Wilh. Wilhelmsen suffers loss on Eukor venture

Wilh. Wilhelmsen suffers loss on Eukor venture    Norway’s Wilh. Wilhelmsen ASA group said that its 40-percent-owned Korean joint venture Eukor Car Carriers expects to post a loss of about $20 million this year, as the car-carrier company was hit by lengthy strikes in July and August at car manufacturers Hyundai Motor Co. and Kia Motors Corp.
   Wilhelmsen reported that the strikes had “a very negative effect on third-quarter results for Eukor,” which comprises the former car-carrier business of Hyundai Merchant Marine. Their adverse impact on the company is estimated at $20 million.
   Despite larger volumes than expected, Eukor expects to report a loss of about $20 million for the year as a whole, of which Wilhelmsen will have a 40-percent share. For the third quarter of the year, Wilhelmsen recorded an 11 million Norwegian kroner ($2 million) loss from Eukor.
   Eukor is now experiencing pressure on tonnage to eliminate the big export backlog in the wake of the strike.
   Reporting its third-quarter results, Wilhelmsen said that the liner and car carrier activities of Wallenius Wilhelmsen Lines “achieved another positive quarter.”
   However, Wilhelmsen’s liner and car-carrier business, which includes the group’s interest in Wallenius Wilhelmsen Lines and Eukor, saw its net profit fall to $9.7 million in the third quarter, from $14.9 million in the same quarter of 2002. The decline in profit was due to a loss from associated companies of $11 million in the latest quarter, as compared to a breakeven on associated companies in the year-earlier period. Revenue from liner and car-carrier activities increased to $214.7 million in the third quarter, from $200 million this time last year.
   Wallenius Wilhelmsen Lines experienced high cargo volumes from Asia and in the Europe/North America-Oceania trade, its parent company said. Changes to the sailing pattern in the Atlantic also had a positive effect.
   “Results from inland operations and the logistics business were positive, with activities in the USA yielding particularly good results,” Wilhelmsen said. American Roll-On Roll-Off, owned 50-50 by Wallenius and Wilhelmsen, opened a U.S-flag service between the U.S. and the Mediterranean in October, with two ships providing monthly sailings.
   Barber International, the Norwegian group’s ship management arm, and Barwil, its ship agency business, delivered stable profits in the third quarter.
   Barwil has now completed the changes to a regional structure, and operations now fall under four regions: Europe, the Middle East/Black Sea/Africa, the Americas and Asia/Oceania. Barber will relocate its top management from Kuala Lumpur, Malaysia, to Oslo, Norway during the first half of 2004, but will transfer parts of its accounting and purchasing functions to Kuala Lumpur and Mumbai, India.
   Wilhelmsen earned a group net profit of $12.3 million in the latest quarter, as compared to a net income of $10.8 million in the corresponding period of 2002.
   Commenting on its future trading prospects, Wilhelmsen said that its liner and car carrier business continues to enjoy very strong markets with “good supply of cargo in virtually all trades.” Prospects are “encouraging” both for Wallenius Wilhelmsen Lines and Eukor, and for parts of the inland and logistic businesses, although persistently high bunkers prices have a negative effect, the parent group said.