Wallenius Wilhelmsen books USD 285 million loss in first quarter
A combination of the pandemic and slower markets have seen Wallenius Wilhelmsen’s volume drop by 20 percent. As a result, the carrier’s sales declined by 18% and the company booked a net loss of 285 million dollars.
Total income was 843 million dollars compared to just over a billion dollars in the same period last year. Operating income (ebit) showed a loss of 130 million dollars.
Wallenius Wilhelmsen experienced lower volumes in both the ocean and landbased business. In Ocean the decline was driven by a combination of weaker markets and the pandemic, while the landbased business was impacted by temporary factory shutdowns.
“Our industry is caught in an unprecedented situation where business volumes are driven sharply down by closures and cuts in customer production due to Covid-19 measures and weakened demand. We have taken a range of actions to adjust capacity, reduce costs and protect our cash position through this turbulent phase. Combined with our strong financial situation going into this, I am confident that we will see through this crisis,” says Craig Jasienski, President & CEO of Wallenius Wilhelmsen.
The ro/ro carrier in March said it would take decisive action in response to the virus and announced it would send 10 to 15 vessels into cold layup, scrap another four vessels and possibly return chartered tonnage to its owners.
Next to capacity cuts, Wallenius Wilhelmsen has also temporarily laid off 2,500 workers at several landbased processing centres in the USA and Mexico in response automaker plant closures and suspended dividend payments.
Situation to worsen
In the very near term, the company will be impacted by a sharp drop in volumes driven by measures taken globally to fight the Covid-19 pandemic, Wallenius Wilhelmsen says looking ahead. The current drop in volumes has created excess capacity in the industry, which is expected to persist for some time and delay any rate improvements. The measures to recycle, lay-up, idle and slow-steam ships will go some way in countering this effect, the carrier reports.
Despite the bleak outlook, Wallenius Wilhelmsen expects that the significant measures that are being taken and the company’s strong financial starting point will help the company through this crisis.
PCJ recently interviewed Wallenius Wilhelmsen’s senior breakbulk manager Vedran Muratbegovic. You can read the interview here.