WW reduces fleet and cancels dividend in COVID-19 response

PRESS RELEASE – Wallenius Wilhelmsen (WW) is taking “decisive action” in response to the coronavirus. The company will reduce its active fleet by sending 10 vessels into cold lay-up, scrapping another four vessels and possibly return chartered tonnage to their owners. The company has also cancelled the payment of dividend.  

“The world has changed dramatically over the past weeks, and we are all feeling the effect. The impact these events will have on the world economy and global supply chains remains unpredictable, but it is increasingly clear that current events will have longer-term impacts. Our strong focus on synergies and cost efficiency over the past years have put us in a solid liquidity position, but we are taking early precautionary steps now, to preserve cash,” says Craig Jasienski, the CEO of Wallenius Wilhelmsen.

The current situation indicates an overcapacity of 10-15 vessels in the Wallenius Wilhelmsen’s 125 vessel fleet, according to the company. These vessells will be withdrawn from the fleet through a combination of early recycling and cold lay-ups.

Wallenius Wilhelmsen is working to recycle up to four vessels, all 24 years or older. These vessels will not be needed in the foreseeable future and this move reduces operational cost for the fleet going forward, as older vessels are less fuel-efficient. The vessels will undergo green recycling, the company states.

To further reduce operational costs, preparations are being made to initially place up to 10 vessels in cold lay-up. This will result in estimated cost savings per vessel in cold lay-up of USD 3-4,000 per day, depending on the length of lay-up.

Lastly, the company will also return three chartered vessels to their owners before the end of June, with another three vessels remaining under consideration to be cut from the fleet. Delivery of two newbuildings under construction will be further delayed.

Capex cuts

In addition to the fleet reduction, Wallenius Wilhelmsen has also cancelled payment of dividend, which in total would have amounted to about USD 60 million, and cancelled a number of investments. “This includes deferring some larger expansion projects in our landbased operations as well as the cancellation of four of the remaining scrubber installations”, the company states.

Author: Tobias Pieffers

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