Quarterly Report • Aug 6, 2015
Quarterly Report
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17 September 2015 Capital markets day 11 November 2015 Q3 2015 results and presentation 11 February 2016 Q4 2015 results and presentation
| WWASA GROUP (USD MIII) | ||||||
|---|---|---|---|---|---|---|
| Total income | 2015 Q 2 | 2015 Q1 | 2015 YTD | 2014 YTD | 2014 Q 2 | 2014 FY |
| Total | 596 | 609 | 1,205 | 1,318 | 682 | 2,592 |
| Shipping | 470 | 460 | 930 | 1.038 | 539 | 2.051 |
| Logistics | 134 | 155 | 289 | 292 | 147 | 560 |
| Holding and investments | 1 | 1 | 3 | 3 | 1 | 6 |
| EBITDA | 2015 Q2 | 2015 Q1 | 2015 YTD | 2014 YTD | 2014 Q 2 | 2014 FY |
| Total | 113 | 136 | 249 | 185 | 95 | 413 |
| Shipping | 96 | 96 | 191 | 145 | 73 | 323 |
| Logistics | 19 | 42 | 61 | 46 | 24 | 91 |
| Holding and investments | (2) | (2) | (4) | (6) | (3) | (1) |
| EBIT | 2015 Q2 | 2015 Q1 | 2015 YTD | 2014 YTD | 2014 Q2 | 2014 FY |
| Total | 73 | 98 | 171 | 111 | 57 | 253 |
| Shipping | 58 | 59 | 117 | 74 | 37 | 176 |
| Logistics | 18 | 40 | 58 | 43 | 22 | 79 |
| Holding and investments | (2) | (2) | (4) | (6) | (3) | (1) |
| Net profit after minority | 70 | 56 | 126 | 56 | 25 | 166 |
The total income for the Wilh. Wilhelmsen ASA group (WWASA) was USD 596 million, down 2% from first quarter 2015. The operating profit ended at USD 73 million, in line with previous quarter adjusted for non-recurring items.
The market for transportation of auto and high and heavy volumes reamained competitive. The second quarter was characterised by a seasonal increase in ocean transportation volumes and improved underlying contribution from the logistics segment.
Adjusted for the gain from the share reduction in Hyundai Glovis in the first quarter 2015 and the loss from recycling one vessel in the second quarter, the total income totalled USD 596 million and the operating profit USD 74 million in the second quarter compared with USD 583 million and USD 72 million respectively in the first quarter. Figure 1 Total income and EBIT (group)
The total income from the shipping segment was USD 470 million and operating profit totalled USD 58 million, up 2% and down 2% respectively compared with the previous quarter.
WWASA's operating entities transported 19.5 million cubic metres (CBM) in the second quarter, a 6% increase quarter on quarter driven by seasonally higher demand for transportation of cars.
Reduced bunker compensation resulted in lower total income and increased net bunker cost in the second quarter. Combined with higher planned and unplanned off-hire, this had a negative effect on operating profit when comparing the second and the first quarter.
Auto volumes increased in all trades, except Asia to Europe, which came in on par with the first quarter.
The auto trade composition mirrors sales figures. North America and Oceania recorded increased sales, while sales in BRICs declined. India, Brazil, and China recorded the largest percentage drop in sales, while Russian sales figures remained weak. The European auto sales came in on par with the previous quarter.
Asian auto volumes transported on Wallenius Wilhelmsen Logistics' (WWL) vessels kept up with the previous quarter although Japanese volumes were lower. Japanese car export was down 6% compared with the previous quarter which was positively impacted by the end of the Japanese fiscal year.
Export from Korea was up from the first quarter. Korea has seen a flattening of export figures in the last few years, fluctuating around 750 000 unites per quarter (3 million/year), while foreign production of Korean branded cars grew. EUKOR Car Carrier's (EUKOR) share of the total export from Korea to the Americas increased, while export to Europe came in on par with the first quarter.
Auto volumes was also positively impacted by a new ocean contract for privately owned vehicles for American Roll-on Roll-off Carrier (ARC).
Global demand for transportation of high and heavy cargo remained soft. Cargo lifted in the second quarter came in at the same level as the first quarter. With auto volumes increasing more than high and heavy volumes, the group recorded an unfavourable cargo mix given the advanced fleet.
Volumes increased strongly in the Oceania trade, however from a low level in the first quarter impacted by the stink bug issue. The Atlantic trade recorded a positive development due to seasonality. However, Asia to North America and Asia to Europe experienced a decline.
The demand for construction equipment remained at a relatively healthy level, with a positive sentiment in the European market and improved housing markets in the US. Request for mining equipment continued to be modest due to low commodity prices and few new mining investments, while demand for agriculture machinery saw a declining trend in line with lower crop prices.
The total income for the logistics segment was USD 134 million, with operating profit of USD 18 million.
Improved results in Hyundai Glovis increased contribution from the logistics segment. WWL's activity level was on par with the first quarter, with slightly higher contribution from terminal operations and technical service following somewhat stronger volumes.
WWASA's shareholding in Hyundai Glovis was valued at USD 816 million on 30 June 2015.
Unrealised gains on interest derivatives and currency derivatives led to a net financial income of USD 4 million for the second quarter, up from a net financial expense of USD 46 million in the previous quarter. The improvement in the second quarter was partly offset by weaker results from investment management and unrealised net currency revaluation losses.
Net interest expenses totalled USD 23 million, on par with the first quarter.
At the end of the second quarter, the investment portfolio amounted to USD 248 million, including fixed income assets and stocks. The portfolio generated a negative return of USD 1 million, compared with a positive return of 8 million in the previous quarter.
Positively impacted by changes in medium to long-term USD interest rates, the WWASA group recorded an unrealised gain of USD 19 million on interest rate derivatives compared with an unrealised gain of USD 1 million in the first quarter.
During the quarter, the USD depreciated towards EUR and NOK. Net currency items for
Figure 3 Total income and EBIT (logistics segment)
the quarter amounted to a gain of USD 9 million. Gains, mainly unrealised, incurred on hedging contracts, while losses were related to revaluation on non-USD liabilities. Revaluation gains on non-USD assets, mainly financial assets, partly offset the losses.
The group recorded a tax expense of USD 7 million for the quarter, down from an income of USD 5 million, negatively impacted by a weaker USD/NOK.
Net profit after tax and minority interest amounted to USD 70 million, up USD 14 million quarter on quarter.
Earnings per share was USD 0.32 for the second quarter, up from USD 0.26 the first quarter.
Cash and cash equivalents including the investment portfolio were unchanged from the first quarter, totalling USD 408 million (USD 671 million when including the group's share of cash and cash equivalents in the joint ventures).
WWASA's equity increased from the previous quarter by USD 40 million to USD 1 806 million, representing an equity ratio of 51% based on book values for WWASA's own account.
After delivery of one new vessel, the group's gross interest bearing debt amounted to USD 1 393 million (USD 2 130 million when including share of interest-bearing debt in joint ventures) at the end of the quarter, equivalent to an increase of 4% quarter on quarter.
WWASA has two newbuildings on order. A sale lease back agreement has been established for the two vessels to commence service in the first half of 2016.
At the end of the second quarter, group companies had a lifting capacity of 900 000 CEUs, down 2% quarter on quarter. With a net decrease of three vessels compared with the first quarter, the group controlled 140 vessels by the end of the second quarter equal to a 23% share of the global car carrying capacity.
The global fleet totalled 756 vessels (4 million CEUs) at the end of June, a net increase of four vessels compared with the previous quarter.
Ensuring an optimal fleet given current and future transportation needs is key for WWASA.
With an advanced fleet, partly purposely built for high and heavy transportation, WWASA's operating entities have a potential to cater for increased demand for shipment of both high and heavy and break bulk cargoes.
In July, WWASA completed the refinancing of three UK tax lease vessels to straight bank financing.
The group also renegotiated a revolving credit facility of USD 50 million in July.
WWASA's annual general meeting resolved on 23 April 2015 to pay a dividend of NOK 1 per share, totaling NOK 220 million. The share was traded ex dividend on 24 April and the dividend was paid to shareholders on 7 May.
The board also received an authorisation from the annual general meeting to pay additional dividend limited up to NOK 1.25 per share. The authorisation is valid until the annual general meeting in 2016, although no longer than 30 June 2016.
| Group fleet capacity Q1 | 143 |
|---|---|
| Newbuildings | |
| Recyclings | -1 |
| Redeliveries | -2 |
| Out of service | $-1$ |
| Group fleet capacity Q2 | 140 |
Figure 5 Group fleet capacity vs group lifted volumes
The group took delivery of one newbuilding during the quarter. The pure car and truck carrier Thalatta commenced service for WWL.
In May, EUKOR ordered two new Post Panamax vessels for delivery in the first half of 2017. EUKOR holds an option to extend the order with two additional vessels.
At the end of the second quarter, the newbuilding programme for group companies counted eight vessels (63 300 CEUs) to be delivered in 2016-17. Two of the vessels are for WWASA's account. The group's newbuilding program equalled 14% of the world car carrier order book measured in CEUs.
Several new orders were placed in the quarter and the world orderbook counted 67 vessels (450 000 CEUs) or 11% of the total world fleet measured in CEUs.
The group redelivered two vessels to external owners during the quarter, and has the flexibility to redeliver six additional vessels the next 12 months.
Two vessels in the global fleet were sold for recycling in the second quarter, of which one was a WWASA group vessel. The pure-carand-truck carrier Liberty will be demolished at a green recycling facility in China.
| Company | Fleet by end of Q2 | Deliveries in O2 | Newbuilding programme by end of Q2 | Yard |
|---|---|---|---|---|
| WWL | 52 vessels, 357 000 | One pure car and truck carrier | Two pure car and truck carriers Post | Hyundai |
| CEUs, (58 vessels, | Post Panamax design (8 000 | Panamax design (16 000 CEUs) for WWASA's | l Samho | |
| 389 000 CEUs) | CEUs) for WWASA's account. | account. | ||
| Four pure car and truck carriers Post Panamax design (32 000 CEUs) not for WWASA's account. |
Xingang | |||
| EUKOR | 83 vessels, 513 000 | Two pure car and truck carriers Post | Hyundai | |
| CEUs (84 vessels. | Panamax design (15 300 CEUs). | Samho | ||
| 511 000 CEUs) | ||||
| ARC | Five vessels, 29 000 | |||
| CEUs (Five vessels, | ||||
| 29 000 CEUs) |
Figure 6 Group operated fleet and newbuilding programme
The 29 WWASA owned and controlled vessels consumed 58.2 thousand tonnes fuel and carried out 3.5 million tonne miles2 of transport work during the quarter. This equalled 16.6 gram fuel consumed per cargo tonne miles, down from 17.8 gram in the previous quarter supported by increased cargo volumes.
The fleet's emitted CO2 corresponded to 48.6 gram per cargo tonnes-miles, 3 down from 52.3 in the first quarter.
Planned and unplanned off-hire were at a higher level than the first quarter due to several dry dockings, retrofits and repairs.
There were no environmental incidents in the second quarter.
The fleet experienced 27 port state controls. No vessels were detained and the deficiency rate indicated that the fleet was managed according to the group's standards.
The retention rate on the WWASA controlled fleet is at a high and satisfying level.
The group's controlled vessels recorded a LTIF ratio of 0.62 for the second quarter, below the group's target.4
1 HSEQ reporting is based on vessels owned and controlled by WWASA.
4 Lost time injury frequency is measures as an injury, which results in an employee being unable to return to work for
a scheduled work shift on the day following the injury. Measured as injury per million working hours.
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.
WWL and EUKOR continue to be part of antitrust investigations of the car carrying industry in several jurisdictions, of which the EU and US are among the bigger jurisdiction. As some of
30 July, WWL reached a settlement agreement with the Competition Commission in South Africa.
The Commission stated that WWL and other car carriers have allegedly fixed prices, divided markets and tendered collusively in respect of the provision of deep-sea transportation services in the period from 1999 to September 2012.
the processes are confidential, WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are a part of. The company expects further clarification during 2015 and 2016.
The Competition Commission, being the investigating authority, referred the settlement to the Competition Tribunal of South Africa to be tried. If the settlement is confirmed, WWL will pay an administrative penalty in the amount of R95 695 529 (approx. USD 7.7 million).
WWL made an accrual for the penalty in fourth quarter 2014. WWASA's 50% share of the fine will therefore not have an accounting effect in 2015.
Light vehicle sales increased 1% quarter on quarter, ending on 17.4 million units. Except for Oceania, light vehicle sales are expected to grow slowly for the remainder of 2015.
The global investment growth in construction spending has flattened out, especially in the US, while Europe has shown a positive sentiment. The current global forecast indicates an average global construction spending growth of 3.6% in 2015.
Declining crop prices and reduced sales of especially larger equipment will continue to limit demand for transportation of agriculture units.
Demand for mining equipment is expected to be low following weak commodity price indices for precious metals and limited investments in new projects.
Changes in oil price will continue to affect the group's bunker cost and operating margin.
Based on the market outlook, the WWASA board expects seasonally lower auto volumes and continued soft high and heavy volumes in the second half of 2015.
Logistics activities are anticipated to be on par with the first half of 2015.
Lysaker, 5 August 2015 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
SECOND QUARTER AND FIRST HALF 2015
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Eliminations | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full | Full | Full | Full | Full | |||||||||||
| Q2 | Q2 | year | Q2 | Q2 | year | Q2 | Q2 | year | Q2 | Q2 | year | Q2 | Q2 | year | |
| QUARTER | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 |
| Operating revenue | 467 | 536 | 2 042 | 123 | 136 | 503 | 1 | 1 | 6 | (9) | (6) | (25) | 583 | 667 | 2 525 |
| Other income | |||||||||||||||
| Share of profit from | |||||||||||||||
| associates | 3 | 3 | 9 | 11 | 12 | 57 | 14 | 15 | 66 | ||||||
| Gain on sale of assets | |||||||||||||||
| Total income | 470 | 539 | 2 051 | 134 | 147 | 560 | 1 | 1 | 6 | (9) | (6) | (25) | 596 | 682 | 2 592 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (224) | (287) | (1 080) | 7 | 5 | 19 | (217) | (282) | (1 061) | ||||||
| Vessel expenses | (22) | (20) | (82) | (22) | (20) | (82) | |||||||||
| Charter expenses | (84) | (83) | (329) | (84) | (83) | (329) | |||||||||
| Employee benefits | (31) | (58) | (159) | (9) | (11) | (38) | (2) | (2) | (42) | (71) | (197) | ||||
| Other expenses | (13) | (18) | (77) | (106) | (113) | (431) | (1) | (2) | (7) | 1 | 1 | 6 | (119) | (131) | (510) |
| Depreciation and impairment | (38) | (36) | (147) | (2) | (2) | (12) | (40) | (38) | (160) | ||||||
| Total operating expenses | (412) | (502) | (1 875) | (116) | (125) | (482) | (4) | (4) | (7) | 9 | 6 | 25 | (523) | (625) | (2 339) |
| Operating profit (EBIT) 2 | 58 | 37 | 176 | 18 | 22 | 79 | (2) | (3) | (1) | 0 | 0 | (0) | 73 | 57 | 253 |
| Financial income/(expenses) | (10) | (16) | (75) | (1) | (1) | 15 | (15) | (55) | 4 | (31) | (131) | ||||
| Profit/(loss) before tax | 48 | 21 | 101 | 17 | 22 | 77 | 13 | (17) | (56) | 0 | 0 | (0) | 77 | 26 | 122 |
| Tax income/(expense) | (1) | 23 | (2) | (3) | (9) | (5) | 4 | 32 | (7) | 46 | |||||
| Profit/(loss) | 48 | 20 | 125 | 14 | 19 | 68 | 8 | (13) | (25) | 0 | 0 | (0) | 70 | 26 | 168 |
| Of which minority interest | (1) | (2) | (1) | (2) | |||||||||||
| Profit/(loss) after minority interest |
48 | 20 | 125 | 14 | 18 | 66 | 8 | (13) | (25) | 0 | 0 | (0) | 70 | 25 | 166 |
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.
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)
2014: Material gain/(loss) from disposal of assets and impairment charges
Logistics: Q3 - Impairment loss ASL USD 5.5 million.
Shipping: Q4 - Impairment loss vessel for recycling USD 3.5 million.
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 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 |
| Operating revenue | 925 | 1 033 | 2 042 | 244 | 271 | 503 | 3 | 3 | 6 | (16) | (14) | (25) | 1 156 | 1 292 | 2 525 |
| Other income | |||||||||||||||
| Share of profit from associates | 4 | 5 | 9 | 18 | 21 | 57 | 23 | 26 | 66 | ||||||
| Gain on sale of assets | 26 | 27 | |||||||||||||
| Total income | 930 | 1 038 | 2 051 | 289 | 292 | 560 | 3 | 3 | 6 | (16) | (14) | (25) | 1 205 | 1 318 | 2 592 |
| Operating expenses | |||||||||||||||
| Voyage expenses | (445) | (554) | (1 080) | 14 | 11 | 19 | (432) | (543) | (1 061) | ||||||
| Vessel expenses | (45) | (42) | (82) | (45) | (42) | (82) | |||||||||
| Charter expenses | (163) | (164) | (329) | (163) | (164) | (329) | |||||||||
| Employee benefits | (62) | (96) | (159) | (18) | (20) | (38) | (4) | (5) | (0) | (84) | (121) | (197) | |||
| Other expenses | (23) | (36) | (77) | (210) | (226) | (431) | (3) | (3) | (7) | 3 | 3 | 6 | (233) | (262) | (510) |
| Depreciation and impairment | (74) | (71) | (147) | (3) | (3) | (12) | (78) | (75) | (160) | ||||||
| Total operating expenses | (813) | (964) | (1 875) | (231) | (249) | (482) | (7) | (9) | (7) | 16 | 14 | 25 | (1 034) | (1 208) | (2 339) |
| Operating profit (EBIT) 2 | 117 | 74 | 176 | 58 | 43 | 79 | (4) | (6) | (1) | 0 | (0) | (0) | 171 | 111 | 253 |
| Financial income/(expenses) | (24) | (28) | (75) | (2) | (1) | (16) | (18) | (55) | (42) | (47) | (131) | ||||
| Profit/(loss) before tax | 93 | 46 | 101 | 55 | 42 | 77 | (20) | (24) | (56) | 0 | (0) | (0) | 129 | 64 | 122 |
| Tax income/(expense) | (2) | (6) | 23 | (4) | (6) | (9) | 4 | 6 | 32 | (2) | (6) | 46 | |||
| Profit/(loss) | 92 | 40 | 125 | 51 | 36 | 68 | (16) | (18) | (25) | 0 | (0) | (0) | 127 | 58 | 168 |
| Of which minority interest | (1) | (1) | (2) | (1) | (1) | (2) | |||||||||
| Profit/(loss) after minority | |||||||||||||||
| interest | 92 | 40 | 125 | 51 | 35 | 66 | (16) | (18) | (25) | 0 | (0) | (0) | 126 | 56 | 166 |
1/2 Comments - see previous page
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)
2014: Material gain/(loss) from disposal of assets and impairment charges
Logistics: Q3 - Impairment loss ASL USD 5.5 million.
Shipping: Q4 - Impairment loss vessel for recycling USD 3.5 million.
Shipping: Q4 - No material gain/(loss)
Joint ventures based on proportionate method
| USD mill | Shipping | Logistics | Holding | Total incl elimination | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |
| QUARTER | 2014 | 2014 | 2015 | 2015 | 2014 | 2014 | 2015 | 2015 | 2014 | 2014 | 2015 | 2015 | 2014 | 2014 | 2015 | 2015 |
| Operating revenue | 508 | 500 | 458 | 467 | 116 | 117 | 121 | 123 | 1 | 1 | 1 | 1 | 619 | 613 | 573 | 583 |
| Other income | ||||||||||||||||
| Share of profit from | ||||||||||||||||
| associates | 3 | 1 | 2 | 3 | 27 | 9 | 7 | 11 | 30 | 10 | 9 | 14 | ||||
| Gain on sale of assets | 26 | 26 | ||||||||||||||
| Total income | 512 | 502 | 460 | 470 | 143 | 126 | 155 | 134 | 1 | 1 | 1 | 1 | 650 | 624 | 609 | 596 |
| Operating expenses | ||||||||||||||||
| Voyage expenses | (268) | (258) | (221) | (224) | (264) | (255) | (215) | (217) | ||||||||
| Vessel expenses | (21) | (19) | (23) | (22) | (21) | (19) | (23) | (22) | ||||||||
| Charter expenses | (83) | (82) | (79) | (84) | (83) | (82) | (79) | (84) | ||||||||
| Employee benefits | (35) | (27) | (31) | (31) | (11) | (7) | (9) | (9) | (3) | 8 | (1) | (2) | (49) | (26) | (41) | (42) |
| Other expenses | (20) | (21) | (11) | (13) | (103) | (103) | (104) | (106) | (1) | (2) | (1) | (1) | (123) | (124) | (115) | (119) |
| Depreciation and impairment | (36) | (40) | (36) | (38) | (7) | (2) | (2) | (2) | (44) | (41) | (38) | (40) | ||||
| Total operating expenses | (464) | (447) | (401) | (412) | (121) | (111) | (115) | (116) | (4) | 6 | (3) | (4) | (584) | (547) | (511) | (523) |
| Operating profit (EBIT) 2 | 47 | 55 | 59 | 58 | 22 | 14 | 40 | 18 | (3) | 8 | (2) | (2) | 66 | 76 | 98 | 73 |
| Financial income/(expenses) | (5) | (41) | (14) | (10) | (1) | (1) | (1) | (4) | (34) | (31) | 15 | (9) | (75) | (46) | 4 | |
| Profit/(loss) before tax | 42 | 13 | 46 | 48 | 21 | 14 | 39 | 17 | (6) | (26) | (33) | 13 | 57 | 1 | 52 | 77 |
| Tax income/(expense) | (4) | 33 | (2) | (3) | (2) | (2) | 2 | 24 | 9 | (5) | (3) | 55 | 5 | (7) | ||
| Profit/(loss) | 38 | 47 | 44 | 48 | 21 | 11 | 37 | 14 | (5) | (2) | (24) | 8 | 55 | 56 | 57 | 70 |
| Of which minority interest | (1) | (1) | ||||||||||||||
| Profit/(loss) after minority | ||||||||||||||||
| interest | 38 | 47 | 44 | 48 | 21 | 11 | 37 | 14 | (5) | (2) | (24) | 8 | 54 | 55 | 56 | 70 |
1/2 Comments - see previous page
Joint ventures based on proportionate method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Financials | |||||
| Investment management 1 | (1.1) | 1.8 | 6.9 | 9.7 | 6.0 |
| Interest income | 0.8 | 0.9 | 1.9 | 2.2 | 3.6 |
| Other financial items | (0.4) | (5.1) | (1.7) | (9.4) | (10.1) |
| Net financial items | (0.8) | (2.4) | 7.1 | 2.5 | (0.5) |
| Net financials - interes rate | |||||
| Interest expenses | (14.8) | (16.8) | (28.9) | (32.3) | (62.7) |
| Interest rate derivatives - realised | (8.5) | (8.6) | (17.0) | (11.1) | (28.5) |
| Net interest expenses | (23.3) | (25.4) | (45.9) | (43.4) | (91.2) |
| Interest rate derivatives - unrealised | 18.5 | (6.4) | 19.9 | (12.0) | (16.8) |
| Net financial - currency | |||||
| Net currency gain/(loss) | (11.1) | 11.7 | (10.1) | 4.2 | 63.5 |
| Currency derivatives - realised | (5.4) | (1.2) | (0.5) | (3.3) | 9.8 |
| Currency derivatives - unrealised | 13.9 | (0.8) | (4.4) | 4.3 | (35.6) |
| Cross currency derivatives - realised | 7.8 | 8.7 | 3.6 | ||
| Cross currency derivatives - unrealised | 11.1 | (13.9) | (10.0) | (7.6) | (63.4) |
| Net currency items | 8.6 | 3.5 | (24.9) | 6.4 | (22.0) |
| Financial derivaties bunkers | |||||
| Valuation of bunker hedges | 0.9 | (0.1) | 1.7 | (0.3) | (0.3) |
| Net financial derivatives bunkers | 0.9 | (0.1) | 1.7 | (0.3) | (0.3) |
| Financial income/(expenses) | 3.9 | (30.8) | (42.2) | (46.8) | (130.9) |
1 Includes financial derivatives for trading
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Cash settled bunker and fuel hedges | (0.1) | 0.1 | (1.1) | 0.5 | 0.5 |
| Equity (USD mill) | |
|---|---|
| 2015 Q2 2015 Q1 2015 YTD 2014 YTD 2014 Q2 2014 FY | ||||||
|---|---|---|---|---|---|---|
| Total income | 119 | 136 | 255 | 216 | 111 | 437 |
| EBITDA | 86 | 104 | 190 | 129 | 65 | 291 |
| EBIT | 65 | 85 | 149 | 91 | 46 | 211 |
| Net profit/(loss) | 70 | 56 | 126 | 56 | 25 | 166 |
| Earnings per share (USD) | 0.32 | 0.26 | 0.57 | 0.26 | 0.11 | 0.75 |
The market for transportation of auto and high and heavy volumes continued to be competitive. The second quarter was characterised by a seasonal increase in ocean transportation volumes and improved underlying contributon from the logistics segment. This lead to an operating profit of USD 65 million based on a total income of 119 million, down from USD 85 million and USD 136 million respectively in the first quarter.
Adjusted for the USD 26 million gain from the share reduction in Hyundai Glovis in the first quarter 2015 and the loss from recycling one vessel in the second quarter, the operating profit and total income came in above the previous quarter.
Year to date the group has seen an improvement in underlying performance compared to the same period of last year following cost reductions and efficiency measures while the total income, adjusted for non-recurring items, has been relatively flat. Year to date, the group recorded an increase in top line from USD 216 million in 2014 to USD 255 million for the first half of 2015. The operating profit improved from USD 91 million to USD 149 million. Adjusted for the above mentioned non-recurring items and an
allocation to restructuring cost in WWL and reduction of Scandinavian seafarers the second quarter of 2014 (USD 22 million), the total income year to date ended at USD 229 million (YTD 2014 USD 230 million) and the operating profit at USD 123 million (YTD 2014 USD 113 million).
Group profit before tax amounted to USD 74 million, up from USD 49 million in the first quarter. Year to date, the group profit before tax totalled USD 123 million, up from USD 54 million for the same periode last year.
With a tax expense of USD 4 million for the second quarter, the net profit after tax ended at USD 70 million, up USD 14 million from the first quarter. For the first six months, the group recorded a tax income of USD 3 million leading to a net profit of USD 126 million (USD 56 million for the first half 2014).
Financial income for the quarter amounted to USD 9 million, substantially up from an expense of USD 36 million in the first quarter supported by unrealised gains on interest derivatives and currency derivatives.
Year to date, the financial expense totaled USD 26 million, down from an expense of USD 37 million in the first half of 2014.
Net interest expenses in the period totalled USD 17 million, on par with the first quarter. Year to date 2015 and 2014 net interest expenses amounted to approximately USD 34 million.
Net currency items for the quarter amounted to a gain of USD 10 million against a loss of USD 29 million in the previous quarter. For the first half 2015 and 2014 the similar figures were loss of USD 19 million and gain of USD 7 million.
The annual general meeting, held 23 April 2015, resolved to pay a dividend of NOK 1 per share, totaling NOK 220 million. The shares were traded ex dividend on Friday 24 April. Dividend payout was 7 May.
The board also received an authorisation from the annual general meeting to pay an additional dividend limited up to NOK 1.25 per share. The authorisation is valid until the annual general meeting in 2016, although not longer than 30 June 2016.
Risk evaluation is integrated in all business operations at group and operational level.
WWASA has well established internal control systems for handling commercial, financial and operational risks.
The group is, through its global operation within ocean transportation and logistics services to the car and ro-ro industry, exposed to certain market, operational and financial risks as described in the Annual report 2014. For a thorough explanation of the risk factors, please refer to pages 21-22 and note 13, page 55-61.
WWL and EUKOR continue to be part of antitrust investigations of the car carrying industry in several jurisdictions, of which the EU and US are among the bigger jurisdiction. As some of the processes are confidential, WWASA is not in a position to comment on the ongoing investigations which WWL and EUKOR are a part of. The company expects further clarification during 2015 and 2016.
EUKORs contract with Hyundai and Kia expires 31 December 2015. EUKOR aims to uphold its 60% share of Hyundai and Kia exports out of Korea.
The group has a particular eye on the development in the Chinese economy, as several parts of the business is directly or indirectly affected by the Chinese economy and how it affects the world economy in general.
In addition, the group is exposed to a variety of non-financial issues including political unrest in parts of the world, environmental disasters and changing legislations and/or regulatory requirements that potentially could have an impact on the group's activities and financial performance. Unethical business behavior could also impact the group's reputation and have an indirect impact on the company's profitability.
Light vehicle sales increased 1% quarter on quarter, ending on 17.4 million units. Except for Oceania, light vehicle sales are expected to grow slowly for the remainder of 2015.
The global investments growth in construction spending has flattened out, especially in the US, while Europe has shown a positive sentiment. The current global forecast indicates an average global construction spending growth of 3.6% in 2015.
Declining crop prices and reduced sales of especially larger equipment will continue to limit demand for transportation of agriculture units.
Demand for mining equipment is expected to be low following weak commodity price indices for precious metals and limited investments in new projects.
Changes in oil price will continue to affect the group's bunker cost and operating margin.
Based on the market outlook, the WWASA board expects seasonally lower auto volumes and continued weak high and heavy volumes in the second half of 2015.
Logistics activities are anticipated to be on par with first half of 2015.
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 | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | ||
| Operating revenue | 79 | 68 | 155 | 139 | 285 | |
| Other income | ||||||
| Share of profit from joint ventures and associates | 40 | 43 | 73 | 77 | 152 | |
| Gain on sale of assets | 2 | 27 | ||||
| Total income | 119 | 111 | 255 | 216 | 437 | |
| Operating expenses | ||||||
| Vessel expenses | (11) | (11) | (23) | (25) | (47) | |
| Charter expenses | (5) | (5) | (11) | (11) | (23) | |
| Employee benefits | (14) | (26) | (26) | (44) | (63) | |
| Other expenses | (3) | (3) | (5) | (6) | (13) | |
| Depreciation and impairment | 4 | (21) | (19) | (40) | (38) | (80) |
| Total operating expenses | (54) | (65) | (105) | (125) | (225) | |
| Operating profit (EBIT) | 65 | 46 | 149 | 91 | 211 | |
| Financial income/(expenses) | 5 | 9 | (25) | (26) | (37) | (108) |
| Profit/(loss) before tax | 74 | 21 | 123 | 54 | 104 | |
| Tax income/(expense) | (4) | 4 | 3 | 2 | 62 | |
| Profit for the period attributable to the owners of the parent | 70 | 25 | 126 | 56 | 166 | |
| Basic and diluted earnings per share (USD)* | 0.32 | 0.11 | 0.57 | 0.26 | 0.75 |
* EPS is calculated based on 220 000 000 shares.
| USD mill | Notes 01.04-30.06 2015 |
01.04-30.06 2014 |
YTD 2015 |
YTD 2014 |
Full year 2014 |
|---|---|---|---|---|---|
| Profit/(loss) for the period | 70 | 25 | 126 | 56 | 166 |
| Other comprehensive income | |||||
| Items that will be reclassified to income statement | |||||
| Reclassification of revaluation of previously held interest in Norwegian Car Carriers ASA | 0 | 5 | 5 | ||
| Cash flow hedges in joint venture, net of tax | 0 | 3 | (3) | ||
| Currency translation differences in joint venture | 1 | 0 | (3) | 0 | (5) |
| Items that will not be reclassified to income statement | |||||
| Remeasurement postemployment benefits, net of tax | (19) | ||||
| Other comprehensive income, net of tax | 1 | 0 | 0 | 6 | (22) |
| Total comprehensive income attributable to owners of the parent | 71 | 26 | 126 | 62 | 144 |
The above consolidated income statement and comprehensive income should be read in conjunction with the accompanying notes.
| USD mill | Notes | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|---|
| Non current assets | ||||
| Deferred tax assets | 28 | 25 | ||
| Goodwill and other intangible assets | 4 | 6 | 6 | 6 |
| Investments in vessels and other tangible assets | 4 | 1 853 | 1 794 | 1 760 |
| Investments in joint ventures and associates | 1 191 | 1 166 | 1 164 | |
| Other non current assets | 1 | 1 | ||
| Total non current assets | 3 080 | 2 967 | 2 955 | |
| Current assets | ||||
| Current financial investments | 248 | 261 | 235 | |
| Other current assets | 31 | 34 | 23 | |
| Cash and cash equivalents | 160 | 189 | 140 | |
| Total current assets | 439 | 484 | 398 | |
| Total assets | 3 519 | 3 451 | 3 353 | |
| Equity | ||||
| Share capital | 7 | 30 | 30 | 30 |
| Retained earnings and other reserves | 1 776 | 1 628 | 1 677 | |
| Total equity attributable to owners of the parent | 1 806 | 1 658 | 1 707 | |
| Non current liabilities | ||||
| Pension liabilities | 53 | 59 | 56 | |
| Deferred tax liabilities | 46 | |||
| Non current interest-bearing debt | 9 | 1 277 | 1 308 | 1 236 |
| Other non current liabilities | 196 | 121 | 208 | |
| Total non current liabilites | 1 526 | 1 534 | 1 500 | |
| Current liabilities | ||||
| Public duties payable | 1 | 1 | 1 | |
| Other current liabilities | 186 | 258 | 145 | |
| Total current liabilities | 187 | 259 | 145 | |
| Total equity and liabilities | 3 519 | 3 451 | 3 353 |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Joint ventures based on equity method
| USD mill | Note | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | ||
| Cash flow from operating activities | ||||||
| Profit before tax | 74 | 21 | 123 | 54 | 104 | |
| Financial (income)/expenses, excluding unrealised financial derivates | 34 | 4 | 33 | 22 | (8) | |
| Financial derivatives unrealised | (44) | 20 | (7) | 14 | 115 | |
| Depreciation/impairment | 5 | 21 | 19 | 40 | 38 | 80 |
| (Gain)/loss on sale of tangible assets | 1 | |||||
| Net (gain)/loss from sale of associate | (26) | |||||
| Change in net pension assets/liabilities | 1 | (1) | (4) | (2) | (24) | |
| Other change in working capital | (4) | 20 | (3) | 29 | 7 | |
| Share of profit from joint ventures and associates | (40) | (43) | (73) | (77) | (152) | |
| Dividend received from joint ventures and associates | 33 | 31 | 33 | 31 | 95 | |
| Tax paid (company income tax, witholding tax) | (3) | (1) | (3) | (3) | (3) | |
| Net cash flow provided by/(used in) operating activities | 73 | 69 | 113 | 108 | 216 | |
| Cash flow from investing activities | ||||||
| Proceeds from sale of tangible assets | 7 | 8 | 15 | |||
| Investments in vessels, other tangible and intangible assets | 5 | (73) | (13) | (141) | (21) | (35) |
| Net proceeds from sale of associate | 39 | |||||
| Proceeds from sale of investment-held-for-sale | 6 | 6 | ||||
| Proceeds from sale of financial investments | 23 | 8 | 48 | 41 | 57 | |
| Investments in financial investments | (36) | (2) | (72) | (43) | (64) | |
| Dividend received (financial investments) | 2 | 2 | 2 | 2 | 2 | |
| Interest received | 1 | 1 | 2 | |||
| Changes in other investments | 1 | 1 | ||||
| Net cash flow provided by/(used in) investing activities | (83) | (5) | (116) | (5) | (16) | |
| Cash flow from financing activities | ||||||
| Proceeds from issue of debt | 64 | 135 | 128 | 135 | 312 | |
| Repayment of debt | (26) | (128) | (46) | (145) | (400) | |
| Interest paid including interest derivatives | (10) | (13) | (31) | (28) | (70) | |
| Realised financial derivatives | (5) | 7 | 5 | 12 | ||
| Dividend to shareholders | (28) | (37) | (28) | (37) | (69) | |
| Net cash flow provided by/(used in) financing activities | (5) | (36) | 23 | (70) | (216) | |
| Net increase in cash and cash equivalents | (16) | 28 | 20 | 32 | (17) | |
| Cash and cash equivalents, excluding restricted cash, at beginning of period | 176 | 162 | 140 | 157 | 157 | |
| Currency on cash and cash equivalents* | ||||||
| Cash and cash equivalents at end of period | 160 | 189 | 160 | 189 | 140 |
* 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
| Statement of changes in equity - Year to date | |||
|---|---|---|---|
| Balance at 31.12.2014 30 (24) 1 700 Profit for the year 126 Other comprehensive income 0 Total comprehensive income 0 0 126 |
1 707 126 |
|---|---|
| 0 | |
| 126 | |
| Paid dividends to shareholders (28) |
(28) |
| Balance 30.06.2015 30 (24) 1 799 |
1 806 |
| Balance at 31.12.2013 30 (3) 1 603 |
1 632 |
| Profit for the year 56 |
56 |
| Other comprehensive income 6 |
6 |
| Total comprehensive income 0 6 56 |
62 |
| Paid dividends to shareholders (37) |
(37) |
| Balance 30.06.2014 30 3 1 623 |
1 658 |
| Statement of changes in equity - Full year 2014 USD mill Share capital Other reserves Retained earnings |
Total equity |
| Balance at 31.12.2013 30 (3) 1 602 |
1 632 |
| Profit for the year 166 Other comprehensive income (22) |
166 (22) |
| Total comprehensive income 0 (22) 166 |
144 |
| Paid dividends to shareholders (69) |
(69) |
| Balance 31.12.2014 30 (24) 1 700 |
1 707 |
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 2014 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 2014.
There are no new standards or amendments to standards released during 2015.
As a result of rounding adjustments, the figures in one or more columns may not add up to the total of that column.
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. There has not been any other
Up to 31 December 2014 WWASA had two pension schemes for employees in Norway; a defined benefit scheme closed for new members and a defined contribution scheme. Due to changes in the national pension scheme and changes in the pension market in general, the Board of WWASA decided to
| USD mill | 2014 | |||
|---|---|---|---|---|
| Employee benefits (excluding pension cost) | (21) | |||
| Pension cost | (3) | |||
| Gain related to termination of defined benefit plan for Norwegian employees | 11 | |||
| Employee benefits (income statement) | (14) | |||
| Pension cost | (3) | |||
| Gain related to termination of defined benefit plan for Norwegian employees | 11 | |||
| Other comprehensive income pension, before tax | (20) | |||
| Net equity effect of pension cost, before tax (parent and subsidaries) | (12) | |||
| Shipping | Holding | Total | 2014 | |
| Effect on operating profit 2014 | Q4 | Q4 | Q4 | YTD |
| Operating profit | 53 | (2) | 65 | 149 |
| Gain related to termination of defined benefit plan for Norwegian | ||||
| employees (included in employee benefit) | (1) | (10) | (11) | (11) |
| Gain related to termination of defined benefit plan for Norwegian | ||||
| employee (Share of profit from joint ventures and associates) | (6) | (6) | (6) | |
| Total gain from termination of defined benefit plan for Norwegian employees | (7) | (10) | (17) | (17) |
Operating profit excluding gain from termination of defined benefit
plan for Norwegian employees 46 (12) 48 133
significant acquisitions or disposals during the first half of 2015. There has not been any significant acquisitions or disposals during 2014.
follow the recommendations from the pension committee to terminate the defined benefit pension scheme 31 December 2014. Effective 1 January 2015 all employees entered into a defined contribution pension scheme with improved saving rates.
Joint ventures based on equity method
| Vessels & | ||||
|---|---|---|---|---|
| Other tangible | Newbuilding | Total tangible | Intangible | |
| USD mill | assets | contracts | assets | assets |
| 2015 - Year to date | ||||
| Cost price at 01.01 | 2 | 2 400 | 2 401 | 7 |
| Additions | 141 | 141 | ||
| Disposal | (79) | (79) | ||
| Cost price at 30.06 | 1 | 2 462 | 2 463 | 7 |
| Accumulated depreciation and impairment losses at 01.01 | (1) | (640) | (642) | (1) |
| Depreciation | (40) | (40) | ||
| Disposal | 72 | 72 | ||
| Accumulated depreciation and impairment losses at 30.06 | (1) | (608) | (611) | (1) |
| Carrying amounts at 30.06 | 0 | 1 853 | 1 853 | 6 |
| 2014 - Year to date | ||||
| Cost price 01.01 | 2 | 2 467 | 2 469 | 8 |
| Additions | 21 | 21 | ||
| Disposal | (55) | (55) | (1) | |
| Cost price 30.06 | 2 | 2 433 | 2 435 | 7 |
| Accumulated depreciation and impairment losses 01.01 | (1) | (647) | (649) | (2) |
| Depreciation | (38) | (38) | ||
| Disposal | 46 | 46 | 1 | |
| Accumulated depreciation and impairment losses 30.06 | (1) | (639) | (641) | (1) |
| Carrying amounts 30.06 | 1 | 1 794 | 1 794 | 6 |
| 2014 - Full year 2014 | ||||
| Cost price at 01.01 | 2 | 2 467 | 2 469 | 7 |
| Additions | 35 | 35 | ||
| Disposal | (1) | (103) | (103) | |
| Cost price at 31.12 | 2 | 2 400 | 2 401 | 7 |
| Accumulated depreciation and impairment losses at 01.01 Depreciation |
(1) | (647) (76) |
(649) (76) |
(1) |
| Disposal | 86 | 86 | ||
| Impairment Accumulated depreciation and impairment losses at 31.12 |
(1) | (4) (640) |
(4) (642) |
(1) |
| Carrying amounts at 31.12 | 0 | 1 759 | 1 760 | 6 |
Joint ventures based on equity method
| USD mill | 01.04-30.06 | 01.04-30.06 | YTD | YTD | Full year |
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Financials | |||||
| Investment management 1 | (1.4) | 1.6 | 6.7 | 9.5 | 5.7 |
| Interest incomes | 0.2 | 0.5 | 0.8 | 1.4 | 2.0 |
| Other financial items | (0.4) | (4.8) | (1.8) | (9.3) | (10.2) |
| Net financial items | (1.6) | (2.8) | 5.7 | 1.6 | (2.5) |
| Net financials - interes rate | |||||
| Interest expenses | (9.5) | (12.6) | (18.6) | (24.0) | (45.4) |
| Interest rate derivatives - realised | (7.9) | (7.9) | (15.8) | (9.8) | (26.0) |
| Net interest expenses | (17.4) | (20.5) | (34.3) | (33.8) | (71.4) |
| Interest rate derivatives - unrealised | 17.7 | (5.5) | 20.0 | (11.2) | (16.4) |
| Net financial - currency | |||||
| Net currency gain/(loss) | (9.9) | 11.8 | (4.3) | 4.3 | 70.0 |
| Currency derivatives - realised | (5.4) | (1.2) | (0.5) | (3.3) | 8.0 |
| Currency derivatives - unrealised | 13.9 | (0.8) | (4.4) | 4.4 | (35.6) |
| Cross currency derivatives - realised | 7.8 | 8.7 | 3.6 | ||
| Cross currency derivatives - unrealised | 11.1 | (13.9) | (10.0) | (7.6) | (63.4) |
| Net financial - currency | 9.7 | 3.6 | (19.2) | 6.6 | (17.4) |
| Financial derivatives bunkers | |||||
| Valuation of bunker hedges | 0.9 | 1.7 | |||
| Net financial derivatives bunkers | 0.9 | 0.0 | 1.7 | 0.0 | 0.0 |
| Financial income/(expenses) | 9.4 | (25.2) | (26.2) | (36.8) | (107.6) |
1 Includes financial derivatives for trading
WWASA's subsidiary Wilhelmsen Lines Shipowning (WLS) commenced legal proceedings before the Oslo City Court based on the tax appeal board's decision to turn down the application for tonnage tax. The basis for the proceedings was that the transition rule valid for companies that exited the old tonnage tax regime (abolished in 2007) into ordinary taxation was in breach with The Constitution of Norway, article 97. Alternatively, WLS can claim a compensation for the economic loss caused by the unconstitutional transition rule. Until the company is faced with
the final outcome of the litigation process, the issue will have no impact on the income statement or balance sheet for the group.
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:
Number of shares NOK mill USD mill Share capital 220 000 000 220 30
Joint ventures based on equity method
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.
Dividend for fiscal year 2013 was NOK 1.00 per share paid in May 2014 (effect on retained earnings in the second quarter of 2014) and NOK 1.00 per share paid in November 2014 (effect on retained earnings in the fourth quarter of 2014).
| USD mill | 30.06.2015 | 30.06.2014 | 31.12.2014 |
|---|---|---|---|
| Non current interest-bearing debt | 1 277 | 1 308 | 1 236 |
| Current interest-bearing debt | 115 | 181 | 90 |
| Total interest-bearing debt | 1 393 | 1 489 | 1 325 |
| Cash and cash equivalents | 160 | 189 | 140 |
| Current financial investments | 248 | 261 | 235 |
| Net interest bearing debt | 984 | 1 039 | 951 |
| Net interest bearing debt in Joint Ventures (group's share) | 30.06.2015 | 30.06.2014 | 31.12.2014 |
| Non current interest-bearing debt | 659 | 587 | 620 |
| Current interest-bearing debt | 79 | 86 | 85 |
| Total interest-bearing debt | 737 | 673 | 705 |
| Cash and cash equivalents | 263 | 245 | 223 |
| Current financial investments | |||
| Net interest bearing debt | 475 | 428 | 482 |
| Specification of interest-bearing debt | 30.06.2015 | 30.06.2014 | 31.12.2014 |
| Interest-bearing debt | |||
| Mortgages | 1 007 | 926 | 924 |
| Leasing commitments | 82 | 91 | 82 |
| Bonds | 304 | 472 | 319 |
| Total interest-bearing debt | 1 393 | 1 489 | 1 325 |
| Repayment schedule for interest-bearing debt | |||
| Due in year 1 | 52 | 136 | 90 |
| Due in year 2 | 189 | 98 | 185 |
| Due in year 3 | 101 | 303 | 91 |
| Due in year 4 | 286 | 80 | 280 |
| Due in year 5 and later | 764 | 873 | 680 |
| Total interest-bearing debt | 1 393 | 1 489 | 1 325 |
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 | 10 | 10 | ||
| Equities | 78 | 78 | ||
| Bonds | 170 | 170 | ||
| Total financial assets 30.06.2015 | 248 | 10 | 0 | 258 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 271 | 271 | ||
| Total financial liabilities 30.06.2015 | 0 | 271 | 0 | 271 |
| Financial assets at fair value | ||||
| Financial derivatives | 8 | 8 | ||
| Equities | 75 | 75 | ||
| Bonds | 142 | 17 | 159 | |
| Total financial assets 31.12.2014 | 217 | 25 | 0 | 242 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 222 | 222 | ||
| Total financial liabilities 31.12.2014 | 0 | 222 | 0 | 222 |
| 2015 | 2014 | |||
| 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 | |||||||||||
| Q2 | Q2 | year | Q2 | Q2 | year | Q2 | Q2 | year | Q2 | Q2 | year | Q2 | Q2 | year | |
| QUARTER | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 |
| Total income | 79 | 68 | 285 | 1 | 1 | 6 | (1) | (1) | (5) | 79 | 68 | 285 | |||
| Share of profit from joint ventures | |||||||||||||||
| and associates 1 | |||||||||||||||
| 26 | 25 | 86 | 14 | 18 | 66 | 40 | 43 | 152 | |||||||
| Gain on sale of assets | |||||||||||||||
| Total income | 105 | 92 | 371 | 14 | 18 | 66 | 1 | 1 | 6 | (1) | (1) | (5) | 119 | 111 | 437 |
| Primary operating profit | 74 | 50 | 226 | 14 | 18 | 66 | (2) | (3) | (1) | 86 | 65 | 291 | |||
| Depreciation and impairment | (21) | (19) | (79) | (21) | (19) | (80) | |||||||||
| Operating profit (EBIT) | 53 | 30 | 147 | 14 | 18 | 66 | (2) | (3) | (1) | (0) | 0 | 0 | 65 | 46 | 211 |
| Financial income/(expense) | (6) | (10) | (53) | 15 | (15) | (55) | 9 | (25) | (108) | ||||||
| Profit/(loss) before tax | 47 | 20 | 94 | 14 | 18 | 66 | 13 | (17) | (56) | (0) | 0 | 0 | 74 | 21 | 104 |
| Tax income/(expenses) | 1 | 30 | (5) | 4 | 32 | (4) | 4 | 62 | |||||||
| Profit/(loss) for the period | |||||||||||||||
| attributable to the owners of | |||||||||||||||
| the parent | 48 | 20 | 125 | 14 | 18 | 66 | 8 | (13) | (25) | (0) | 0 | 0 | 70 | 25 | 166 |
| 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 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 | 2015 | 2014 | 2014 |
| Total income | 155 | 139 | 285 | 3 | 3 | 6 | (2) | (3) | (5) | 155 | 139 | 285 | |||
| Share of profit from joint ventures | |||||||||||||||
| and associates 1 | 49 | 42 | 86 | 24 | 35 | 66 | 73 | 77 | 152 | ||||||
| Gain on disposal of assets | 26 | 27 | |||||||||||||
| Total income | 204 | 182 | 371 | 51 | 35 | 66 | 3 | 3 | 6 | (2) | (3) | (5) | 255 | 216 | 437 |
| Primary operating profit | 143 | 101 | 226 | 51 | 35 | 66 | (4) | (6) | (1) | 190 | 129 | 291 | |||
| Depreciation and impairment | (40) | (38) | (79) | (40) | (38) | (80) | |||||||||
| Operating profit | 103 | 62 | 147 | 51 | 35 | 66 | (4) | (6) | (1) | (0) | 0 | 0 | 149 | 91 | 211 |
| Financial income/(expenses) | (53) | (16) | (18) | (55) | (26) | (37) | (108) | ||||||||
| (10) | (19) | ||||||||||||||
| Profit/(loss) before tax | 93 | 44 | 94 | 51 | 35 | 66 | (20) | (24) | (56) | (0) | 0 | 0 | 123 | 54 | 104 |
| Tax income/(expense) | (1) | (4) | 30 | 4 | 6 | 32 | 3 | 2 | 62 | ||||||
| Profit/(loss) for the period | |||||||||||||||
| attributable to the owners of the parent |
92 | 40 | 125 | 51 | 35 | 66 | (16) | (18) | (25) | (0) | 0 | 0 | 126 | 56 | 166 |
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
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.
WWL and EUKOR continue to be part of anti-trust investigations of the car carrying industry in several jurisdictions, of which the EU and US are among the bigger jurisdiction. As some of the processes are confidential, WWASA is not in
30 July, WWL reached a settlement agreement with the Competition Commission in South Africa.
The Commission stated that WWL and other car carriers have allegedly fixed prices, divided markets and tendered collusively in respect of the provision of deep-sea transportation services in the period from 1999 to September 2012.
The Competition Commission, being the investigating authority, referred the settlement to the Competition Tribunal of South Africa to be tried. If the settlement is confirmed, WWL will pay an administrative penalty in the amount of R95 695 529 (approx. USD 7.7 million).
WWL made an accrual for the penalty in fourth quarter 2014. WWASA's 50% share of the fine will therefore not have an accounting effect in 2015.
a position to comment on the ongoing investigations which WWL and EUKOR are a part of. The company expects further clarification during 2015 and 2016.
Three vessels previously financed through a UK tax lease were in July 2015 refinanced with ordinary bank debt.
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.
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2015 have been prepared in accordance with IAS 34 – Interim Financial Reporting, and give a true and fair view of the group's assets, liabilities, financial position and profit as a whole.
We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.
Lysaker, 5 August 2015 The board of directors of Wilh. Wilhelmsen ASA
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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