Wilh. Wilhelmsen Profit Grows 5 Percent

Operating profit for Wilh. Wilhelmsen increased 5 percent to $78.3 million in the second quarter, compared with the comparable period a year ago. The growth came in the face of a significant drop in cargo volume and a 29 percent drop in revenue to $633.1 million.

“Yet another quarter characterized by a continued weak global economy and a substantial drop in cargo volumes compared with last year is impacting our operating income and bottom line,” said Ingar Skaug, group CEO. “The drop in cargo volumes is particularly evident for Wallenius Wilhelmsen Logistics. Our other shipping companies deliver satisfying results.”

“Despite lower activity level and reduced total income in the maritime services segment, operating profit is on par with last year in Wilhelmsen Maritime Services following capacity cost adjustments and stringent cost control,” said Skaug.

On the prospects for the group, Skaug says: “The slide in ocean transportation of cars and ro-ro cargo so far this year has been greater than the sales volume drop, bringing the global inventory levels down. Consequently, there is reason to expect the production decline to approach the trough and increased probability for higher production levels later this year. This will in turn lead to increased demand for transportation and related services which should result in higher utilisation of our vessels.”

WW said it expects the global economic uncertainty and weakness to persist, affecting markets and the group. The car and roll-on, roll-off markets show signs of bottoming out, the company said as global inventory levels are depleted, increasing chances of higher production levels later in the year.

The WW board said it expects a moderate improvement in the group’s operating profit in the second half of 2009 compared with the first half, however significantly lower than the same period in 2008.

Contact Thomas L. Gallagher at tgallagher@joc.com.