Wallenius Wilhelmsen rejects poorly paying car contracts
Wallenius Wilhelmsen has recorded a 7% lower income in the third quarter of 2019 due to a drop in volumes. The company is faced with slower markets and “consciously” chose not to carry low paying or unprofitable cargo.
“We continue to make conscious choices not to renew Ocean business under conditions that we do not consider economically sustainable. While we do see a softening of auto markets globally, we are prepared to adjust to changes in volumes and continue to run a profitable business, serving our clients in the best possible way,” says Craig Jasienski, CEO Wallenius Wilhelmsen.
Total income for the third quarter amounted to USD 955 million, down 7% compared to the same quarter last year. The operational result (ebitda), however, was up by USD 61 million to a total of USD 213 million. A substantial part of the increase (USD 41 million) was related to the implementation of IFRS 16, but the underlying improvement was driven by the Ocean segment.
The board of the company maintains “a balanced view” on the outlook for the company. Uncertainty in the car business remains due to weaker auto sales in all major markets, potential risk of increased trade barriers and a volatile macro picture. Market rates remain at a low level and generally under pressure, the company says.
The news will have implications for traditional project carriers as Wallenius Wilhelmsen will chase other breakbulk and project cargo even more aggressively. The company has recently strengthed its global breakbulk team and is working hard to convince customers that ro/ro ships are a better alternative for project cargoes.