 2017 presentation |
| Total income | 2016 Q4 | 2016 Q3 2016 YTD 2015 YTD | 2015 Q4 | ||
|---|---|---|---|---|---|
| Total | 450 | 418 | 2.219 | 2.159 | 508 |
| Shipping | 365 | 337 | 1.431 | 1.800 | 433 |
| Logistics | 92 | 89 | 444 | 389 | 83 |
| Holding | 379 | 5 |
| EBITDA | 2016 Q4 | 2016 Q3 2016 YTD 2015 YTD | 2015 Q4 | ||
|---|---|---|---|---|---|
| Total | 43 | 69 | 728 | 262 | 108 |
| Shipping | 42 | 61 | 235 | 182 | 101 |
| Logistics | 9 | 11 | 133 | 88 | 8 |
| Holding | (9) | (2) | 359 | (8) | (2) |
| EBIT | 2016 Q4 | 2016 Q3 2016 YTD 2015 YTD | 2015 Q4 | ||
|---|---|---|---|---|---|
| Total | 4 | 32 | 580 | 103 | 66 |
| Shipping | 6 | 26 | 98 | 29 | 62 |
| Logistics | 6 | 8 | 122 | 82 | 6 |
| Holding | (9) | (2) | 359 | (8) | (2) |
| Net profit/(loss) after minority | (21) | 25 | 500 | (4) | 82 |
| Earnings per share (USD) | (0.09) | 0.11 | 2.27 | (0.02) | 0.37 |
The total income for the Wilh. Wilhelmsen ASA group (WWASA) was USD 450 million, up 8% from the third quarter 2016. The operating profit ended at USD 4 million, down from USD 32 million in the previous quarter.
The underlying result in the fourth quarter improved quarter on quarter with increased volumes in the shipping segment and positive contribution from the logistics segment.
The quarter was negatively affected by two larger non-recurring items. An additional provision of USD 31 million was made in relation to the ongoing antitrust investigations in joint venture companies EUKOR Car Carriers and Wallenius Wilhelmsen Logistics. In connection to the proposed merger, the company has recorded initial expenses related to severance pay and pensions of USD 6 million.
Adjusted for non-recurring items, total income and operating profit rebounded from USD 418 million and USD 32 million respectively in the third quarter to USD 450 million and USD 41 million in the fourth quarter.
The total income from the shipping segment was USD 365 million, up 8% from the previous quarter, while the operating profit totalled USD 6 million. Adjusted for non-recurring items the operating profit totalled USD 37 million.
WWASA's operating entities transported 16.2 million cubic metres (CBM) of cargo in the fourth quarter, a 7% increase quarter on quarter. Increased volumes in the fourth quarter had a positive effect on the operating profit. But the cargo mix and rate pressure continued to be unfavourable.
Net bunker cost was stable in the fourth quarter and for the full year. The bunker compensation (included in the total income) was slightly positive in the fourth quarter, but continued on a significantly lower level compared with the previous year.
Figure 1 Total income and EBIT (group)
Figure 2 Total income and EBIT (shipping)
In key markets, total light vehicle sales in the fourth quarter rose by 10% from the third quarter and increased by 5% compared with the same period last year. For the full year 2016, total light vehicle sales grew by 5% from 2015 and ended at a record high sale of 93 million units.
In the US, auto sales were relatively stable in the fourth quarter, with a 0.7% drop compared with the third quarter and a 0.5% increase compared with fourth quarter 2015. For the year full 2016, auto sales of 17.5 million units were 0.3% higher than what was recorded in 2015.
Sales in Western Europe in the fourth quarter were flat compared with the third quarter and 2% higher than sales in the fourth quarter 2015. In 2016, total auto sales grew 5.8% compared with 2015.
In Russia, the decline in the light vehicle market ended in the fourth quarter, although sales for the year were down 12% compared with 2015.
Chinese car sales were very strong in the fourth quarter. Total sales in 2016 were 28 million units, 12% higher than in 2015.
Japanese car exports developed positively in the fourth quarter with a 13% growth quarter on quarter and a 6% increase year over year. For the full year, 4.2 million units were exported from Japan, which is 3% more than in 2015.
Car exports out of Korea in the fourth quarter were 28% higher quarter on quarter, however 11% lower year over year. For the whole year of 2016, Korean car exports were 2.5 million units, 13% down from 2015.
The global construction equipment market continued its overall relatively soft development in the fourth quarter. Analysts' market outlook for 2017 is positive, supported by various industry indices indicating expanding global demand for heavy machinery.
The global demand for mining equipment remained flat at a low level in the fourth quarter. Commodity prices rose sharply in the last months of 2016. Analysts forecast further consolidation of the mining industry.
Global demand for agriculture equipment continued the weak trend in the fourth quarter compared with 2015. Analysts forecast 2017 equipment demand to be flat.
The total income and operating profit were USD 92 million and USD 6 million respectively. Due to internal cost allocations, the operating profit was weaker compared with the previous quarter. However, underlying results improved.
Contribution from all logistic sub-segments (terminals, technical services and inland distribution) were higher quarter on quarter.
Net financial expenses amounted to USD zero million both in the forth quarter and the previous quarter, positively affected by unrealised gains from financial instruments.
Net interest expenses totalled USD 24 million including a realised loss on interest instruments, stable from the previous quarter. WWASA recorded an unrealised gain of USD 30 million on interest rate derivatives compared with an unrealised gain of USD 11 million in the third quarter. At the end of the fourth quarter, the investment portfolio amounted to USD 202 million, including fixed income assets and shares. The portfolio generated a positive return, well ahead of the benchmark, mainly as a result of solid return on the equity portfolio and a further narrowing of credit spreads.
During the quarter, the USD appreciated towards EUR and NOK. Net currency items for the quarter amounted to a loss of USD 16 million. Currency translation gains were more than offset by losses on hedging contracts in the fourth quarter, particularly connected to repayment of a NOK bond.
The group recorded an expense of USD 24 million for the quarter, up compared with a tax expense of USD 6 million in third quarter.
Net loss after tax and minority interest amounted to USD 21 million, down from net profit of USD 25 million. Earnings per share were negative USD 0.09 for the fourth quarter, down from USD 0.11 in the third quarter.
Cash and cash equivalents including the investment portfolio decreased from the previous quarter, totalling USD 283 million at the end of the fourth quarter (USD 464 million when including the group's share of cash and cash equivalents in the joint ventures).
WWASA's equity decreased from the previous quarter by USD 20 million to USD 1 435 million, representing an equity ratio of 48% based on book value for WWASA's own account.
The group's gross interest-bearing debt amounted to USD 1 320 million (USD 2 081 million when including share of interest-bearing debt in joint ventures) at the end of the quarter, equivalent to a decrease of 8% quarter on quarter.
In the fourth quarter WWASA repaid bonds maturing in the amount of NOK 575 million or USD 70 million. In connection with the bond maturity, WWASA realised a loss of USD 18 million on the portfolio of cross currency derivatives as notional NOK 400 million matured.
With the proposed merger of WWASA and Wallroll AB, the board of Wallenius Wilhelmsen Logistics ASA will communicate a future dividend policy.
At the end of the year, the global fleet of pure car and truck carriers stood at approximately 720 vessels, with a combined lifting capacity of 3.9 million CEU.
Four vessels entered service and seven ships were sold for recycling, resulting in a net reduction of three vessels corresponding to 13 000 CEU.
Two new orders were reported in the quarter. The global orderbook counted approximately 60 vessels and 390 000 CEU, corresponding to approximately 10% of the fleet.
Negotiations to postpone deliveries and/or cancel vessels on order are reported.
Worldwide, 29 car carriers with total capacity of 150 000 CEU were recycled in 2016.
Approximately 3% of the global fleet are 28 years or older.
The group's fleet stands out in terms of average size and capability to lift high and heavy cargoes. This makes our operating companies well positioned to lift all types of rolling cargoes.
The group reduced its operated fleet from 130 to 127 vessels in the fourth quarter. 78 vessels are owned, 24 by WWASA.
One vessel was sold for green recycling while two were redelivered to external owners. None of the vessels were for WWASA's account.
WWL: 51 vessels, 369 000 CEU EUKOR: 70 vessels, 463 000 CEU ARC: 6 vessels, 34 000 CEU
The combined lifting capacity of the group was reduced by approximately 20 000 CEU in the quarter, and at the turn of the year, the group had a combined lifting capacity is 865 000 CEU.
The group controlled approximately 22% of the global fleet.
The group has six vessels under construction at shipyards in China and Korea. All six vessels are large Post-Panamax, also known as Neo-Panamax, with a lifting capacity of approximately 8 000 CEU each.
Four vessels are on order by Wallenius Lines while two are under construction for EUKOR.
Four vessels are expected to enter service in 2017 with the final two deliveries scheduled for early 2018.
No new orders were placed by the group in the fourth quarter.
The group has 20 vessels on short charter arrangements and has the flexibility to redeliver another nine vessels in 2017.
For the fourth quarter, the 28 vessels monitored and analysed by WWASA consumed 60.1 thousand tonnes fuel and carried out 3 492 million tonne miles2 of transport work. This was equal to 17.2 gram fuel consumed per cargo tonne miles up from 16.5 gram per tonne mile quarter on quarter. The overall transport efficiency decreased as the transport work was slightly down compared with previous quarter.
Correspondingly, the emitted CO2 was 53.5 gram per cargo tonnes-miles3, up from 51.4 quarter on quarter.
There were no environmental incidents in the fourth quarter. The fleet had 33 port state controls, up from 23 in the previous quarter. No vessels were detained and the deficiency rate indicates that the fleet is managed according to the group's standards.
The group's controlled vessels recorded three incidents resulting in lost working time. The LTIF ratio of 2.1 for the fourth quarter, was above the groups target.
1 HSEQ reporting is based on vessels owned and controlled by WWASA.
2 Measures number of tonnes by distance transported. For sea voyage reports at noon.
3 The International Maritime Organisation measures energy efficiency as grams of CO2 per tonne nautical mile.
Additional provisions of USD 31 million for WWASA's share have been made related to anti-trust investigations in joint venture companies. This totals a provision of USD 231 million when including the provision made in the third quarter of 2015.
The ongoing investigations of WWL and EUKOR are confidential. WWASA is therefore not in a position to comment on the remaining investigations. The processes are expected to continue to take time, but further clarifications are expected during 2017.
Wilhelmsen and Wallenius have signed an agreement leading to a new ownership structure for their jointly owned investments in Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Roll on Roll off Carrier. The extraordinary general meetings of the respective owning companies have approved the proposed merger.
The completion of the merger is pending approval from competition authorities, which is expected during April 2017.
In mature markets, auto sales are expected to remain flat while the outlook for the emerging markets is mixed. Overall, the expectations are slightly positive.
Global construction, mining and agriculture equipment sales are forecasted to remain stable at a low level.
WWASA will issue shares to Wallenius in exchange for their shares in the currently joint investments. At the completion of the merger, Wilhelmsen and Wallenius will hold respectively 37.8% and 48% of the new entity to be named Wallenius Wilhelmsen Logistics ASA. The parties have agreed that Wallenius will reduce its shareholding subsequent to the merger, whereby both parties eventually will have an equal shareholding in the new entity. For a full description of the transaction agreement, please refer to the Stock Exchange Notice from WWASA dated 22 December 2016.
In addition to establishing a common owner and governance structure, the proposed merger is expected to enable synergies in the high end of a USD 50-100 million range by combining the assets and harvesting economies of scale, including more optimal tonnage planning, and administrative, commercial and operational efficiencies between the entities.
With continued rate pressure, the volume decline appears to have bottomed out and the board expects a soft volume recovery in the first half of 2017.
In addition, the board expects the proposed merger and the following effects, to have positive long-term impact for the group's competitiveness.
Lysaker, 9 February 2017 The board of directors of Wilh. Wilhelmsen ASA
Forward-looking statements presented in this report are based on various assumptions. The assumptions were reasonable when made, but are inherently subject to uncertainties and contingencies that are difficult or impossible to predict. WWASA cannot give assurances that expectations regarding the outlook will be achieved or accomplished.
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | Full | Full | Full | Full | |||||||||||
| Q4 | Q4 | year | Q4 | Q4 | year | Q4 | Q4 | year | Q4 | Q4 | year | Q4 | Q4 | year | |
| QUARTER | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 |
| Operating revenue | 365 | 430 | 1 793 | 92 | 81 | 331 | 1 | 1 | 5 | (8) | (9) | (34) | 450 | 504 | 2 095 |
| Other income | |||||||||||||||
| Share of profit/(loss) from | |||||||||||||||
| associates | 5 | 1 | 31 | 2 | 36 | ||||||||||
| Gain on sale of assets | 2 | 2 | 26 | 2 | 29 | ||||||||||
| Total income | 365 | 433 | 1 800 | 92 | 83 | 389 | 1 | 1 | 5 | (8) | (9) | (34) | 450 | 508 | 2 159 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (171) | (193) | (847) | 7 | 8 | 29 | (164) | (184) | (818) | ||||||
| Vessel expenses | (18) | (18) | (85) | (18) | (18) | (85) | |||||||||
| Charter expenses | (65) | (76) | (316) | (65) | (76) | (316) | |||||||||
| Employee benefits | (31) | (33) | (125) | (10) | (9) | (36) | (5) | (2) | (7) | (47) | (44) | (168) | |||
| Other expenses | (39) | (12) | (245) | (72) | (66) | (265) | (4) | (1) | (6) | 1 | 1 | 5 | (114) | (77) | (510) |
| Depreciation and impairment | (35) | (40) | (153) | (3) | (2) | (6) | (0) | (38) | (41) | (160) | |||||
| Total operating expenses | (359) | (371) | (1 771) | (86) | (76) | (307) | (9) | (3) | (14) | 8 | 9 | 34 | (446) | (441) | (2 057) |
| Operating profit/(loss) (EBIT)2 | 6 | 62 | 29 | 6 | 6 | 82 | (9) | (2) | (8) | (0) | (0) | (0) | 4 | 66 | 103 |
| Financial income/(expenses) | 2 | (7) | (72) | (3) | (1) | (6) | (5) | (50) | (13) | (128) | |||||
| Profit/(loss) before tax | 9 | 54 | (43) | 4 | 5 | 76 | (9) | (7) | (58) | (0) | (0) | (0) | 4 | 53 | (25) |
| Tax income/(expense) | (15) | 18 | 4 | (3) | 1 | (5) | (5) | 11 | 24 | (24) | 30 | 23 | |||
| Profit/(loss) | (6) | 72 | (39) | 0 | 6 | 71 | (14) | 4 | (34) | (0) | (0) | (0) | (20) | 82 | (3) |
| Of which minority interest | (1) | (1) | (1) | (1) | |||||||||||
| Profit/(loss) after minority | |||||||||||||||
| interest | (7) | 72 | (39) | (0) | 6 | 69 | (14) | 4 | (34) | (0) | (0) | (0) | (21) | 82 | (4) |
1 The report is based on the proportionate method for all joint ventures.
The equity method provides a fair presentation of the group's financial position but the group's internal financial reporting is based on the proportionate method. The major contributors in the shipping and logistics segments are joint ventures and hence the proportionate method gives the chief operating decision-maker a higher level of information and a better picture of the group's operations.
2 Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
2016: Material gain/(loss) from disposal of assets and impairment charges
Logistics: 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).
Shipping: Q1 Loss of USD 3.5 million related to recycling of three vessels.
Shipping: Q2 Loss of USD 1.5 million related to recycling of one vessel.
Holding: Q2 The demerger of Den Norske Amerikalinje AS (owns the Hyundai Glovis shareholding) contributed with a non-recurring gain of USD 375 million in the second quarter.
Shipping: Q3 No material gain/(loss)
Shipping: Q3 No material gain/(loss)
2015: Material gain/(loss) from disposal of assets and impairment charges
Logistics: Q1 WWASA sold 187 500 shares in Hyundai Glovis. The net gain recorded in the group's accounts amounted to USD 26 million.
Shipping: Q2 No material gain/(loss)
Shipping: Q3 Impairment loss vessel for recycling USD 2.5 million.
Shipping: Q4 An accounting gain of USD 1.9 million as a result of a step acquisition in Armacup.
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| YTD | YTD | YTD | YTD | YTD | YTD | YTD | YTD | YTD | YTD | ||
| Year to date | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |
| Operating revenue | 1 430 | 1 793 | 352 | 331 | 4 | 5 | (34) | (34) | 1 751 | 2 095 | |
| Other income | |||||||||||
| Share of profit/(loss) from | |||||||||||
| associates | 2 | 5 | 12 | 31 | 13 | 36 | |||||
| Gain on sale of assets | 2 | 80 | 26 | 375 | 455 | 29 | |||||
| Total income | 1 431 | 1 800 | 444 | 389 | 379 | 5 | (34) | (34) | 2 219 | 2 159 | |
| Operating expenses | |||||||||||
| Voyage expenses | (669) | (847) | 30 | 29 | (638) | (818) | |||||
| Vessel expenses | (77) | (85) | (77) | (85) | |||||||
| Charter expenses | (260) | (316) | (260) | (316) | |||||||
| Employee benefits | (119) | (125) | (42) | (36) | (10) | (7) | (170) | (168) | |||
| Other expenses | (72) | (245) | (269) | (265) | (9) | (6) | 4 | 5 | (346) | (510) | |
| Depreciation and impairment | (137) | (153) | (11) | (6) | (0) | (0) | (148) | (160) | |||
| Total operating expenses | (1 333) | (1 771) | (322) | (307) | (20) | (14) | 34 | 34 | (1 640) | (2 057) | |
| Operating profit/(loss) (EBIT)2 | 98 | 29 | 122 | 82 | 359 | (8) | 0 | (0) | 580 | 103 | |
| Financial income/(expenses) | (30) | (72) | (1) | (6) | (5) | (50) | (37) | (128) | |||
| Profit/(loss) before tax | 68 | (43) | 121 | 76 | 354 | (58) | 0 | (0) | 543 | (25) | |
| Tax income/(expense) | (21) | 4 | (13) | (5) | (5) | 24 | (39) | 23 | |||
| Profit/(loss) | 47 | (39) | 108 | 71 | 349 | (34) | 0 | (0) | 504 | (3) | |
| Of which minority interest | (2) | (2) | (1) | (4) | (1) | ||||||
| Profit/(loss) after minority | |||||||||||
| interest | 45 | (39) | 106 | 69 | 349 | (34) | 0 | (0) | 500 | (4) |
1/2 Comments - see previous page
2016: Material gain/(loss) from disposal of assets and impairment charges
Logistics: 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).
Shipping: Q1 Loss of USD 3.5 million related to recycling of three vessels.
Shipping: Q2 Loss of USD 1.5 million related to recycling of one vessel.
Holding: Q2 The demerger of Den Norske Amerikalinje AS (owns the Hyundai Glovis shareholding) contributed with a non-recurring gain of USD 375 million in the second quarter.
Shipping: Q3 No material gain/(loss)
Shipping: Q4 No material gain/(loss)
2015: Material gain/(loss) from disposal of assets and impairment charges
Logistics: Q1 WWASA sold 0.5% shareholding in Hyundai Glovis. The net gain recorded in the group's accounts amounted to USD 26 million. > Shipping: Q2 - No material gain/(loss)
Shipping: Q3 Impairment loss vessel for recycling USD 2.5 million.
Shipping: Q4 - An accounting gain of USD 1.9 million as a result of a step acquisition in Armacup.
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Total incl elimination | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| QUARTER | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 |
| Operating revenue | 356 | 372 | 337 | 365 | 83 | 88 | 89 | 92 | 1 | 1 | 1 | 1 | 432 | 452 | 418 | 450 |
| Other income | ||||||||||||||||
| Share of profit/(loss) from | ||||||||||||||||
| associates | 1 | 12 | 13 | |||||||||||||
| Gain on sale of assets | 80 | 375 | 80 | 375 | ||||||||||||
| Total income | 357 | 372 | 337 | 365 | 175 | 88 | 89 | 92 | 1 | 376 | 1 | 1 | 525 | 827 | 418 | 450 |
| Operating expenses | ||||||||||||||||
| Voyage expenses | (167) | (168) | (162) | (171) | (160) | (160) | (155) | (164) | ||||||||
| Vessel expenses | (20) | (20) | (19) | (18) | (20) | (20) | (19) | (18) | ||||||||
| Charter expenses | (67) | (69) | (59) | (65) | (67) | (69) | (59) | (65) | ||||||||
| Employee benefits | (31) | (28) | (29) | (31) | (10) | (10) | (10) | (10) | (2) | (2) | (2) | (5) | (43) | (40) | (41) | (47) |
| Other expenses | (10) | (16) | (8) | (39) | (63) | (66) | (68) | (72) | (1) | (3) | (1) | (4) | (73) | (83) | (76) | (114) |
| Depreciation and impairment | (33) | (34) | (34) | (35) | (1) | (4) | (3) | (3) | (35) | (38) | (37) | (38) | ||||
| Total operating expenses | (329) | (334) | (311) | (359) | (74) | (81) | (81) | (86) | (3) | (4) | (3) | (9) | (398) | (410) | (386) | (446) |
| Operating profit/(loss) (EBIT)2 | 28 | 38 | 26 | 6 | 100 | 8 | 8 | 6 | (2) | 372 | (2) | (9) | 126 | 417 | 32 | 4 |
| Financial income/(expenses) | (17) | (10) | (5) | 2 | 2 | (1) | 1 | (3) | (9) | 4 | (15) | (21) | ||||
| Profit/(loss) before tax | 11 | 28 | 21 | 9 | 102 | 6 | 9 | 4 | (2) | 363 | 2 | (9) | 111 | 396 | 32 | 4 |
| Tax income/(expense) | (4) | (3) | (15) | (3) | (3) | (3) | (3) | (5) | (6) | (3) | (6) | (24) | ||||
| Profit/(loss) | 7 | 28 | 19 | (6) | 99 | 3 | 6 | 0 | (1) | 363 | 1 | (14) | 105 | 393 | 26 | (20) |
| Of which minority interest | (1) | (1) | (1) | (1) | (1) | |||||||||||
| Profit/(loss) after minority | ||||||||||||||||
| interest | 7 | 27 | 18 | (7) | 99 | 2 | 5 | (0) | (1) | 363 | 1 | (14) | 104 | 392 | 25 | (21) |
1/2 Comments - see previous page
Joint ventures based on proportionate method
| USD mill | 01.10-31.12 | 01.10-31.12 | YTD | YTD |
|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | |
| Financials | ||||
| Investment management 1 | 5.5 | 2.3 | 11.3 | 2.1 |
| Interest income | 1.7 | 1.0 | 6.9 | 3.7 |
| Other financial items | 0.7 | (0.8) | 0.8 | (12.0) |
| Net financial items | 7.8 | 2.5 | 19.1 | (6.3) |
| Net financials - interes rate | ||||
| Interest expenses | (17.5) | (15.0) | (68.4) | (57.3) |
| Interest rate derivatives - realised | (6.9) | (8.6) | (29.6) | (34.1) |
| Net interest expenses | (24.4) | (23.5) | (98.0) | (91.4) |
| Interest rate derivatives - unrealised | 30.0 | 19.7 | 25.1 | 24.3 |
| Net financial - currency | ||||
| Net currency gain/(loss) | (2.1) | 3.1 | (13.2) | 11.7 |
| Derivatives for hedging of cash flow risk - realised | (9.8) | (7.1) | (22.6) | (1.8) |
| Derivatives for hedging of cash flow risk - unrealised | 7.7 | 2.2 | 38.6 | (25.6) |
| Derivatives for hedging of translation risk - realised | (18.3) | (0.3) | (19.9) | (11.5) |
| Derivatives for hedging of translation risk - unrealised | 6.7 | (6.5) | 27.1 | (21.4) |
| Net currency items | (15.8) | (8.5) | 10.1 | (48.7) |
| Financial derivaties bunkers | ||||
| Valuation of bunker hedges | 2.4 | (3.7) | 9.3 | (6.3) |
| Realised portion of bunker hedges | (0.3) | (2.2) | ||
| Net financial derivatives bunkers | 2.1 | (3.7) | 7.1 | (6.3) |
| Financial income/(expenses) | (0.3) | (13.5) | (36.6) | (128.3) |
1 Includes financial derivatives for trading
| USD mill | 01.10-31.12 | 01.10-31.12 | YTD | YTD |
|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | |
| Cash settled portion of bunker and fuel hedges | 0.2 | (2.6) | (5.4) | (5.3) |
Joint ventures based on proportionate method
After WWL acquired the full ownership of WWL Vehicle Services Americas (VSA), the group has reviewed and analyzed the past accounting and reporting practices. For Inland Distribution Nissan compensates VSA for procurement and process management with a fixed fee leaving no business risk with VSA. In the past this was accounted for on a gross basis in the WWASA consolidated figures. Going forward this is considered "pass through" revenues/costs and will therefore be accounted for on a net basis. As per third quarter 2016 the accounting practice has changed, and previous reported figures have been restated accordingly.
The Q1 and Q2 2016 figures are restated and showed below, while 2015 figures are restated and showed on the next page.
These revenues/costs are a part of the group revenue/cost in the Income statement based on proportionate consolidation for joint ventures. The adjustments have no effect on EBIT or net profit.
| As reported | Restated figures | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | Logistics | Total incl elimination | Restatement | Logistics | Total incl elimination | |||||
| Q1 | Q2 | Q1 | Q2 | Q1 | Q2 | Q1 | Q2 | Q1 | Q2 | |
| QUARTER | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 |
| Operating revenue | 167 | 167 | 515 | 530 | (84) | (78) | 83 | 88 | 432 | 452 |
| Other income | ||||||||||
| Share of profit from | ||||||||||
| associates | 12 | 13 | 12 | 13 | ||||||
| Gain on sale of assets | 80 | 80 | 375 | 80 | 80 | 375 | ||||
| Total income | 259 | 167 | 608 | 905 | (84) | (78) | 175 | 88 | 525 | 827 |
| Operating expenses | ||||||||||
| Voyage expenses | (160) | (160) | (160) | (160) | ||||||
| Vessel expenses | (20) | (20) | (20) | (20) | ||||||
| Charter expenses | (67) | (69) | (67) | (69) | ||||||
| Employee benefits | (10) | (10) | (43) | (40) | (10) | (10) | (43) | (40) | ||
| Other expenses | (146) | (145) | (157) | (162) | 84 | 78 | (63) | (66) | (73) | (83) |
| Depreciation and | ||||||||||
| impairment | (1) | (4) | (35) | (38) | (1) | (4) | (35) | (38) | ||
| Total operating | ||||||||||
| expenses | (158) | (159) | (482) | (488) | 84 | 78 | (74) | (81) | (398) | (410) |
| Operating profit | ||||||||||
| (EBIT) 2 | 100 | 8 | 126 | 417 | 0 | 0 | 100 | 8 | 126 | 417 |
| Financial | ||||||||||
| income/(expenses) | 2 | (1) | (15) | (21) | 2 | (1) | (15) | (21) | ||
| Profit/(loss) before | ||||||||||
| tax | 102 | 6 | 111 | 396 | 0 | 0 | 102 | 6 | 111 | 396 |
| Tax income/(expense) | (3) | (3) | (6) | (3) | (3) | (3) | (6) | (3) | ||
| Profit/(loss) | 99 | 3 | 105 | 393 | 0 | 0 | 99 | 3 | 105 | 393 |
| Of which minority | ||||||||||
| interest | (1) | (1) | ||||||||
| Profit/(loss) after | ||||||||||
| minority interest | 99 | 2 | 104 | 392 | 0 | 0 | 99 | 2 | 104 | 392 |
1 The report is based on the proportionate method for all joint ventures.
2 Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
Joint ventures based on proportionate method
After WWL acquired the full ownership of WWL Vehicle Services Americas (VSA), the group has reviewed and analyzed the past accounting and reporting practices. For Inland Distribution Nissan compensates VSA for procurement and process management with a fixed fee leaving no business risk with VSA. In the past this was accounted for on a gross basis in the WWASA consolidated figures. Going forward this is considered "pass through" revenues/costs and will therefore be accounted for on a net basis. As per third quarter 2016 the accounting practice has changed, and previous reported figures have been restated accordingly.
The 2015 figures are restated and showed below, while the Q1 and Q2 2016 figures are restated and showed on the previous page.
These revenues/costs are a part of the group revenue/cost in the Income statement based on proportionate consolidation for joint ventures. The adjustments have no effect on EBIT or net profit.
| As reported | Restated figures Total incl elimination |
|||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | Logistics | Total incl elimination | Restatement | Logistics | ||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| QUARTER | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 2015 2015 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||
| Operating revenue | 121 | 123 | 117 | 118 | 573 | 583 | 546 | 541 | (38) | (38) | (36) | (37) | 83 | 85 | 82 | 81 | 535 | 545 | 511 | 504 |
| Other income | ||||||||||||||||||||
| Share of profit from | ||||||||||||||||||||
| associates | 7 | 11 | 11 | 1 | 9 | 14 | 12 | 2 | 7 | 11 | 11 | 1 | 9 | 14 | 12 | 2 | ||||
| Gain on sale of assets | 26 | 26 | 2 | 26 | 26 | 2 | ||||||||||||||
| Total income | 155 | 134 | 129 | 120 | 609 | 596 | 558 | 545 | (38) | (38) | (36) | (37) | 117 | 96 | 93 | 83 | 571 | 559 | 522 | 508 |
| Operating expenses | ||||||||||||||||||||
| Voyage expenses | (215) | (217) | (202) | (184) | (215) | (217) | (202) | (184) | ||||||||||||
| Vessel expenses | (23) | (22) | (23) | (18) | (23) | (22) | (23) | (18) | ||||||||||||
| Charter expenses | (79) | (84) | (76) | (76) | (79) | (84) | (76) | (76) | ||||||||||||
| Employee benefits | (9) | (9) | (9) | (9) | (41) | (42) | (40) | (44) | (9) | (9) | (9) | (9) | (41) | (42) | (40) | (44) | ||||
| Other expenses | (104) | (106) | (101) | (103) | (115) | (119) | (310) | (114) | 38 | 38 | 36 | 37 | (66) | (68) | (65) | (66) | (77) | (81) | (275) | (77) |
| Depreciation and | ||||||||||||||||||||
| impairment | (2) | (2) | (1) | (2) | (38) | (40) | (41) | (41) | (2) | (2) | (1) | (2) | (38) | (40) | (41) | (41) | ||||
| Total operating | ||||||||||||||||||||
| expenses | (115) | (116) | (111) | (113) | (511) | (523) | (692) | (478) | 38 | 38 | 36 | 37 | (77) | (79) | (75) | (76) | (473) | (486) | (657) | (441) |
| Operating profit | ||||||||||||||||||||
| (EBIT) 2 | 40 | 18 | 18 | 6 | 98 | 73 | (134) | 66 | 0 | 0 | 0 | 0 | 40 | 18 | 18 | 6 | 98 | 73 | (134) | 66 |
| Financial | ||||||||||||||||||||
| income/(expenses) | (1) | (1) | (2) | (1) | (46) | 4 | (73) | (13) | (1) | (1) | (2) | (1) | (46) | 4 | (73) | (13) | ||||
| Profit/(loss) before | ||||||||||||||||||||
| tax | 39 | 17 | 15 | 5 | 52 | 77 | (207) | 53 | 0 | 0 | 0 | 0 | 39 | 17 | 15 | 5 | 52 | 77 | (207) | 53 |
| Tax income/(expense) | (2) | (2) | (2) | 1 | 5 | (7) | (5) | 30 | (2) | (2) | (2) | 1 | 5 | (7) | (5) | 30 | ||||
| Profit/(loss) | 37 | 14 | 13 | 6 | 57 | 70 | (212) | 82 | 0 | 0 | 0 | 0 | 37 | 14 | 13 | 6 | 57 | 70 | (212) | 82 |
| Of which minority | ||||||||||||||||||||
| interest | ||||||||||||||||||||
| Profit/(loss) after | ||||||||||||||||||||
| minority interest | 37 | 14 | 13 | 6 | 56 | 70 | (213) | 82 | 0 | 0 | 0 | 0 | 37 | 14 | 13 | 6 | 56 | 70 | (213) | 82 |
1 The report is based on the proportionate method for all joint ventures.
2 Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
Wilh. Wilhelmsen ASA group Q4 2016 Unaudited 17 of 32
| 2016 Q4 | 2016 Q3 | 2016 YTD | 2015 YTD | 2015 Q4 | |
|---|---|---|---|---|---|
| Total income | 50 | 74 | 751 | 267 | 107 |
| EBITDA | 14 | 44 | 620 | 140 | 78 |
| EBIT | (7) | 24 | 539 | 60 | 58 |
| Net profit/(loss) | (21) | 25 | 500 | (4) | 82 |
| Earnings per share (USD) | (0.09) | 0.11 | 2.27 | (0.02) | 0.37 |
The operating loss was USD 7 million based on a total income of 50 million, down from a profit of USD 24 million and USD 74 million respectively in the third quarter.
The quarter was negatively affected by two larger non-recurring items. An additional provision of USD 31 million was made in relation to the ongoing anti-trust investigations in joint venture companies EUKOR Car Carriers and Wallenius Wilhelmsen Logistics. In connection to the proposed merger, the company has recorded initial expenses related to severance pay and pensions of USD 6 million.
Adjusted for non-recurring items, total income increased from USD 74 million in the third quarter to USD 83 million this quarter, and operating profit in the fourth quarter was USD 29 million, compared with USD 24 million in the previous quarter.
Group loss before tax amounted to USD 2 million, down from a profit of USD 26 million in the third quarter.
With a tax expense of USD 18 million for the fourth quarter, the net loss after tax ended at USD 21 million, down from a profit of USD 25 million in the third quarter.
Net financial income in the fourth quarter amounted to USD 5 million compared with an income of USD 3 million in the previous quarter, positively affected by net unrealised gains on financial instruments.
Net interest expenses in the period totalled USD 17 million, remaining at the same level as the previous quarter.
Net currency items for the quarter amounted to a loss of USD 13 million against a gain of USD 8 million in the previous quarter. During the quarter, the USD depreciated towards EUR and NOK. Unrealised gains incurred on hedging contracts, were partly offset by realised losses on hedging contracts in the third quarter.
For the full year 2016, the group's total income was USD 751 million compared with USD 267 million in 2015. The operating profit totalled USD 539 million (USD 60 million). Both total income and operating profit were impacted by large nonrecurring items. Adjusted for these items, WWASA's year-end total income was USD 331 million (USD 238 million), while operating profit was USD 126 million (USD 235 million). For the full year, the financial expense totalled USD 17 million, a solid improvement from an expense of USD 98 million the previous year. Group profit before tax amounted to USD 522 million, compared with a loss of USD 38 million in 2015. For 2016, the group recorded a tax expense of USD 22 million compared with an income of USD 33 million in 2015. Net profit amounted to USD 500 million compared with a loss of USD 4 million last year.
Additional provisions of USD 31 million for WWASA's share have been made related to anti-trust investigations in joint venture companies. This totals a provision of USD 231 million when including the provision made in the third quarter of 2015.
The ongoing investigations of WWL and EUKOR are confidential. WWASA is therefore not in a position to comment on the remaining investigations. The processes are expected to continue to take time, but further clarifications are expected during 2017.
New ownership structure for joint ventures
Wilhelmsen and Wallenius have signed an agreement leading to a new ownership structure for their jointly owned investments in Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Roll on Roll off Carrier. The extraordinary general meetings of the respective owning companies have approved the proposed merger.
The completion of the merger is pending approval from competition authorities, which is expected during April of 2017.
With the proposed merger of WWASA and Wallroll AB, the board of Wallenius Wilhelmsen Logistics ASA will communicate a future dividend policy.
WWASA will issue shares to Wallenius in exchange for their shares in the currently joint investments. At the completion of the merger, Wilhelmsen and Wallenius will hold respectively 37.8% and 48% of the new entity to be named Wallenius Wilhelmsen Logistics ASA. The parties have agreed that Wallenius will reduce its shareholding subsequent to the merger, whereby both parties eventually will have an equal shareholding in the new entity. For a full description of the transaction agreement, please refer to the Stock Exchange Notice from WWASA dated 22 December 2016.
In addition to establishing a common owner and governance structure, the proposed merger is expected to enable synergies in the high end of a USD 50-100 million range by combining the assets and harvesting economies of scale, including more optimal tonnage planning, and administrative, commercial and operational efficiencies between the entities.
In mature markets, auto sales are expected to remain flat while the outlook for the emerging markets is mixed. Overall, the expectations are slightly positive.
Global construction, mining and agriculture equipment sales are forecasted to remain stable at a low level.
With continued rate pressure, the volume decline appears to have bottomed out and the board expects a soft volume recovery in the first half of 2017.
In addition, the board expects the proposed merger and the following effects, to have positive long-term impact for the group's competitiveness.
Lysaker, 9 February 2017 The board of directors of Wilh. Wilhelmsen ASA
Forward-looking statements presented in this report are based on various assumptions. The assumptions were reasonable when made, but are inherently subject to uncertainties and contingencies that are difficult or impossible to predict. WWASA cannot give assurances that expectations regarding the outlook will be achieved or accomplished.
| USD mill | Notes | 01.10-31.12 | 01.10-31.12 | YTD | YTD |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | ||
| Operating revenue | 66 | 81 | 257 | 313 | |
| Other income | |||||
| Share of profit/(loss) from joint ventures and associates | (16) | 26 | 119 | (72) | |
| Gain on sale of assets | 2 | 375 | 27 | ||
| Total income | 50 | 107 | 751 | 267 | |
| Operating expenses | |||||
| Vessel expenses | (9) | (8) | (36) | (42) | |
| Charter expenses | (7) | (6) | (25) | (22) | |
| Employee benefits | (15) | (13) | (51) | (52) | |
| Other expenses | (6) | (3) | (18) | (11) | |
| Depreciation and impairment | 3 | (21) | (20) | (81) | (80) |
| Total operating expenses | (57) | (50) | (212) | (207) | |
| Operating profit/(loss) (EBIT) | (7) | 58 | 539 | 60 | |
| Financial income/(expenses) | 4 | 5 | (8) | (17) | (98) |
| Profit/(loss) before tax | (2) | 50 | 522 | (38) | |
| Tax income/(expense) | (18) | 32 | (22) | 33 | |
| Profit/(loss) for the period attributable to the owners of the parent | (21) | 82 | 500 | (4) | |
| Basic and diluted earnings per share (USD)* | (0.09) | 0.37 | 2.27 | (0.02) |
* EPS is calculated based on 220 000 000 shares.
| USD mill | Notes | 01.10-31.12 2016 |
01.10-31.12 2015 |
YTD 2016 |
YTD 2015 |
|---|---|---|---|---|---|
| Profit/(loss) for the period | (21) | 82 | 500 | (4) | |
| Other comprehensive income | |||||
| Items that may be subsequently reclassified to the income statement | |||||
| Cash flow hedges in joint venture, net of tax | 2 | (6) | 12 | (7) | |
| Currency translation differences in joint venture | (2) | (1) | (2) | (5) | |
| Items that will not be reclassified to the income statement | |||||
| Remeasurement postemployment benefits, net of tax | 1 | 5 | 1 | 5 | |
| Other comprehensive income, net of tax | 1 | (2) | 10 | (8) | |
| Total comprehensive income attributable to owners of the parent | (20) | 80 | 510 | (12) |
The above consolidated income statement and comprehensive income should be read in conjunction with the accompanying notes.
| USD mill | Notes | 31.12.2016 | 31.12.2015 |
|---|---|---|---|
| ASSETS | |||
| Non current assets | |||
| Deferred tax assets | 55 | 66 | |
| Goodwill and other intangible assets | 3 | 6 | 6 |
| Investments in vessels and other tangible assets | 3 | 1 879 | 1 827 |
| Investments in joint ventures and associates | 768 | 1 025 | |
| Other non current assets | 1 | 1 | |
| Total non current assets | 2 708 | 2 925 | |
| Current assets | |||
| Current financial investments | 202 | 242 | |
| Other current assets | 22 | 24 | |
| Cash and cash equivalents | 81 | 108 | |
| Total current assets | 305 | 373 | |
| Total assets | 3 013 | 3 299 | |
| EQUITY and LIABILITIES | |||
| Equity | |||
| Share capital | 6 | 16 | 30 |
| Retained earnings and other reserves | 1 419 | 1 624 | |
| Total equity attributable to owners of the parent | 1 435 | 1 655 | |
| Non current liabilities | |||
| Pension liabilities | 40 | 42 | |
| Non current interest-bearing debt | 8 | 1 205 | 1 135 |
| Other non current liabilities | 128 | 183 | |
| Total non current liabilites | 1 374 | 1 359 | |
| Current liabilities | |||
| Current income tax liabilities | 7 | 3 | |
| Public duties payable | 1 | 1 | |
| Other current liabilities | 197 | 281 | |
| Total current liabilities | 204 | 285 | |
| Total equity and liabilities | 3 013 | 3 299 | |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | Note 01.10-31.12 |
01.10-31.12 | YTD | YTD | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | ||
| Cash flow from operating activities | |||||
| Profit/(loss) before tax | (2) | 50 | 522 | (38) | |
| Financial (income)/expenses, excluding unrealised financial derivates | 39 | 17 | 117 | 68 | |
| Financial derivatives unrealised | (44) | (9) | (100) | 30 | |
| Depreciation/impairment | 3 | 21 | 20 | 81 | 80 |
| (Gain)/loss on sale of tangible assets | 3 | ||||
| Net (gain)/loss from sale of associate | (26) | ||||
| (Gain)/loss on demerger | (375) | ||||
| Change in net pension assets/liabilities | (3) | (2) | (1) | (10) | |
| Other change in working capital | (5) | (1) | 22 | (9) | |
| Share of (profit)/loss from joint ventures and associates | 16 | (26) | (119) | 72 | |
| Dividend received from joint ventures and associates | 11 | 8 | 64 | 41 | |
| Tax paid (company income tax, witholding tax) | (2) | (12) | (5) | (14) | |
| Net cash flow provided by/(used in) operating activities | 30 | 46 | 211 | 194 | |
| Cash flow from investing activities | |||||
| Proceeds from sale of tangible assets | 13 | 7 | |||
| Investments in vessels, other tangible and intangible assets | 3 | (3) | (3) | (149) | (154) |
| Net proceeds from sale of associate | 39 | ||||
| Proceeds from sale of financial investments | 55 | 19 | 117 | 94 | |
| Investments in financial investments | (2) | (18) | (79) | (127) | |
| Dividend received (financial investments) | 3 | 2 | |||
| Interest received | 1 | ||||
| Changes in other investments | (1) | 1 | |||
| Net cash flow provided by/(used in) investing activities | 51 | (3) | (95) | (137) | |
| Cash flow from financing activities | |||||
| Proceeds from issue of debt | 248 | 221 | |||
| Repayment of debt | (105) | (30) | (258) | (178) | |
| Interest paid including interest derivatives | (18) | (17) | (73) | (77) | |
| Realised financial derivatives | (28) | (7) | (42) | (13) | |
| Dividend to shareholders/ demerger Den Norske Amerikalinje AS | (13) | (17) | (41) | ||
| Net cash flow provided by/(used in) financing activities | (151) | (67) | (143) | (89) | |
| Net increase in cash and cash equivalents | (70) | (25) | (27) | (32) | |
| Cash and cash equivalents, excluding restricted cash, at beginning of period | 150 | 132 | 108 | 140 | |
| Currency on cash and cash equivalents* | |||||
| Cash and cash equivalents at end of period | 81 | 108 | 81 | 108 |
* 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 cash flow statement should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | Share capital | Retained earnings | Total equity |
|---|---|---|---|
| 2016 - Year to date | |||
| Balance at 31.12.2015 | 30 | 1 623 | 1 655 |
| Profit/(loss) for the period | 500 | 500 | |
| Other comprehensive income | 10 | 10 | |
| Total comprehensive income | 0 | 510 | 510 |
| Demerger Den Norske Amerikalinje AS | (15) | (716) | (730) |
| Balance 31.12.2016 | 16 | 1 419 | 1 435 |
| 2015 - Full year | |||
| Balance at 31.12.2014 | 30 | 1 675 | 1 707 |
| Profit/(loss) for the year | (4) | (4) | |
| Other comprehensive income | (8) | (8) | |
| Total comprehensive income | 0 | (12) | (12) |
| Dividend to shareholders | (41) | (41) | |
| Balance 31.12.2015 | 30 | 1 623 | 1 655 |
The above consolidated 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 ASA group (WWASA), 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 WWASA for the year end 31 December 2015.
There are no new standards or amendments to standards released during 2016.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
The demerger of Den Norske Amerikalinje AS (owns the Hyundai Glovis shareholding) from the group was effective on 8 June 2016. The demerger was accounted for at fair value and contributed with a significant non-recurring gain in the second quarter of USD 375 million. The book value of equity, after the accounting gain, was reduced with 730 million by the demerger.
The demerged entity named Treasure ASA was listed on the Oslo Stock Exchange on 8 June 2016. All shareholders of WWASA received 1 share in Treasure ASA for every share held in WWASA.
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.
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.
Joint ventures based on equity method
| Vessels & | ||||
|---|---|---|---|---|
| Other tangible | Newbuilding | Total tangible | Intangible | |
| USD mill | assets | contracts | assets | assets |
| 2016 - Year to date | ||||
| Cost price at 01.01 | 2 | 2 472 | 2 474 | 7 |
| Additions | 149 | 149 | ||
| Disposal | (164) | (164) | ||
| Cost price at 31.12 | 2 | 2 457 | 2 459 | 7 |
| Accumulated depreciation and impairment losses at 01.01 | (1) | (646) | (648) | (1) |
| Depreciation | (81) | (81) | ||
| Disposal | 148 | 148 | ||
| Accumulated depreciation and impairment losses at 31.12 | (1) | (579) | (581) | (1) |
| Carrying amounts at 31.12 | 0 | 1 878 | 1 879 | 6 |
| 2015 - Full year | ||||
| Cost price at 01.01 | 2 | 2 400 | 2 401 | 7 |
| Additions | 154 | 154 | ||
| Disposal | (81) | (82) | ||
| Cost price at 31.12 | 2 | 2 472 | 2 474 | 7 |
| Accumulated depreciation and impairment losses at 01.01 | (1) | (640) | (642) | (1) |
| Depreciation | (80) | (80) | ||
| Disposal | 75 | 75 | ||
| Accumulated depreciation and impairment losses at 31.12 | (1) | (646) | (648) | (1) |
| Carrying amounts at 31.12 | 0 | 1 827 | 1 827 | 6 |
Joint ventures based on equity method
| USD mill | 01.10-31.12 | 01.10-31.12 | YTD | YTD |
|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | |
| Financials | ||||
| Investment management 1 | 5.5 | 2.1 | 11.3 | 1.3 |
| Interest incomes | 0.1 | 0.1 | 0.5 | 1.0 |
| Other financial items | (0.3) | (0.2) | (1.4) | (11.5) |
| Net financial items | 5.3 | 2.0 | 10.4 | (9.2) |
| Net financials - interes rate | ||||
| Interest expenses | (10.2) | (9.1) | (40.9) | (36.0) |
| Interest rate derivatives - realised | (6.6) | (7.9) | (28.1) | (31.5) |
| Net interest expenses | (16.8) | (16.9) | (69.1) | (67.5) |
| Interest rate derivatives - unrealised | 26.9 | 17.4 | 24.7 | 23.6 |
| Net financial - currency | ||||
| Net currency gain/(loss) | 1.1 | 5.0 | (13.6) | 22.2 |
| Derivatives for hedging of cash flow risk - realised | (9.8) | (7.1) | (22.6) | (1.8) |
| Derivatives for hedging of cash flow risk - unrealised | 7.7 | 2.2 | 38.6 | (25.6) |
| Derivatives for hedging of translation risk - realised | (18.3) | (0.3) | (19.9) | (11.5) |
| Derivatives for hedging of translation risk - unrealised | 6.7 | (6.5) | 27.1 | (21.4) |
| Net financial - currency | (12.6) | (6.6) | 9.7 | (38.2) |
| Financial derivatives bunkers | ||||
| Valuation of bunker hedges | 2.4 | (3.7) | 9.3 | (6.3) |
| Realised portion of bunker hedges | (0.3) | 0.0 | (2.2) | 0.0 |
| Net financial derivatives bunkers | 2.1 | (3.7) | 7.1 | (6.3) |
| Financial income/(expenses) | 4.9 | (7.9) | (17.3) | (97.6) |
1 Includes financial derivatives for trading
The effective tax rate for the WWASA 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. Tonnage tax is considered as operating expense in the accounts.
In regards to the withholding tax case on dividends from EUKOR to Wilhelmsen
Ships Holding Malta Ltd for the period 2010-2014 it can be informed that the WWASA group lost the 2010 appeal case in National Tax Tribunal in Korea. The negative decision will not have any effect on the income statement as the additional tax was booked and paid in Q4 2015. The administrative appeal to the Board of Audit and Inspection (BAI) for the period 2011-2014 is still pending.
| The company's share capital is as follows: | |||
|---|---|---|---|
| Number of shares | NOK mill | USD mill | |
| Share capital | 220 000 000 | 114 | 16 |
| The demerger of Den Norske Amerikalinje AS from the group led to a reduction of the share |
capital with NOK 106 million / USD 15 million in the second quarter of 2016.
Joint ventures based on equity method
With the proposed merger of WWASA and Wallroll AB, the board of Wallenius Wilhelmsen Logistics ASA will communicate a future dividend policy.
The demerger of Den Norske Amerikalinje AS (owns the Hyundai Glovis shareholding) from the group was effective on 8 June 2016. The demerged entity named Treasure ASA was listed on the Oslo Stock Exchange on 8 June 2016. All shareholders of WWASA received 1 share in Treasure ASA for every share held in WWASA.
Visualising values for WWASA's shareholders through the spin-off, the annual general meeting held 3 May 2016 resolved not to pay dividend for the fiscal year 2015.
Dividend for fiscal year 2014 of NOK 1.00 per share, total of approximately USD 28 million, was paid to the shareholders in May 2015. The dividend had effect on retained earnings in the second quarter of 2015.
Based on the company's distributable equity as of 31 December 2014 (less dividend paid in the first half of 2015), an additional dividend of NOK 0.50 per share, total of approximately USD 13 million, was paid in November 2015. The dividend had effect on retained earnings and other reserves in the fourth quarter of 2015.
| USD mill | 31.12.2016 | 31.12.2015 |
|---|---|---|
| Non current interest-bearing debt | 1 205 | 1 135 |
| Current interest-bearing debt | 115 | 184 |
| Total interest-bearing debt | 1 320 | 1 319 |
| Cash and cash equivalents | 81 | 108 |
| Current financial investments | 202 | 242 |
| Net interest-bearing debt | 1 038 | 970 |
| Net interest-bearing debt in joint ventures (group's share) | 31.12.2016 | 31.12.2015 |
| Non current interest-bearing debt | 668 | 640 |
| Current interest-bearing debt | 93 | 67 |
| Total interest-bearing debt | 761 | 707 |
| Cash and cash equivalents Current financial investments |
181 | 262 |
| Net interest-bearing debt | 580 | 445 |
| Specification of interest-bearing debt | 31.12.2016 | 31.12.2015 |
| Mortgages | 886 | 1 049 |
| Leasing commitments | 239 | |
| Bonds | 196 | 270 |
| Total interest-bearing debt | 1 320 | 1 319 |
| Repayment schedule for interest-bearing debt | ||
| Due in year 1 | 115 | 184 |
| Due in year 2 | 292 | 105 |
| Due in year 3 | 307 | 279 |
| Due in year 4 | 83 | 337 |
| Due in year 5 and later | 523 | 414 |
| Total interest-bearing debt | 1 320 | 1 319 |
Joint ventures based on equity method
| Total financial instruments and short term financial investments: | |
|---|---|
| USD mill | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value through the income statement | ||||
| Financial derivatives | 9 | 9 | ||
| Equities | 59 | 59 | ||
| Bonds | 143 | 143 | ||
| Total financial assets 31.12.2016 | 202 | 9 | 0 | 210 |
| Financial liabilities at fair value through the income statement | ||||
| Financial derivatives | 153 | 153 | ||
| Total financial liabilities 31.12.2016 | 0 | 153 | 0 | 153 |
| Financial assets at fair value through the income statement | ||||
| Financial derivatives | 2 | 2 | ||
| Equities | 72 | 72 | ||
| Bonds | 169 | 169 | ||
| Total financial assets 31.12.2015 | 241 | 2 | 0 | 243 |
| Financial liabilities at fair value through the income statement | ||||
| Financial derivatives | 246 | 246 | ||
| Total financial liabilities 31.12.2015 | 0 | 246 | 0 | 246 |
| 2016 | 2015 | |||
| 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 to value financial instruments include:
Quoted market prices or dealer quotes for similar instruments
The fair value of interest rate swaps is calculated as the 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
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 present value and
The fair value of foreign exchange option contracts is determined using observable forward exchange rates, volatility, yield curve and time-to-maturity parameters at the balance sheet date, resulting in an option premium.
The carrying value less impairment provision of trade 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 instruments.
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 are listed equities and liquid investment grade bonds.
The fair value of financial instruments that are not traded in an active market are based on third-party quotes (Mark-to-Market). These quotes use the maximum number of observable market rates for price discovery. The different valuation 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 instrument is in level 3. Primarily illiquid investment funds and structured notes are included in level 3.
Joint ventures based on equity method
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | Full | Full | Full | Full | |||||||||||
| Q4 | Q4 | year | Q4 | Q4 | year | Q4 | Q4 | year | Q4 | Q4 | year | Q4 | Q4 | year | |
| QUARTER | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 |
| Operating revenue | 66 | 81 | 312 | 1 | 1 | 5 | (1) | (1) | (5) | 66 | 81 | 313 | |||
| Share of profit/(loss) from joint | |||||||||||||||
| ventures and associates1 | (16) | 20 | (115) | 6 | 43 | (16) | 26 | (72) | |||||||
| Gain on sale of assets | 26 | 27 | |||||||||||||
| Total income | 50 | 101 | 197 | (0) | 6 | 69 | 1 | 1 | 5 | (1) | (1) | (5) | 50 | 107 | 267 |
| Operating profit before | |||||||||||||||
| depreciation and impairment | 22 | 74 | 79 | 6 | 69 | (9) | (2) | (8) | 14 | 78 | 140 | ||||
| Depreciation and impairment | (21) | (20) | (80) | (0) | (21) | (20) | (80) | ||||||||
| Operating profit/(loss) (EBIT) | 1 | 53 | (1) | (0) | 6 | 69 | (9) | (2) | (8) | 0 | 0 | 0 | (7) | 58 | 60 |
| Financial income/(expense) | 5 | (3) | (48) | (5) | (50) | 5 | (8) | (98) | |||||||
| Profit/(loss) before tax | 6 | 51 | (49) | (0) | 6 | 69 | (9) | (7) | (58) | 0 | 0 | 0 | (2) | 50 | (38) |
| Tax income/(expenses) | (13) | 21 | 10 | (5) | 11 | 24 | (18) | 32 | 33 | ||||||
| Profit/(loss) for the period | |||||||||||||||
| attributable to the owners of the | |||||||||||||||
| parent | (7) | 72 | (39) | (0) | 6 | 69 | (14) | 4 | (34) | 0 | 0 | (0) | (21) | 82 | (4) |
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| YTD | Full YTD year |
YTD | Full YTD year |
YTD | Full YTD year |
YTD | Full YTD year |
YTD | Full YTD year |
|
| Year to date | 2016 | 2015 2015 |
2016 | 2015 2015 |
2016 | 2015 2015 |
2016 | 2015 2015 |
2016 | 2015 2015 |
| Operating revenue | 257 | 312 312 |
0 | 4 | 5 5 |
(4) | (5) (5) |
257 | 313 313 |
|
| Share of profit/(loss) from joint | ||||||||||
| ventures and associates1 | 12 | (115) (115) |
106 | 43 43 |
0 | 0 | 119 | (72) (72) |
||
| Gain on disposal of assets | 26 26 |
375 | 0 | 0 | 375 | 27 27 |
||||
| Total income | 269 | 197 197 |
106 | 69 69 |
379 | 5 5 |
(4) | (5) (5) |
751 | 267 267 |
| Operating profit before | ||||||||||
| depreciation and impairment | 155 | 79 79 |
106 | 69 69 |
359 | (8) (8) |
0 | 620 | 140 140 |
|
| Depreciation and impairment | (81) | (80) (80) |
0 | (0) | 0 | (81) | (80) (80) |
|||
| Operating profit/(loss) (EBIT) | 73 | (1) (1) |
106 | 69 69 |
359 | (8) (8) |
0 | 0 0 |
539 | 60 60 |
| Financial income/(expenses) | (12) | (48) (48) |
0 | (5) | (50) (50) |
0 | (17) | (98) (98) |
||
| Profit/(loss) before tax | 62 | (49) (49) |
106 | 69 69 |
354 | (58) (58) |
0 | 0 0 |
522 | (38) (38) |
| Tax income/(expense) | (17) | 10 10 |
0 | (5) | 24 24 |
0 | (22) | 33 33 |
||
| Profit/(loss) for the period attributable to the owners of the |
||||||||||
| parent | 45 | (39) (39) |
106 | 69 69 |
349 | (34) (34) |
0 | (0) (0) |
500 | (4) (4) |
1 Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
Joint ventures based on equity method
Wilh. Wilhelmsen Holding ASA (WWH) delivers services to the WWASA group related to inter alia human resources, accounting services, tax, communication, treasury and legal services ("Shared Services") and in-house services such as canteen, post, switchboard and rent of office facilities. Generally, Shared Services are priced using a cost plus 5% margin calculation, in accordance with the
The ongoing investigations of WWL and EUKOR are confidential. WWASA is therefore not in a position to comment on the remaining investigations. The
Wilhelmsen and Wallenius have signed an agreement leading to a new ownership structure for their jointly owned investments in Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Roll on Roll off Carrier. The extraordinary general meetings of the respective owning companies have approved the proposed merger.
The completion of the merger is pending approval from competition authorities, which is expected during April 2017.
WWASA will issue shares to Wallenius in exchange for their shares in the currently joint investments. At the completion of the merger, Wilhelmsen and principles set out in the OECD Transfer Pricing Guidelines and are delivered according to agreements that are renewed annually. In addition, WWASA group has 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.
processes are expected to continue to take time, but further clarifications are expected during 2017.
Wallenius will hold respectively 37.8% and 48% of the new entity to be named Wallenius Wilhelmsen Logistics ASA. The parties have agreed that Wallenius will reduce its shareholding subsequent to the merger, whereby both parties eventually will have an equal shareholding in the new entity. For a full description of the transaction agreement, please refer to the Stock Exchange Notice from WWASA dated 22 December 2016.
No other material events occurred between the balance sheet date and the date when the accounts were presented providing new information about conditions prevailing on the balance sheet date.
Wilh. Wilhelmsen ASA PO Box 33 NO-1324 Lysaker, NORWAY Tel: +47 67 58 40 00 http://www.wilhelmsenasa.com/
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Org no 995 216 604 MVA
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