WWASA - results for the third quarter 2013
WWASA's operating profit for the third quarter was in line with the previous quarter. Weaker contribution from the shipping segment caused by lower volumes and a negative cargo mix was almost outweighed by stronger contribution from the logistics segment.
WWASA delivered an operating profit for the third quarter totalling USD 78 million (USD 246 million) based on a total income of USD 627 million (USD 846 million). The operating profit was negatively impacted by non-recurring items of USD 3 million related to internal restructuring, while igures for the third quarter 2012 were positively affected by a net sales gain of USD 134 million following the group's share reduction in Hyundai Glovis.
"Unfortunately, the car carrying market has softened somewhat from the positive development in the second quarter. We see a decrease in demand for transportation of high and heavy cargo, following a slowdown in particularly global mining activity. With an advanced ro-ro fleet tailor made to ship high and heavy units, optimal fleet utilisation is sensitive to cargo mix," says Jan Eyvin Wang, president and CEO of WWASA. "Efficiency measures and cost cutting initiatives have, however, had a positive effect. The operating profit adjusted for internal restructuring costs was therefore as expected more or less in line with the second quarter."
On handling cargo challenges, Mr Wang says: "Cargo availability has been soft for some time, albeit a positive development in the second quarter. As a group, we continue to optimise operations and adjust capacity to current demand and our future cost base. Combining our financial strength and strong balance sheet with the underlying long term growth potential in the markets we operate, the group is well positioned to take its share of the expected growth going forward."
The high activity level in a seasonally strong quarter led to a sound contribution from the group's logistics segment: "Despite margin pressure over the last months, we have seen a steady increase in logistics activities," says Wang. "Going forward, we expect the activity level to keep up for most of our entities, but we might see a reduction in our US based operations following the loss of a global land based logistics contract for the US government." The board has proposed to pay an additional dividend of NOK 0.75 per share. An extraordinary annual general meeting will vote on the proposal on 27 November. If approved, the shareholders can expect the dividend to be paid on or about 10 December 2013. A dividend of NOK 4.00 was paid in May 2013.
The board anticipates that the demand for WWASA's shipping and logistics services remains at the present level. A strong focus on optimising initiatives, efficiency improvements and cost control continues to be central.