Quarterly Report • Nov 11, 2014
Quarterly Report
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| USD million | 2014 Q3 2014 Q2 2014 YTD 2013 YTD 2013 Q3 2013 FY | |||||
|---|---|---|---|---|---|---|
| Total income | 650 | 682 | 1968 | 2002 | 667 | 2673 |
| Total income adjusted | 638 | 682 | 1956 | 2002 | 667 | 2672 |
| EBITDA | 110 | 95 | 295 | 340 | 116 | 445 |
| EBITDA adjusted | 102 | 116 | 309 | 343 | 118 | 463 |
| EBIT | 66 | 57 | 177 | 227 | 78 | 293 |
| EBIT adjusted | 64 | 79 | 196 | 229 | 81 | 311 |
| Net profit/(loss) | 54 | 25 | 111 | 205 | 59 | 272 |
| Net profit/(loss) adjusted | 50 | 47 | 128 | 208 | 62 | 290 |
| Earnings per share (USD) | 0.25 | 0,11 | 0,50 | 0.93 | 0.27 | 1.23 |
| Region | Q3 2014 | Q2 2014 | QoQ change |
Q3 2013 | YoY change | 2013 FY | 2014 FY |
|---|---|---|---|---|---|---|---|
| N America | 5.08 | 5.23 | ‐3 % | 4.68 | 9 % | 18.40 | 19.10 |
| Europe* | 3.34 | 3.89 | ‐13 % | 3.23 | 5 % | 13.80 | 14.50 |
| Oceania | 0.30 | 0.32 | ‐7 % | 0.31 | ‐1 % | 1.20 | 1.20 |
| BRICs | 7.28 | 7.84 | ‐7 % | 7.27 | 0 % | 30.80 | 32.20 |
| Brazil | 0.80 | 0.82 | ‐3 % | 0.94 | ‐16 % | 3.60 | 3.40 |
| Russia | 0.54 | 0.63 | ‐13 % | 0.71 | ‐24 % | 2.80 | 2.50 |
| India | 0.76 | 0.66 | 16 % | 0.71 | 7 % | 3.00 | 3.00 |
| China | 5.18 | 5.73 | ‐10 % | 4.91 | 6 % | 21.40 | 23.30 |
*excluding Russia and Turkey
Light vehicle sales in selected markets (million units). Source: WWL Global Market Intelligence
Total sale of light vehicles in key markets fell 7% to 16.0 million units quarter on quarter. Sales in North America and Europe declined after a strong sales growth in the second quarter. Except an increase in Indian auto sales, demand for new cars were down in the other BRIC countries. Chinese sales were still strong, but decreased after a prolonged period of growth.
Year over year, light vehicle sales in key markets increased by 3%. Sales in Europe continued to grow after a long period of decline, while Russian sales fell 24% due to the political unrest in the region. North American sales were up 9%. A recovering economy, improved credit availability, low interest ratesin addition to new or redesigned models continued to contribute to the positive development in US auto sales. The growth was, however, stronger for locally produced cars than for imported brands.
Japanese exports continued a modest, but positive growth trend and was up 5% from the second quarter. Exports were, however, 5% lower compared with the same quarter last year, due to weak demand from European consumers and a high share of transplant production by Japanese manufacturers. Japanese export volumes totalled approximately 1.0 million cars.
Korea reported a 20% decline in car exports compared with the previous quarter, mainly due to labour strikes. Export levels were on par with the same quarter last year. Korean export volumes totalled approximately 0.6 million cars.
The level of light vehicle inventory in the US decreased from the second quarter but is still at a historically high seasonal level and counted roughly 3.3 million units on average in the third quarter. Inventory supply also fell and averaged about 54 days of sales for the quarter implying a sales rate on par with the last quarter.
Estimated global construction spending continued to indicate growth in absolute terms both quarter on quarter and year over year, thus contributing to stronger demand for equipment.
Construction spending in the US remained at the high level seen in the second quarter and was higher compared with levels seen in the same period last year. The housing construction market sentiment remained optimistic. Construction confidence indicators in Europe supported the positive trend seen in the second quarter.
Commodity price indices for precious metals declined 10% quarter on quarter and 11% year over year, while industrial metals were down 3% and 2% respectively. Iron ore prices (62% Fe to China) fell significantly and ended at a five year low. The volatile iron ore prices (62% Fe to China) was related to uncertainty in China's economic development. Given the general negative development in commodity prices from mid‐2012, most mining companies refrained from initiating new investment projects. They continued to show a strict capital expenditure discipline. Cost cutting initiatives also kept up in the quarter. Despite the negative sentiment, Australian iron ore export from Port Hedland was at record high levels.
The value of US mining equipment inventory fell in the quarter but remained at a high level.
Most key agricultural commodity prices continued to decline from the high levels seen at the beginning of the year.
Large farm equipment sales in North America were down 13% the first two months of the quarter compared with the same period last year. Inventory levels of large farm equipment saw a steady increase in the quarter. The business sentiment in Europe continued the degrade in CEMA's business Barometer Survey for September.1
The world car carrying fleet decreased by one vessel from the second quarter and counted 746 vessels (3.9 million CEUs) at the end of the third quarter.
Three vessels were recycled during the quarter, while two new vessels entered the global fleet.
Two newbuildings were ordered during the quarter, while six vessels were removed from the orderbook. The global orderbook counted 57 vessels (403 000 CEUs) or 10% of the total world fleet measured in CEUs by the end of September. The average vessel age in the global car carrying fleet remained at approximately ten years.
1 CEMA is the European association representing the agricultural machinery industry.
Group companies had a lifting capacity of 924 000 CEUs at the end of September 2014 (905 000 CEUs), down 0.6% quarter on quarter or up 2.1% year over year. The fleet represented 24% of the global car carrying capacity. With a net decrease of one vessels compared with the second quarter, the group controlled a total of 146 vessels by the end of September.
No newbuildings were delivered to group companies in the third quarter.
At the end of the third quarter, the newbuilding programme for group companies counted eight vessels (64 000 CEUs) to be delivered in 2014‐2016. The newbuildings equalled 16% of the world car carrier orderbook measured in CEUs. Four of the vessels are for WWASA's own account, of which the first Post‐Panamax vessel is due for delivery in the fourth quarter 2014.
One vessel was redelivered from group companies to an external owner in the third quarter. The group has the flexibility to redeliver nine vessels the next 12 months.
Two vessels were sold for recycling in third quarter, one ‐ the ro‐ro vessel Taiko – for WWASA's account. The demolitions take place at a green recycling facility in China.
With current demand for transportation of cars and high and heavy units being modest, the ability to adjust fleet capacity to cargo availability is crucial to optimise profitability. Optimising initiatives include chartering in or out vessels, speed adjustments, redelivery, newbuildings and recycling of older tonnage. In addition, the group's operating companies swap tonnage and benefit from group synergies.
| Company | Fleet by end of Q3 | Deliveries in Q3 | Newbuilding programme by end of Q3 | Yard |
|---|---|---|---|---|
| WWL | 57 vessels, 382 000 | Four pure car and truck carriers Post | Hyundai | |
| CEUs, (59 vessels, | Panamax design (32 000 CEUs) for WWASA's | Samho | ||
| 392 000 CEUs) | account. | |||
| Four pure car and truck carriers Post | Xingang | |||
| Panamax design (32 000 CEUs) not for | ||||
| WWASA's account. | ||||
| EUKOR | 84 vessels, 513 000 | |||
| CEUs (80 vessels, | ||||
| 478 000 CEUs) | ||||
| ARC | Five vessels, 29 000 | |||
| CEUs (six vessels, | ||||
| 35 000 CEUs) |
The operating profit for WWASA in the third quarter of 2014 totalled USD 66 million (USD 78 million) based on a total income of USD 650 million (USD 667 million).
Hyundai Glovis contributed with a non‐recurring gain of USD 12 million in the third quarter of 2014, positively affecting the operating profit and total income. The operating profit was, however, negatively impacted by non‐recurring items of USD 10 million related to ASL. In the same quarter last year, the operating profit was negatively affected by an accrual of USD 3 million related to internal restructuring of the organisation. Adjusted for non‐recurring items, the operating profit was USD 64 million (USD 81 million), while the total income was USD 638 million (667 million).
Year to date, the group delivered an operating profit of USD 177 million (USD 227 million) and a total income of USD 1 968 million (USD 2 002 million). Adjusted for non‐recurring items, operating profit was USD 196 million (USD 229 million) and total income USD 1 956 million (USD 2 002 million).
Financial expense in the third quarter amounted to USD 9 million (expense of USD 14 million). The corresponding figure year to date was an expense of USD 56 million (income of USD 1 million).
Group profit before tax and minority interest amounted to USD 57 million (USD 64 million) for the quarter, and USD 121 million (USD 227 million) for the first nine months.
The group recorded a tax expense of USD 3 million for the quarter (expense of USD 4 million), while the total tax expense year to date amounted to USD 9 million (expense of USD 21 million).
Net profit after tax and minority interest amounted to USD 54 million (USD 59 million) for the period, and USD 111 million (USD 205 million) for the first nine months.
Decline in volumes transported deep‐sea and unfavourable cargo and trade mix were the main reasons for the weaker results in the third quarter compared with second quarter. The shipping segment delivered an operating profit of USD 47 million (USD 53 million) for the period July to September. Total income came to USD 512 million (USD 525 million).
Year to date, the shipping segment had an operating profit of USD 121 million including an accrual of USD 22 million in the second quarter, (USD 157 million) based on a total income of USD 1 549 million (USD 1 590 million).
Total cargo volumes amounted to 18.8 million CBM, a decline equivalent to 8% quarter on quarter, mainly driven by seasonality. The operating entities reported a decline in transported auto volumes impacted by strikes, which reduced export out of Korea, and a slight decrease in demand for high and heavy transportation.
Following reduced activity and lower fleet utilisation in the third quarter, net bunker cost per transported unit increased and BAF recovery declined compared with the second quarter.
Transported volumes were on par with the first nine months of 2013. However, with a less profitable cargo and trade mix, the adjusted total income and operating profit fell 3% and 13% respectively.
Wallenius Wilhelmsen Logistics (WWL ‐ owned 50%) experienced a drop in demand for deep‐sea transportation. Except for higher volumes from Asia to Europe, all trades recorded a decrease compared with the second quarter. The volume reduction was attributed to lower sales and production due to holiday season in Europe and the US. High and heavy volumes were also down, with agriculture season ending in both Europe and North America. The volume in the Oceania trade was weaker compared with historical levels, but stable quarter on quarter. Auto volumes continued to replace high and heavy units, resulting in low fleet utilisation in the trade.
WWL transported volumes were on par with the same quarter last year with positive development in all main trades driven by increased demand for transportation in Asia to Europe and Asia to North America.
The cargo mix was in line with the previous quarter. However, the combined cargo and trade mix continued to reduce fleet utilisation and thereby profitability.
EUKOR Car Carriers' (EUKOR – owned 40%) volumes saw a seasonal dip following labour strikes, but were one par with the same quarter last year. Total income and operating profit fell quarter on quarter. Compared with the same quarter 2013, total income fell, while profit was up.
Quarter on quarter, lower demand for transportation had a negative effect on operational efficiency, and an unfavourable trade mix created an imbalance in certain trades requiring a need to reposition vessels and thereby increasing cost. Compared with the same quarter last year, volumes in the US trade increased while the European and other trades fell slightly.
American Roll‐On Roll‐Off Carrier (ARC – owned 50%) benefitted from cost control initiatives and increased volumes quarter on quarter. Year over year, the total income fell in line with reduced activity level, while the operating profit improved slightly.
Ship operating activitiesin Hyundai Glovis(owned 12.5%) contributed with USD 3 million (USD 2 million) to WWASA's third quarter accounts.
The operating profit for the logistics segment came in at USD 22 million (USD 29 million) based on a total income of USD 143 million (USD 149 million). The corresponding figures year to date were USD 64 million (79 million) and USD 435 million (USD 431 million).
Hyundai Glovis contributed with a non‐recurring gain of USD 12 million in the third quarter of 2014, positively affecting the operating profit and total income. The gain resulted from the merger between Amco and Hyundai Engineering in the second quarter. The operating profit was, however, negatively impacted by non‐recurring items totalling USD 10 million related to impairment and restructuring costs in ASL.
Adjusted for non‐recurring items, the operating profit was USD 19 million (29 million), while the total income was USD 131 million (USD 149 million). Thisis a decrease from USD 23 million and USD 147 million respctively compared with the previous quarter.
Operating profit and total income fell quarter on quarter. WWL delivered slightly lower figures, while the contribution from the American Shipping and Logistics group fell substantially following the loss of the Privately Owned Vehicle contract, effective 1 May. Contribution from Hyundai Glovis more than doubled, with USD 12 million being attributed to a non‐recurring gain.
WWL and EUKOR continue to be part of anti‐trust investigations of the car carrying industry in several jurisdictions, including the US and the EU. WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are part of. However, WWASA expects further clarification during 2015.
Cost of process management related to the investigations is charged on an ongoing basis.
Total income were flat when comparing the first nine months of the year with the same period last year, while the operating profit fell considerably. Adjusted for non‐recurring items, the total income decreased by 2%, while the operating profit fell by 21%.
WWL handled 477 000 units (500 000 units) at its terminals in the quarter, 1.5 million units (1.5 million units) at the technicalservicesfacilities and transported 630 000 units (623 000 units) through its inland distribution network. With a slight reduction in activity level, WWL contributed with slightly less than the previous quarter.
Following the loss of the Privately Owned Vehicle contract, the operation in the American Shipping and Logistics group (owned 50%) is considerably reduced. Non‐recurring items estimated to USD 10 million related to impairment and restructuring costs negatively affected the operating profit.
The contribution from Hyundai Glovis to WWASA's group accounts was USD 27 million (USD 13 million) in the third quarter, including a USD 12 million gain. Adjusted for the gain, Hyundai Glovis contributed with USD 15 million. The increase in contribution was related to a growing activity level. WWASA's 12.5% shareholding in Hyundai Glovis at 10 November 2014 was valued at USD 1 205 million.
The WWASA group recorded a net financial expense amounting to USD 9 million for the third quarter (expense USD 14 million).
Net interest expenses were stable at USD 25 million (USD 24 million).
At the end of the quarter, the investment portfolio had a net exposure to the market of USD 246 million, of which USD 190 million were invested in fixed income assets and the remaining in stocks. The portfolio generated had a negative return of USD 1 million in the third quarter (USD 8 million).
Long‐term USD interest rates at the end of third quarter were roughly at the same level as at the
Tax expense came to USD 3 million in the third quarter of 2014 (expense of USD 4 million).
Cash and cash equivalents including the investment portfolio amounted to USD 465 million at the end of the third quarter (USD 681 million when including the group'sshare of cash and cash equivalents in the joint ventures), USD 15 million higher than the previous quarter.
WWASA's equity increased from the previous quarter by USD 51 million to USD 1 709 million, representing an equity ratio of 49% based on book values for WWASA's own account.
beginning of the quarter. However, medium term rates increased, resulting in an unrealised gain on interest rate derivatives of USD 10 million (gain of USD 2 million).
During the quarter, USD appreciated towards most other currencies. Net currency items for the quarter amounted to USD 6 million (USD 0 million). Most of the gain relates to unrealised items.
The bunker exposure is mainly covered through bunker adjustment factors (BAF) in the ocean contracts. At the end of the quarter, there were no other active bunker hedging contracts.
Year to date the group recorded a tax expense of USD 9 million (expense of USD 21 million).
The group's gross interest bearing debt amounted to USD 1 485 million (USD 2 145 million when including share of interest‐bearing debt in joint ventures) at the end of the quarter.
WWASA has secured financing for the two vessels ordered at the Korean yard Hyundai Samho Heavy Industries up for delivery in fourth quarter 2014 and first quarter 2015. An option for an additional two vessels to be delivered in the first half of 2016 has been declared. These vessels are identical to the newbuildings delivered in 2014 and 2015, but are not yet financed.
By the end of November, NOK 518 mill of WWASA's bond debt will expire. The debt will be repaid with existing cash, which was financed earlier this year through the issuance of a 5‐year bond.
WWASA's board of directors has, based on an authorisation granted by the annual general meeting on 24 April 2014, resolved to pay a second dividend of NOK 1.00 per share, totaling USD 32 million. The share will be traded ex dividend on Friday 14 November.
WWASA expects to pay the dividend on or about 27 November 2014.
In the third quarter, the 29 WWASA owned and controlled vessels (33 vessels) used 60.7 thousand tonnes fuel and carried out 3 521 million tonne miles3 of transport work. Equal to 17.2 gram fuel per cargo tonne miles (17.1). The emitted CO2 corresponded to 49.9 gram (49.8 gram) per cargo tonnes mile.4
There were no oil spills reported for WWASA controlled vessels during the quarter, with average number of off‐hire per vessel below set target. The fleet experienced 33 port state controls. No vessels were detained and the deficiency rate indicated that the fleet was managed according to the group's expectations.
The groups controlled vessels recorded a lost time injury frequency of 0.59 during the third quarter, above the group's target. 5
2 HSEQ reporting is based on vessels owned and controlled by WWASA.
3 Measures number of tonnes by distance transported.
4 Energy efficiency is measured by the International Maritime Organisation as grams of CO2 per tonne nautical mile.
5 Measured as injury per million working hour, where injury is an employee being unable to return to work for
a scheduled work shift on the day following the injury.
The board of WWASA anticipates the group's profitability to continue to be negatively affected by the challenging market sentiment.
Volumes transported deep sea and handled at the group's logistics facilities is expected to increase slightly in the fourth quarter compared with the previous quarter.
Short term, a decrease in the bunker price will have a positive effect on net bunker cost.
WWASA has a strong financial position with a healthy balance sheet. The group is positioned to meet the challenges in the industry and act upon market opportunities.
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 which are difficult or impossible to predict. WWASA cannot give assurances that expectations regarding the future outlook will be achieved or accomplished.
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | Full | Full | Full | Full | |||||||||||
| Q3 | Q3 | year | Q3 | Q3 | year | Q3 | Q3 | year | Q3 | Q3 | year | Q3 | Q3 | year | |
| QUARTER | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 |
| Operating revenue | 508 | 523 | 2 114 | 116 | 136 | 521 | 1 | 1 | 6 | (6) | (9) | (31) | 619 | 651 | 2 609 |
| Other income | |||||||||||||||
| Share of profit from | |||||||||||||||
| associates | 3 | 2 | 7 | 27 | 13 | 55 | 30 | 15 | 62 | ||||||
| Gain on sale of assets | 1 | 1 | |||||||||||||
| Total income | 512 | 525 | 2 122 | 143 | 149 | 576 | 1 | 1 | 6 | (6) | (9) | (31) | 650 | 667 | 2 673 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (268) | (282) | (1 121) | 5 | 8 | 26 | (264) | (274) | (1 096) | ||||||
| Vessel expenses | (21) | (22) | (86) | (21) | (22) | (86) | |||||||||
| Charter expenses | (83) | (80) | (335) | (83) | (80) | (335) | |||||||||
| Employee benefits | (35) | (40) | (157) | (11) | (10) | (35) | (3) | (3) | (12) | (49) | (53) | (204) | |||
| Other expenses | (20) | (13) | (80) | (103) | (109) | (427) | (1) | (1) | (6) | 1 | 1 | 6 | (123) | (122) | (507) |
| Depreciation and impairment | (36) | (36) | (145) | (7) | (2) | (7) | (44) | (38) | (152) | ||||||
| Total operating expenses | (464) | (473) | (1 924) | (121) | (121) | (469) | (4) | (5) | (18) | 6 | 9 | 31 | (584) | (589) | (2 380) |
| Operating profit (EBIT) 2 | 47 | 53 | 198 | 22 | 29 | 107 | (3) | (4) | (12) | (0) | (0) | 0 | 66 | 78 | 293 |
| Financial income/(expenses) | (5) | (9) | (13) | (1) | (4) | (4) | 6 | (9) | (14) | (8) | |||||
| Profit/(loss) before tax | 42 | 43 | 186 | 21 | 29 | 106 | (6) | (8) | (7) | (0) | (0) | 0 | 57 | 64 | 285 |
| Tax income/(expense) | (4) | (1) | 1 | (5) | (17) | 2 | 2 | 4 | (3) | (4) | (12) | ||||
| Profit/(loss) | 38 | 42 | 186 | 21 | 24 | 90 | (5) | (6) | (2) | (0) | (0) | 0 | 55 | 60 | 273 |
| Of which minority interest | (1) | (1) | (2) | (1) | (1) | (2) | |||||||||
| Profit/(loss) after minority | |||||||||||||||
| interest | 38 | 42 | 186 | 21 | 23 | 88 | (5) | (6) | (2) | (0) | (0) | 0 | 54 | 59 | 272 |
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.
2014: Material gain/(loss) from disposal of assets and impairment charges (* Included in share of profits from associates and joint ventures)
Shipping: Q1 - No material gain/(loss)
Shipping: Q2 - No material gain/(loss)
Shipping: Q3 - Impairment loss ASL USD 5.5 million.
2013: Material gain/(loss) from disposal of assets and impairment charges (* Included in share of profits from associates and joint ventures)
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | Full | Full | Full | Full | |||||||||||
| YTD | YTD | year | YTD | YTD | year | YTD | YTD | year | YTD | YTD | year | YTD | YTD | year | |
| Year to date | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 |
| Operating revenue | 1 541 | 1 585 | 2 114 | 386 | 392 | 521 | 4 | 4 | 6 | (20) | (23) | (31) | 1 912 | 1 958 | 2 609 |
| Other income | |||||||||||||||
| Share of profit from | |||||||||||||||
| associates | 8 | 5 | 7 | 48 | 39 | 55 | 56 | 44 | 62 | ||||||
| Gain on sale of assets | 1 | 1 | |||||||||||||
| Total income | 1 549 | 1 590 | 2 122 | 435 | 431 | 576 | 4 | 4 | 6 | (20) | (23) | (31) | 1 968 | 2 002 | 2 673 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (822) | (844) | (1 121) | 16 | 19 | 26 | (807) | (825) | (1 096) | ||||||
| Vessel expenses | (63) | (66) | (86) | (63) | (66) | (86) | |||||||||
| Charter expenses | (247) | (251) | (335) | (247) | (251) | (335) | |||||||||
| Employee benefits | (131) | (117) | (157) | (31) | (28) | (35) | (8) | (9) | (12) | (171) | (154) | (204) | |||
| Other expenses | (56) | (46) | (80) | (328) | (319) | (427) | (5) | (4) | (6) | 4 | 4 | 6 | (385) | (366) | (507) |
| Depreciation and impairment | (108) | (108) | (145) | (11) | (5) | (7) | (118) | (113) | (152) | ||||||
| Total operating expenses | (1 428) | (1 433) | (1 924) | (370) | (352) | (469) | (13) | (14) | (18) | 20 | 23 | 31 | (1 791) | (1 775) | (2 380) |
| Operating profit (EBIT) 2 | 121 | 157 | 198 | 64 | 79 | 107 | (9) | (10) | (12) | (0) | (0) | 0 | 177 | 227 | 293 |
| Financial income/(expenses) | (33) | (6) | (13) | (1) | (1) | (21) | 7 | 6 | (56) | 1 | (8) | ||||
| Profit/(loss) before tax | 88 | 150 | 186 | 64 | 80 | 106 | (30) | (3) | (7) | (0) | (0) | 0 | 121 | 227 | 285 |
| Tax income/(expense) | (10) | (8) | 1 | (7) | (13) | (17) | 8 | 4 | (9) | (21) | (12) | ||||
| Profit/(loss) | 78 | 143 | 186 | 57 | 66 | 90 | (23) | (2) | (2) | (0) | (0) | 0 | 112 | 206 | 273 |
| Of which minority interest | (2) | (2) | (2) | (2) | (2) | (2) | |||||||||
| Profit/(loss) after minority | |||||||||||||||
| interest | 78 | 143 | 186 | 55 | 65 | 88 | (23) | (2) | (2) | (0) | (0) | 0 | 111 | 205 | 272 |
1/2 Comments - see previous page
2014: Material gain/(loss) from disposal of assets and impairment charges (* Included in share of profits from associates and joint ventures)
Shipping: Q1 - No material gain/(loss)
Shipping: Q2 - No material gain/(loss)
Shipping: Q3 - Impairment loss ASL USD 5.5 million.
2013: Material gain/(loss) from disposal of assets and impairment charges (* Included in share of profits from associates and joint ventures)
Shipping: Q1 - No material gain/(loss)
Shipping: Q2 - No material gain/(loss)
Shipping: Q3 - No material gain/(loss)
Shipping: Q4 - No material gain/(loss)
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Total incl elimination | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | |
| QUARTER | 2013 | 2014 | 2014 | 2014 | 2013 | 2014 | 2014 | 2014 | 2013 | 2014 | 2014 | 2014 | 2013 | 2014 | 2014 | 2014 |
| Operating revenue | 529 | 497 | 536 | 508 | 129 | 135 | 136 | 116 | 2 | 1 | 1 | 1 | 651 | 626 | 667 | 619 |
| Other income | ||||||||||||||||
| Share of profit from | ||||||||||||||||
| associates | 3 | 2 | 3 | 3 | 16 | 9 | 12 | 27 | 19 | 11 | 15 | 30 | ||||
| Gain on sale of assets | 1 | 1 | ||||||||||||||
| Total income | 533 | 499 | 539 | 512 | 145 | 144 | 147 | 143 | 2 | 1 | 1 | 1 | 671 | 637 | 682 | 650 |
| Operating expenses | ||||||||||||||||
| Voyage expenses | (277) | (266) | (287) | (268) | (271) | (261) | (282) | (264) | ||||||||
| Vessel expenses | (21) | (22) | (20) | (21) | (21) | (22) | (20) | (21) | ||||||||
| Charter expenses | (84) | (81) | (83) | (83) | (84) | (81) | (83) | (83) | ||||||||
| Employee benefits | (39) | (38) | (58) | (35) | (8) | (9) | (11) | (11) | (3) | (3) | (2) | (3) | (50) | (50) | (71) | (49) |
| Other expenses | (33) | (19) | (18) | (20) | (108) | (113) | (113) | (103) | (1) | (2) | (2) | (1) | (140) | (132) | (131) | (123) |
| Depreciation and impairment | (37) | (35) | (36) | (36) | (2) | (2) | (2) | (7) | (39) | (37) | (38) | (44) | ||||
| Total operating expenses | (491) | (462) | (502) | (464) | (117) | (124) | (125) | (121) | (4) | (5) | (4) | (4) | (604) | (583) | (625) | (584) |
| Operating profit (EBIT) 2 | 41 | 37 | 37 | 47 | 27 | 20 | 22 | 22 | (3) | (4) | (3) | (3) | 66 | 54 | 57 | 66 |
| Financial income/(expenses) | (6) | (13) | (16) | (5) | (1) | (1) | (3) | (15) | (4) | (8) | (16) | (31) | (9) | |||
| Profit/(loss) before tax | 35 | 24 | 21 | 42 | 26 | 20 | 22 | 21 | (4) | (7) | (17) | (6) | 58 | 38 | 26 | 57 |
| Tax income/(expense) | 8 | (5) | (1) | (4) | (3) | (3) | (3) | (0) | 4 | 2 | 4 | 2 | 9 | (6) | 0 | (3) |
| Profit/(loss) | 44 | 20 | 20 | 38 | 23 | 17 | 19 | 21 | 0 | (5) | (13) | (5) | 67 | 32 | 26 | 55 |
| Of which minority interest | (1) | (1) | (1) | (1) | (1) | (1) | ||||||||||
| Profit/(loss) after minority | ||||||||||||||||
| interest | 44 | 20 | 20 | 38 | 23 | 16 | 18 | 21 | 0 | (5) | (13) | (5) | 67 | 31 | 25 | 54 |
1/2 Comments - see previous page
Joint ventures based on proportionate method
| USD mill | 01.07-30.09 | 01.07-30.09 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2013 | |
| Financials | |||||
| Investment management 1 | (0.6) | 8.4 | 9.1 | 8.4 | 13.6 |
| Interest income | 0.6 | 0.7 | 2.8 | 2.1 | 3.0 |
| Other financial items | (0.4) | (0.1) | (9.8) | (0.3) | (0.7) |
| Net financial items | (0.4) | 9.1 | 2.1 | 10.2 | 15.9 |
| Net financials - interes rate | |||||
| Interest expenses | (16.0) | (15.8) | (48.3) | (45.7) | (61.3) |
| Interest rate derivatives - realised | (8.7) | (8.5) | (19.8) | (24.3) | (38.0) |
| Net interest expenses | (24.7) | (24.3) | (68.1) | (70.0) | (99.3) |
| Interest rate derivatives - unrealised | 10.3 | 2.3 | (1.7) | 52.5 | 71.2 |
| Net financial - currency | |||||
| Net currency gain/(loss) | 16.5 | (4.0) | 20.7 | 39.6 | 45.5 |
| Currency derivatives - realised | 2.5 | 0.2 | (0.8) | (3.8) | (7.7) |
| Currency derivatives - unrealised | 6.0 | (4.8) | 10.3 | (12.4) | (13.7) |
| Cross currency derivatives - realised | 1.0 | 1.1 | 9.7 | 2.4 | 3.4 |
| Cross currency derivatives - unrealised | (20.0) | 7.2 | (27.6) | (17.2) | (19.8) |
| Net currency items | 6.0 | (0.3) | 12.3 | 8.7 | 7.7 |
| Financial derivaties bunkers | |||||
| Valuation of bunker hedges | (0.6) | (0.3) | (0.7) | (3.2) | |
| Net financial derivatives bunkers | 0.0 | (0.6) | (0.3) | (0.7) | (3.2) |
| Financial income/(expenses) | (8.8) | (13.9) | (55.6) | 0.7 | (7.7) |
1 Includes financial derivatives for trading
| USD mill | 01.07-30.09 | 01.07-30.09 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2013 | |
| Cash settled bunker and fuel hedges | 0.0 | 2.7 | 0.5 | 7.6 | 12.3 |
Joint ventures based on proportionate method
Related party transactions (Time charter income, space charter and other income from terminal activities) between Eukor Car Carriers Inc (Eukor) and Wallenius Wilhelmsen Logistics AS (WWL) is eliminated in the consolidated accounts.
During 2014 the group has reviewed and analysed the intercompany transactions between the group joint venture's WWL and EUKOR. EUKOR revenues where
WWL acted as collector has previously been eliminated in the consolidated accounts. These revenues are a part of the group revenues in Income statement based on proportionate consolidation for joint ventures. The adjustments have no effect on EBIT or net profit.
The 2013 figures are restated and showed below.
| As reported | Restated figures | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | Shipping | Total incl elimination | Restatement | Shipping | Total incl elimination | |||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| QUARTER | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 2013 2013 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | |||
| Operating revenue | 476 | 517 | 483 | 489 | 597 | 640 | 612 | 610 | 32 | 38 | 40 | 41 | 507 | 554 | 523 | 529 | 628 | 678 | 651 | 651 |
| Other income Share of profit from |
||||||||||||||||||||
| associates | 2 | 1 | 2 | 3 | 17 | 11 | 15 | 19 | 2 | 1 | 2 | 3 | 17 | 11 | 15 | 19 | ||||
| Gain on sale of assets | 1 | 1 | 1 | 1 | ||||||||||||||||
| Total income | 477 | 518 | 486 | 492 | 614 | 652 | 627 | 630 | 32 | 38 | 40 | 41 | 509 | 556 | 525 | 533 | 646 | 689 | 667 | 671 |
| Operating expenses | ||||||||||||||||||||
| Voyage expenses | (231) (245) (232) (227) (226) (239) (224) (220) | (39) | (47) | (50) | (51) | (270) (291) (282) (277) (265) (285) (274) (271) | ||||||||||||||
| Vessel expenses | (23) | (21) | (22) | (21) | (23) | (21) | (22) | (21) | (23) | (21) | (22) | (21) | (23) | (21) | (22) | (21) | ||||
| Charter expenses Employee benefits |
(82) (39) |
(89) (38) |
(80) (40) |
(84) (39) |
(82) (51) |
(89) (50) |
(80) (53) |
(84) (50) |
(82) (39) |
(89) (38) |
(80) (40) |
(84) (39) |
(82) (51) |
(89) (50) |
(80) (53) |
(84) (50) |
||||
| Other expenses | (25) | (26) | (23) | (43) (128) (132) (133) (151) | 8 | 9 | 10 | 10 | (17) | (17) | (13) | (33) (120) (123) (122) (140) | ||||||||
| Depreciation and | ||||||||||||||||||||
| impairment | (36) | (37) | (36) | (37) | (38) | (38) | (38) | (39) | (36) | (37) | (36) | (37) | (38) | (38) | (38) | (39) | ||||
| Total operating | ||||||||||||||||||||
| expenses | (435) (456) (433) (451) (547) (570) (549) (564) | (32) | (38) | (40) | (41) | (467) (494) (473) (491) (579) (608) (589) (604) | ||||||||||||||
| Operating profit | ||||||||||||||||||||
| (EBIT) 2 | 42 | 62 | 53 | 41 | 67 | 82 | 78 | 66 | 0 | 0 | 0 | 0 | 42 | 62 | 53 | 41 | 67 | 82 | 78 | 66 |
| Financial | ||||||||||||||||||||
| income/(expenses) | (5) | 8 | (9) | (6) | (7) | 22 | (14) | (8) | (5) | 8 | (9) | (6) | (7) | 22 | (14) | (8) | ||||
| Profit/(loss) before | ||||||||||||||||||||
| tax | 38 | 69 | 43 | 35 | 60 | 104 | 64 | 58 | 0 | 0 | 0 | 0 | 38 | 69 | 43 | 35 | 60 | 104 | 64 | 58 |
| Tax income/(expense) | (3) | (3) | (1) | 8 | (5) | (12) | (4) | 9 | (3) | (3) | (1) | 8 | (5) | (12) | (4) | 9 | ||||
| Profit/(loss) | 35 | 66 | 42 | 44 | 54 | 92 | 60 | 67 | 0 | 0 | 0 | 0 | 35 | 66 | 42 | 44 | 54 | 92 | 60 | 67 |
| Of which minority | ||||||||||||||||||||
| interest | (1) | (1) | ||||||||||||||||||
| Profit/(loss) after | ||||||||||||||||||||
| minority interest | 35 | 66 | 42 | 44 | 54 | 92 | 59 | 67 | 0 | 0 | 0 | 0 | 35 | 66 | 42 | 44 | 54 | 92 | 59 | 67 |
1 The report is based on the proportionate method for all joint ventures.
2Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
| USD million | 2014 Q3 2014 Q2 2014 YTD 2013 YTD 2013 Q3 2013 FY | |||||
|---|---|---|---|---|---|---|
| Total income | 117 | 111 | 333 | 392 | 130 | 508 |
| EBITDA | 80 | 65 | 209 | 261 | 87 | 337 |
| EBIT | 61 | 46 | 152 | 199 | 67 | 255 |
| Net profit/(loss) | 54 | 25 | 111 | 205 | 59 | 272 |
| Earnings per share (USD) | 0.25 | 0.11 | 0.50 | 0.93 | 0.27 | 1.23 |
Decline in volumes transported deep‐sea and unfavourable cargo and trade mix were the main reasons for the weaker results in the third quarter compared with second quarter.
The quarter was also characterised by reduced logistics activity, mainly related to the considerably reduced activity in ASL following the loss of the Privately Owned Vehicle contract.
The operating profit for the group totalled USD 61 million for the third quarter (USD 67 million) based on a total income of USD 117 million (USD 130 million). The similar figures for the first nine months were USD 152 million (USD 199 million) and USD 333 million (USD 392 million).
Hyundai Glovis contributed with a non‐recurring gain of USD 12 million in the third quarter of 2014, positively affecting the operating profit and total income. The gain resulted from the merger of Amco and Hyundai Engineering in the second quarter. The operating profit and total income were also negatively impacted by non‐recurring items totalling USD 10 million related to impairment and restructuring costs in ASL.
In the same quarter last year, the operating profit was negatively affected by an accrual of USD 3 million related to internal restructuring of the organisation. Adjusted for non‐recurring items, the operating profit was USD 57 million (USD 70 million), while the total income was USD 113 million (132 million).
Financial expense for the quarter amounted to USD 5 million (USD 11 million), while the expense year to date was USD 41 million (income of USD 12 million).
Net interest expenses decreased from the second quarter by USD 1 million totaling USD 20 million in the third quarter, mainly due to lower interest expenses.
Long‐term USD interest rates at end of quarter were roughly at the same level as at the beginning of the quarter. However, medium term rates increased, resulting in an unrealised gain on interest rate derivatives of USD 9 million (gain of USD 3 million).
Net currency items in the quarter came out with a gain of USD 7 million (loss of USD 2 million), mainly due to appreciation of the USD.
Group profit before tax amounted to USD 56 million (USD 57 million) for the quarter, and USD 110 million (USD 211 million) for the first nine months.
The group recorded a tax expense of USD 2 million for the quarter (income of USD 3 million), while the total tax expense year to date amounted to USD zero million (expense of USD 6 million).
Net profit after tax amounted to USD 54 million (USD 59 million) for the period, and USD 111 million (USD 205 million) for the first nine months.
WWASA's board of directors has, based on an authorisation granted by the annual general meeting on 24 April 2014, resolved to pay a second dividend of NOK 1.00 per share, totaling USD 34 million. The shares will be traded ex dividend on Friday 14 November.
WWASA expects to pay the dividend on or about 27 November 2014.
Despite a clarification in Japan in March 2014, WWL and EUKOR continue to be part of anti‐trust investigations of the car carrying industry in several jurisdictions, including the US and the EU.
WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are part of. However, WWASA expects further clarification within 2015.
Cost of process management related to the investigations is charged on an ongoing basis.
The board of WWASA anticipates the group's profitability to continue to be negatively affected by the challenging market sentiment.
Volumes transported deep sea and handled at the group's logistics facilities is expected to increase slightly in the fourth quarter compared with the previous quarter.
Short term, a decrease in the bunker price will have a positive effect on net bunker cost.
WWASA has a strong financial position with a healthy balance sheet. The group is positioned to meet the challenges in the industry and act upon market opportunities.
| USD mill | Notes | 01.07-30.09 | 01.07-30.09 | YTD | YTD | Full year |
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2013 | ||
| Operating revenue | 71 | 77 | 210 | 241 | 325 | |
| Other income | ||||||
| Share of profit from joint ventures and associates | 46 | 53 | 123 | 150 | 182 | |
| Gain on sale of assets | 2 | 1 | ||||
| Total income | 117 | 130 | 333 | 392 | 508 | |
| Operating expenses | ||||||
| Vessel expenses | (11) | (13) | (36) | (41) | (53) | |
| Charter expenses | (6) | (7) | (17) | (21) | (28) | |
| Employee benefits | (16) | (20) | (60) | (60) | (79) | |
| Other expenses | (3) | (3) | (10) | (9) | (11) | |
| Depreciation and impairment | 3 | (19) | (20) | (57) | (62) | (82) |
| Total operating expenses | (56) | (63) | (181) | (192) | (253) | |
| Operating profit (EBIT) | 61 | 67 | 152 | 199 | 255 | |
| Financial income/(expenses) | 4 | (5) | (11) | (41) | 12 | 9 |
| Profit before tax | 56 | 57 | 110 | 211 | 264 | |
| Tax income/(expense) | (2) | 3 | (6) | 7 | ||
| Profit for the period attributable to the owners of the parent | 54 | 59 | 111 | 205 | 272 | |
| Basic and diluted earnings per share (USD)* | 0.25 | 0.27 | 0.50 | 0.93 | 1.23 |
* EPS is calculated based on 220 000 000 shares.
| Total comprehensive income attributable to owners of the parent | 51 | 62 | 114 | 206 | 264 |
|---|---|---|---|---|---|
| Other comprehensive income, net of tax | (3) | 2 | 3 | 1 | (8) |
| Remeasurement postemployment benefits, net of tax | 0 | 0 | (9) | ||
| Items that will not be reclassified to income statement | |||||
| Currency translation differences | (3) | 1 | (3) | 1 | 1 |
| Reclassification of revaluation of previously held interest in Norwegian Car Carriers ASA | 5 | ||||
| Fair value adjustment available-for-sale financial assets | 1 | 0 | 0 | (0) | |
| Items that will be reclassified to income statement | |||||
| Other comprehensive income | |||||
| Profit/(loss) for the period | 54 | 59 | 111 | 205 | 272 |
| USD mill Notes |
01.07-30.09 2014 |
01.07-30.09 2013 |
YTD 2014 |
YTD 2013 |
Full year 2013 |
The above consolidated income statement and comprehensive income should be read in conjunction with the accompanying notes.
| USD mill | Notes | 30.09.2014 | 30.09.2013 | 31.12.2013 |
|---|---|---|---|---|
| Non current assets | ||||
| Goodwill and other intangible assets | 3 | 6 | 6 | 6 |
| Investments in vessels and other tangible assets | 3 | 1 777 | 1 826 | 1 821 |
| Pension assets | 1 | |||
| Investments in joint ventures and associates | 1 204 | 1 096 | 1 120 | |
| Other non current assets | 7 | 5 | ||
| Total non current assets | 2 988 | 2 936 | 2 952 | |
| Current assets | ||||
| Current financial investments | 246 | 245 | 254 | |
| Other current assets | 54 | 30 | 25 | |
| Cash and cash equivalents | 219 | 197 | 157 | |
| Total current assets | 520 | 472 | 436 | |
| Total assets | 3 507 | 3 408 | 3 388 | |
| Equity | ||||
| Share capital | 6 | 30 | 30 | 30 |
| Retained earnings and other reserves | 1 679 | 1 570 | 1 602 | |
| Total equity attributable to owners of the parent | 1 709 | 1 600 | 1 632 | |
| Non current liabilities | ||||
| Pension liabilities | 56 | 52 | 60 | |
| Deferred tax | 40 | 69 | 51 | |
| Non current interest-bearing debt | 8 | 1 309 | 1 438 | 1 320 |
| Other non current liabilities | 131 | 112 | 95 | |
| Total non current liabilites | 1 536 | 1 672 | 1 527 | |
| Current liabilities | ||||
| Current income tax liabilities | 2 | 2 | ||
| Public duties payable | 1 | 1 | 1 | |
| Other current liabilities | 259 | 136 | 225 | |
| Total current liabilities | 262 | 137 | 229 | |
| Total equity and liabilities | 3 507 | 3 408 | 3 388 |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | Note | 01.07-30.09 01.07-30.09 | YTD | YTD | Full year | |
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2013 | ||
| Cash flow from operating activities | ||||||
| Profit before tax | 56 | 57 | 110 | 211 | 264 | |
| Financial income/(expenses) | 23 | 21 | 18 | 32 | ||
| Financial derivatives unrealised | 6 | (4) | 20 | (21) | (35) | |
| Depreciation/impairment | 4 | 19 | 20 | 57 | 62 | 82 |
| (Gain)/loss on sale of fixed assets | 1 | 1 | (1) | |||
| Change in net pension asset/liability | (3) | (5) | (6) | (8) | ||
| Other change in working capital | (8) | (13) | 21 | (9) | (1) | |
| Share of profit from joint ventures and associates | (46) | (53) | (123) | (150) | (182) | |
| Dividend received from joint ventures and associates | 5 | 1 | 36 | 32 | 42 | |
| Tax paid (company income tax, witholding tax) | (1) | 2 | (3) | 1 | 1 | |
| Net cash provided by/(used in) operating activities | 28 | 34 | 136 | 138 | 194 | |
| Cash flow from investing activities | ||||||
| Proceeds from sale of fixed assets | 7 | 9 | 15 | 9 | 14 | |
| Investments in vessels, other tangible and intangible assets | 4 | (9) | (30) | (28) | (47) | |
| Loan repayments received from joint ventures and associates | 3 | 3 | ||||
| Repayments of loan from joint ventures and associates | (3) | (3) | ||||
| Proceeds from sale of investment held for sale | 6 | |||||
| Proceeds from sale of financial investments | 13 | 22 | 54 | 67 | 90 | |
| Investments in financial investments | (14) | (15) | (56) | (175) | (201) | |
| Dividend received (financial investments) | 2 | 1 | 1 | |||
| Interest received | 2 | 1 | 1 | |||
| Net cash flow provided by/(used in) investing activities | (2) | 17 | (7) | (126) | (142) | |
| Cash flow from financing activities | ||||||
| Proceeds from issue of debt | 177 | 312 | 122 | 122 | ||
| Repayment of debt | (155) | (13) | (300) | (71) | (100) | |
| Interest paid including interest derivatives Cash from other financial derivatives |
(22) 3 |
(24) 1 |
(51) 8 |
(60) (1) |
(81) (4) |
|
| Dividend to shareholders | (37) | (150) | (177) | |||
| Net cash flow provided by/(used in) financing activities | 3 | (36) | (67) | (160) | (240) | |
| Net increase in cash and cash equivalents | 29 | 15 | 62 | (147) | (187) | |
| Cash and cash equivalents, excluding restricted cash, at beginning of period | 189 | 181 | 157 | 344 | 344 | |
| Currency on cash and cash equivalents* | ||||||
| Cash and cash equivalents at end of period | 219 | 197 | 219 | 197 | 157 |
* 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 | Premium fund | Other reserves | Retained earnings |
Total equity |
|---|---|---|---|---|---|
| Balance at 31.12.2013 | 30 | 89 | (3) | 1 513 | 1 632 |
| Profit for the year | 111 | 111 | |||
| Other comprehensive income | 3 | 3 | |||
| Paid dividends to shareholders | (37) | (37) | |||
| Balance 30.09.2014 | 30 | 89 | 0 | 1 588 | 1 709 |
| Balance at 31.12.2012 | 30 | 89 | 4 | 1 418 | 1 544 |
| Profit for the year | 205 | 205 | |||
| Other comprehensive income | 1 | 1 | |||
| Paid dividends to shareholders | (150) | (150) | |||
| Balance 30.09.2013 | 30 | 89 | 5 | 1 474 | 1 600 |
| Balance 31.12.2013 | 30 | 89 | (3) | 1 513 | 1 632 |
|---|---|---|---|---|---|
| Paid dividends to shareholders | (177) | (177) | |||
| Other comprehensive income | (8) | (8) | |||
| Profit for the year | 272 | 272 | |||
| Balance at 31.12.2012 | 30 | 89 | 4 | 1 418 | 1 544 |
| USD mill | Share capital | Premium fund | Other reserves | Retained earnings |
Total equity |
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 2013 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 2013.
IFRS 10 «Consolidated Financial Statements», IFRS 11 «Joint Arrangements» and IFRS 12 "Disclosure of Interest in Other Entities" have been implemented for annual periods beginning 1 January 2014.
According to IFRS 11 a joint arrangement is either a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
The group has assessed its rights and obligations and concluded that all joint arrangements are joint ventures that should be consolidated according to the equity method. Hence, the implementation of the new standards have not had any effect on the group's consolidation of their investment into the financial statements.
There are no new standards or amendments to standards released during 2014.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
2014 - There has not been any significant acquisitions or disposals during the first half of 2014.
2013 - There has not been any significant acquisitions or disposals during 2013.
| Vessels & | ||||
|---|---|---|---|---|
| Other tangible | Newbuilding | Total tangible | Intangible | |
| USD mill | assets | contracts | assets | assets |
| 2014 | ||||
| Cost price 01.01 | 2 | 2 467 | 2 469 | 7 |
| Additions | 30 | 30 | ||
| Disposal | (99) | (100) | ||
| Cost price 30.09 | 2 | 2 398 | 2 399 | 7 |
| Accumulated depreciation and impairment losses 01.01 | (1) | (647) | (649) | (1) |
| Depreciation | (57) | (57) | ||
| Disposal | 82 | 83 | ||
| Accumulated depreciation and impairment losses 30.09 | (1) | (622) | (624) | (1) |
| Carrying amounts 30.09 | 1 | 1 776 | 1 777 | 6 |
| 2013 | ||||
| Cost price 01.01 | 2 | 2 508 | 2 510 | 8 |
| Additions | 47 | 47 | ||
| Disposal | (88) | (89) | (1) | |
| Cost price 31.12 | 2 | 2 467 | 2 469 | 7 |
| Accumulated depreciation and impairment losses 01.01 | (1) | (641) | (643) | (2) |
|---|---|---|---|---|
| Depreciation | (82) | (82) | ||
| Disposal | 76 | 76 | 1 | |
| Accumulated depreciation and impairment losses 31.12 | (1) | (647) | (649) | (1) |
| Carrying amounts 31.12 | 1 | 1 820 | 1 821 | 6 |
Joint ventures based on equity method
| USD mill | 01.07-30.09 | 01.07-30.09 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2013 | |
| Financials | |||||
| Investment management 1 | (0.6) | 8.4 | 8.9 | 8.1 | 13.3 |
| Interest incomes | 0.3 | 0.3 | 1.7 | 0.9 | 1.3 |
| Other financial items | (0.4) | (0.4) | (9.7) | (1.2) | (1.6) |
| Net financial items | (0.7) | 8.3 | 0.9 | 7.8 | 13.0 |
| Net financials - interes rate | |||||
| Interest expenses | (11.5) | (11.7) | (35.5) | (33.3) | (44.7) |
| Interest rate derivatives - realised | (8.1) | (7.9) | (17.9) | (23.0) | (36.2) |
| Net interest expenses | (19.6) | (19.6) | (53.3) | (56.3) | (80.9) |
| Interest rate derivatives - unrealised | 9.3 | 2.5 | (2.0) | 50.5 | 68.3 |
| Net financial - currency | |||||
| Net currency gain/(loss) | 18.5 | (4.7) | 22.8 | 40.6 | 46.3 |
| Currency derivatives - realised | 2.1 | 0.4 | (1.3) | (3.3) | (7.3) |
| Currency derivatives - unrealised | 4.9 | (5.7) | 9.4 | (12.4) | (13.7) |
| Cross currency derivatives - realised | 1.0 | 1.1 | 9.7 | 2.4 | 3.4 |
| Cross currency derivatives - unrealised | (20.0) | 7.2 | (27.6) | (17.2) | (19.8) |
| Net financial - currency | 6.5 | (1.8) | 13.1 | 10.1 | 8.9 |
| Financial income/(expenses) | (4.5) | (10.5) | (41.3) | 12.2 | 9.4 |
1 Includes financial derivatives for trading
Wilhelmsen Lines Shipowning (WLS) has commenced legal proceedings before Oslo City Court on basis of the tax appeal board's decision to turn down the application for tonnage tax. Basis for the proceedings is that the transition rule valid for companies that exited the old tonnage tax regime (abolished in 2007) into ordinary taxation, is in breach with The Constitution article 97. Such claim is in line with the decision by the Norwegian Supreme Court in the ruling of February 2010 that the transition rule valid for companies that exited the old tonnage tax regime into the new tonnage tax system was in breach with the constitution. Alternatively WLS claim a compensation for the economic loss caused by the unconstitutional transition rule. WLS had to choose between two transition rules which both
originally was claimed by the authorities to be constitutional. WLS choice to exit into ordinary taxation was hence based on wrong assumptions.
Until we face the final outcome of the litigation process, this case will have no impact on the income statement or balance sheet for the group.
Number of shares NOK mill USD mill
The effective tax rate for the 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.
The company's share capital is as follows:
Share capital 220 000 000 220 30
Joint ventures based on equity method
Dividend for fiscal year 2012 of NOK 4.00 per share, total of approximately USD 150 million, was paid to the shareholders in May 2013. The dividend had effect on retained earnings and other reserves in the second quarter of 2013.
Based on the company's distributable equity as of 31 December 2012 (less dividend paid in the first half of 2013), an additional dividend of NOK 0.75 per share, total of approximately USD 27 million, was paid in December 2013. The dividend had effect on retained earnings and other reserves in fourth quarter of 2013.
Dividend for fiscal year 2013 of NOK 1.00 per share, total of approximately USD 37 million, was paid to the shareholders in May 2014.
The dividend had effect on retained earnings and other reserves in the second quarter of 2014.
Based on the company's distributable equity as of 31 December 2013 (less dividend paid in the first half of 2014), the board will propose to pay a dividend of NOK 1.00 per share.
The dividend will have effect on retained earnings and other reserves in fourth quarter of 2014.
| USD mill | 30.09.2014 | 30.09.2013 | 31.12.2013 |
|---|---|---|---|
| Non current interest-bearing debt | 1 309 | 1 438 | 1 320 |
| Current interest-bearing debt | 176 | 97 | 182 |
| Total interest-bearing debt | 1 485 | 1 535 | 1 502 |
| Cash and cash equivalents | 219 | 197 | 157 |
| Current financial investments | 246 | 245 | 254 |
| Net interest bearing debt | 1 020 | 1 093 | 1 092 |
| Net interest bearing debt in Joint Ventures (group's share) | 30.09.2014 | 30.09.2013 | 31.12.2013 |
| Non current interest-bearing debt | 582 | 544 | 550 |
| Current interest-bearing debt | 78 | 93 | 95 |
| Total interest-bearing debt | 660 | 638 | 646 |
| Cash and cash equivalents | 216 | 237 | 266 |
| Current financial investments | |||
| Net interest bearing debt | 444 | 401 | 380 |
| Specification of interest-bearing debt | 30.09.2014 | 30.09.2013 | 31.12.2013 |
| Interest-bearing debt | |||
| Mortgages | 948 | 1 007 | 974 |
| Leasing commitments | 86 | 88 | 90 |
| Bonds | 451 | 440 | 439 |
| Total interest-bearing debt | 1 485 | 1 535 | 1 502 |
| Repayment schedule for interest-bearing debt | |||
| Due in year 1 | 108 | 33 | 183 |
| Due in year 2 | 91 | 184 | 98 |
| Due in year 3 | 200 | 98 | 399 |
| Due in year 4 | 91 | 401 | 79 |
| Due in year 5 and later | 995 | 819 | 743 |
| Total interest-bearing debt | 1 485 | 1 535 | 1 502 |
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 | ||||
| Financial derivatives | 11 | 11 | ||
| Equities | 79 | 79 | ||
| Bonds | 145 | 21 | 166 | |
| Available-for-sale financial assets | 0 | |||
| Other financial assets | 0 | |||
| Total financial assets 30.09.2014 | 225 | 32 | 0 | 257 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 130 | 130 | ||
| Total financial liabilities 30.09.2014 | 0 | 130 | 0 | 130 |
| Financial assets at fair value | ||||
| Financial derivatives | 0 | |||
| Equities | 59 | 59 | ||
| Bonds | 179 | 15 | 0 | 194 |
| Available-for-sale financial assets | 4 | 4 | ||
| Other financial assets | 0 | |||
| Total financial assets 31.12.2013 | 242 | 15 | 0 | 258 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 99 | 99 | ||
| Total financial liabilities 31.12.2013 | 0 | 99 | 0 | 99 |
| 2014 | 2013 | |||
| 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 | |||||||||||
| Q3 | Q3 | year | Q3 | Q3 | year | Q3 | Q3 | year | Q3 | Q3 | year | Q3 | Q3 | year | |
| QUARTER | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 |
| Total income | 71 | 77 | 324 | 1 | 1 | 6 | (1) | (1) | (5) | 71 | 77 | 325 | |||
| Share of profit from joint ventures | |||||||||||||||
| and associates 1 | 25 | 30 | 95 | 21 | 23 | 88 | 46 | 53 | 182 | ||||||
| Gain on sale of assets | 1 | 1 | |||||||||||||
| Total income | 96 | 107 | 420 | 21 | 23 | 88 | 1 | 1 | 6 | (1) | (1) | (5) | 117 | 130 | 508 |
| Primary operating profit | 62 | 68 | 262 | 21 | 23 | 88 | (3) | (4) | (12) | 80 | 87 | 337 | |||
| Depreciation and impairment | (19) | (20) | (82) | (19) | (20) | (82) | |||||||||
| Operating profit (EBIT) | 43 | 48 | 179 | 21 | 23 | 88 | (3) | (4) | (12) | (0) | (0) | 0 | 61 | 67 | 255 |
| Financial income/(expense) | (1) | (6) | 4 | (4) | (4) | 6 | (5) | (11) | 9 | ||||||
| Profit/(loss) before tax | 42 | 42 | 183 | 21 | 23 | 88 | (6) | (8) | (7) | (0) | (0) | 0 | 56 | 57 | 264 |
| Tax income/(expenses) | (4) | 3 | 2 | 2 | 4 | (2) | 3 | 7 | |||||||
| Profit/(loss) for the period | |||||||||||||||
| attributable to the owners of the | |||||||||||||||
| parent | 38 | 42 | 186 | 21 | 23 | 88 | (5) | (6) | (2) | (0) | (0) | 0 | 54 | 59 | 272 |
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | Full | Full | Full | Full | |||||||||||
| YTD | YTD | year | YTD | YTD | year | YTD | YTD | year | YTD | YTD | year | YTD | YTD | year | |
| Year to date | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | 2014 | 2013 | 2013 |
| Total income | 210 | 241 | 324 | 4 | 4 | 6 | (4) | (4) | (5) | 210 | 241 | 325 | |||
| Share of profit from joint ventures | |||||||||||||||
| and associates 1 | 67 | 85 | 95 | 55 | 65 | 88 | 123 | 150 | 182 | ||||||
| Gain on disposal of assets | 1 | 1 | |||||||||||||
| Total income | 277 | 326 | 420 | 55 | 65 | 88 | 4 | 4 | 6 | (4) | (4) | (5) | 333 | 392 | 508 |
| Primary operating profit | 162 | 205 | 262 | 55 | 65 | 88 | (9) | (9) | (12) | 209 | 261 | 337 | |||
| Depreciation and impairment | (57) | (61) | (82) | (57) | (62) | (82) | |||||||||
| Operating profit | 105 | 144 | 179 | 55 | 65 | 88 | (9) | (10) | (12) | (0) | (0) | 0 | 152 | 199 | 255 |
| Financial income/(expenses) | (20) | 5 | 4 | (21) | 7 | 6 | (41) | 12 | 9 | ||||||
| Profit/(loss) before tax | 85 | 149 | 183 | 55 | 65 | 88 | (30) | (3) | (7) | (0) | (0) | 0 | 110 | 211 | 264 |
| Tax income/(expense) | (7) | (7) | 3 | 8 | 4 | (6) | 7 | ||||||||
| Profit/(loss) for the period | |||||||||||||||
| attributable to the owners of the | |||||||||||||||
| parent | 78 | 143 | 186 | 55 | 65 | 88 | (23) | (2) | (2) | (0) | (0) | 0 | 111 | 205 | 272 |
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
WWL and EUKOR continue to be part of anti-trust investigations of the car carrying industry in several jurisdictions, including the US and the EU.
WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are part of. However, WWASA expects further clarification during 2015.
No material events occurred between the balance sheet date and the date when the accounts were presented providing new information
the 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.
Cost of process management related to the investigations is charged on an ongoing basis.
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
| > Mixed bag |
Light Vehicle Sales in Key Markets [Million Units] | |||||||
|---|---|---|---|---|---|---|---|---|
| Quarterly sales | Quarterly change | Annual sales/ Forecast | ||||||
| REGION | Q3 '13 |
Q2 '14 |
Q3 '14 |
Y-o-Y | Q-o-Q | 2013 | 2014 | 2015 |
| N America | 4,68 | 5,23 | 5,08 | 9% | -3 % | 18,4 | 19,1 | 19,4 |
| Europe (excl. Ru. & Tu.) |
3,23 | 3,89 | 3,34 | 5 % | -13 % | 13,8 | 14,5 | 15,0 |
| Oceania | 0,31 | 0,32 | 0,30 | -1% | -7 % | 1,2 | 1,2 | 1,2 |
| BRICs | 7,27 | 7,84 | 7,28 | 0% | -7% | 30,8 | 32,2 | 34,2 |
| Brazil | 0,94 | 0,82 | 0,80 | -16% | -3 % | 3,6 | 3,4 | 3,4 |
| Russia | 0,71 | 0,63 | 0,54 | -24% | -13 % | 2,8 | 2,5 | 2,5 |
| India | 0,71 | 0,66 | 0,76 | 7 % | 16 % | 3,0 | 3,0 | 3,4 |
| China | 4,91 | 5,73 | 5,18 | 6 % | -10 % | 21,4 | 23,3 | 24,9 |
| Source: GMI, WWL Shaping the maritime industry |
8 |
| USD mill | 2014 Q3 | 2014 Q2 | 2014 YTD 2013 YTD | 2013 Q3 | 2013 FY | |
|---|---|---|---|---|---|---|
| Operating income | 619 | 667 | 1 912 | 1 958 | 651 | 2 609 |
| Gain on sale of assets Share of profits from JV's and associates |
30 | 15 | 56 | 44 | 15 | 1 62 |
| Total income | 650 | 682 | 1 968 | 2 002 | 667 | 2 673 |
| EBITDA | 110 | 95 | 295 | 340 | 116 | 445 |
| Depreciation and impairments | (44) | (38) | (118) | (113) | (38) | (152) |
| EBIT | 66 | 57 | 177 | 227 | 78 | 293 |
| Financial income/(expense) | (9) | (31) | (56) | 1 | (14) | (8) |
| Profit/(loss) before tax | 57 | 26 | 121 | 227 | 64 | 285 |
| Net profit 1) | 1 54 |
25 | 1 111 |
1 205 |
1 59 |
1 272 |
| Earnings per share (USD) | 0,25 | 0,11 | 0,50 | 0,93 | 0,27 | 1,23 |
| USD mill | 2014 Q3 | 2014 Q2 | 2014 YTD | 2013 YTD | 2013 FY |
|---|---|---|---|---|---|
| Net financial items | (0,4) | (2,4) | 2,1 | 10,2 | 15,9 |
| Net i nterest expenses | (24,7) | (25,4) | (68,1) | (70,0) | (99,3) |
| Interest rate derivatives - unrealised | 10,3 | (6,4) | (1,7) | 52,5 | 71,2 |
| Net financial - currency | 6,0 | 3,5 | 12,3 | 8,7 | 7,7 |
| Net financial derivati ves bunkers | 0,0 | (0,1) | (0,3) | (0,7) | (3,2) |
| Financial income/(expense) | (8,8) | (30,8) | (55,6) | 0,7 | (7,7) |
Shaping the maritime industry 21
| WWASA Group - Balance sheet | ||||||
|---|---|---|---|---|---|---|
| Strong financial flexibility | ||||||
| USD mill | 30.09.2014 | 30.06.2014 | 31.12.2013 | |||
| Assets | ||||||
| Non current assets | 2 988 | 85 % | 2 967 | 86 % | 2 952 | 87 % |
| Current assets (excl liquid funds) | 54 | 2 % | 34 | 1 % | 25 | 1 % |
| Liquid funds | 465 | 13 % | 450 | 13 % | 411 | 12 % |
| Total assets | 3 507 | 100 % | 3 451 | 100 % | 3 388 | 100 % |
| Equity & liabilities | ||||||
| Equity | 1 709 | 49 % | 1 658 | 48 % | 1 632 | 48 % |
| Non current interest-bearing debt | 1 309 | 37 % | 1 308 | 38 % | 1 320 | 39 % |
| Other non current liabilities | 227 | 6 % | 226 | 7 % | 206 | 6 % |
| Current liabilities | 262 | 7 % | 259 | 7 % | 229 | 7 % |
| Total equity and liabilities | 3 507 | 100 % | 3 451 | 100 % | 3 388 | 100 % |
| Equity method |
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