Wallenius Wilhelmsen hits all-time highs in 2023

Wallenius Wilhelmsen hits all-time highs in 2023

Photo Wallenius Wilhelmsen

RoRo specialist Wallenius Wilhelmsen reported the strongest financial year on record pushed by general increased demand for cars and heavy equipment. This has also led to solid earnings and renewals of multi-year contacts at rates reflecting the current market. 

The company said its EBITDA was at an all-time high at $1.8 Billion, 18 per cent above the 2022 figures.

Total revenue was $5.15 Billion for FY 2023, an increase of 2 per cent compared to FY 2022. Shipping volumes were almost flat YoY as global supply chains were hampered by congestion issues, including the Red Sea effects towards the end of the year. Revenue for the shipping segment in FY 2023 was $3.88 Billion, down 4 per cent YoY. The shipping segment delivered a record adjusted EBITDA of $1.53 Billion, up 12 per cent YoY.

Read also: Wallenius Wilhelmsen inks machinery shipping deal with Korean client

Overall, logistics services saw volume improvements year over year across the business, positively impacting financial performance. Auto, terminal, and high & heavy all saw increased volumes, while inland services saw decreased volumes from the previous year. The total logistics segment revenue for FY 2023 was at $1.15 Billion, up 26 per cent YoY. The logistics segment delivered an adjusted EBITDA of $174 million, up 62 per cent YoY.

Total revenue from the government segment for the full year of 2023 was $324 million, up 7 per cent YoY from $302 million. This was mainly due to increased US flag cargo activity in large part attributable to cargo moved in support of the United States and NATO response to the Russian invasion of Ukraine. The government segment delivered an adjusted EBITDA of $130 million, up 61 per cent YoY.

Wallenius Wilhelmsen hits all-time highs in 2023
Lasse Kristoffersen; Photo: Wallenius Wilhelmsen

“I am deeply impressed by the dedication and hard work of our people, delivering great performance across our business. Our strong results are helped by strong demand in the markets we operate, and we are in a position to serve our customers and deliver value to our shareholders thanks to the people of this organization,” says Lasse Kristoffersen, President and CEO at Wallenius Wilhelmsen.

Strong year for high & heavy

The global markets for construction, agricultural and mining machinery had a very strong year in 2023 and saw higher volumes than in 2022, according to Wallenius Wilhelmsen.

The export of machinery in the construction industry has increased by 23.1 per cent year over year. The shipments to North America, Europe and the Middle East have shown a solid growth in 2023. The investments in infrastructure, energy and utilities have contributed to the high demand for equipment, whereas the demand for residential construction remains low. Despite the high demand for equipment, the construction industry has reported slowing activity due to a weak sentiment in some key markets, especially China and Europe. Additionally, inflation is still high, and it is expected that the interest rates will remain high for an extended period.

Read also: Wallenius Wilhelmsen bags $1.2 billion worth of new contracts

In 2023, agricultural machinery demand was stable but decreased towards the end of the year. Tractor sales in the US fell 8.2 per cent, while in Brazil they dropped by 20 per cent. Germany saw a 7.3 per cent increase, and the UK and Australia grew by 2 per cent. The UN food price index dropped 13.8 per cent but remains high. Tractor markets are predicted to be weak in 2024 with a 5-10 per cent decrease in volumes.

Global mining equipment experienced positive growth in 2023, despite a 4.9 per cent decrease in the World Bank Metals & Minerals monthly price index. However, the index for precious metals increased by 10.8 per cent. The prices for metals and minerals remain at unprecedented levels, resulting in high profits for the mining industry. Due to the increased demand for metals and minerals, the demand for machinery in the mining industry is expected to remain strong. Major manufacturers of construction and mining equipment have reported high order backlogs and solid demand, particularly in the Americas region.

Path to net zero

Wallenius Wilhelmsen has presented its revised climate targets in the annual report. The company aims to lead the industry towards zero emissions and in line with this, it has set a goal of achieving net-zero emissions by 2040. As part of this, the reduction target for 2030 as compared to 2019 has been increased to 45 per cent. This new target is aligned with the Science Based Targets Initiative.

“This year we made a significant leap towards net zero emission by partnering with our customers on buying reduced carbon freight. Another key milestone was the ordering of our Shaper class vessels capable of running on green methanol upon delivery. We also introduced zero-emission battery electric trucks in the U.S and opened the Orcelle terminal in Belgium. All these initiatives are vital parts of our strategic goal to deliver the world’s first end-to-end net zero service to our customers in 2027. This is a very ambitious target, and we need to break many barriers to get there. But together with our customers, we are confident that it is both possible and needed,” says Kristoffersen.

Author: Adnan Bajic

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