Wilh. Wilhelmsen sees “start of a soft recovery”

Wilh. Wilhelmsen sees “start of a soft recovery”

Wilh. Wilhelmsen sees “start of a soft recovery”

   Norway’s Wilh. Wilhelmsen group said it had third quarter net profit of $30.1 million compared to $37.6 million the prior year.
   The company, a part owner of Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Roll-on Roll-off Carrier, said the “third quarter volumes indicate the start of a soft recovery.”
   Wilh. Wilhelmsen said revenue for the quarter ending Sept. 30 was $604.9 million, compared to $866.6 million in the same 2008 period.
   The company uses the proportional method of accounting for its most important joint ventures, it said, because “this method provides a better reflection of the WW group's underlying operations in the joint ventures than the official accounts.”
   “The current market puts severe pressure on earnings for the shipping segment. However, the third quarter shows signs of market recovery, albeit at a slow pace,” said Thomas Wilhelmsen, deputy group chief executive officer. From the second to third quarters, the company reported a 7 percent increase in cargo volumes as measured in cubic meters.
   “The market affects our shipping companies very differently. Compared with last year, Wallenius Wilhelmsen Logistics has experienced a substantial drop in volumes and change in cargo composition and trades. EUKOR Car Carriers and American Roll-on Roll-off Carrier deliver satisfying results and have not experienced a similar drop in volumes. We predict that the current low inventory levels and effects of governmental stimulus programs will impact cargo volumes going forward, but the effect is at present uncertain,” Wilhelmsen said.
   The company said its “logistics and maritime services segments are to a lesser degree affected by the present market conditions. Sales are down, but results are keeping up compared with the same quarter last year.
   “Demand for ocean transportation of cars picked up during the third quarter compared with the slump earlier this year. Government incentive programs in the U.S. and in western Europe kicked in during the quarter. The low inventory levels were also instrumental in driving up car cargo volumes,” the company said.
   “On the other hand, demand for ro/ro cargo, herein mainly construction and mining machinery, remained at a low level in the third quarter, still suffering from slow construction and mining activity. Assuming a gradual improvement in the world economy, and considering the remaining share of government incentive programs for car purchases in Europe, it is reasonable to expect car cargo volumes to continue improving going forward, albeit at a moderate pace.
   “The outlook for ro/ro volumes is more uncertain in the short term. Demand is highly dependent on government stimulus packages aimed at construction activity. These are expected to come into effect from 2010. Together with improved housing markets, primarily in the U.S., demand for heavy construction machinery should pick up from next year,” the company added.