Wallenius Wilhelmsen: market update
Oslo, 6 March 2020 - The spread of the coronavirus is impacting finished vehicle supply chains, adding to already expected volume reductions. Based on these developments Wallenius Wilhelmsen estimates a 20% reduction in ocean volumes for Q1 2020 compared to Q1 2019. As the coronavirus situation evolves rapidly, we are following events closely and taking a pro-active and preventative approach towards safeguarding the health, safety and security of our employees, crew and members of the public. Our operations in affected countries are following governmental advice to minimize risk of exposure as well as operational impact.
Since the outbreak of COVID-19 in China, Wallenius Wilhelmsen has been closely monitoring the development of volumes across our trades. Over the past weeks, plant closures in Asia has caused parts shortages, disrupting the inbound supply chain to vehicle production leading to lower output and less volumes shipped. This has added to an expected volume reduction due to selective contracting and already softening sales of vehicles and high & heavy, which is estimated to result in a 20% reduction in ocean volumes for Q1 2020 compared to Q1 2019.
"This is a global issue that strains supply chains and requires a proactive response from us all. We are in close connection with our customers to support them in any changes they need to make, whilst at the same time optimizing operations and leveraging our flexibility to manage costs," says Craig Jasienski, President & CEO of Wallenius Wilhelmsen.
The company expects an impact into Q2, but the extent will depend on the rate of recovery in Asia, the spread of the coronavirus, the corresponding reaction of global markets and the impact on vehicle sales.
Wallenius Wilhelmsen has a solid operational platform, an efficient cost base, solid balance sheet and cash position, and is well prepared to handle a challenging market. Furthermore, continuous focus on efficiency in operations and the flexibility to adjust the fleet will continue to support profitability going forward.
About Wallenius Wilhelmsen The Wallenius Wilhelmsen group (OEX: WALWIL) is a market leader in RoRo shipping and vehicle logistics, transporting cars, trucks, rolling equipment and breakbulk around the world. The company operates around 125 vessels servicing 15 trade routes to six continents, and a global inland distribution network, 120 processing centres, and 11 marine terminals. The Wallenius Wilhelmsen group consist of Wallenius Wilhelmsen Ocean, Wallenius Wilhelmsen Solutions, EUKOR and ARC. The group is headquartered in Oslo, Norway with 9 500 employees in 29 countries worldwide. Read more at walleniuswilhelmsen.com
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