A decrease in transported volumes, combined with a
suboptimal cargo mix in the shipping segment,
negatively affected WWASA's results in the third
quarter of 2016. The logistics segment remained
stable.
Total income for the third quarter was USD 418
million, down from USD 827 million in the second
quarter. The operating profit ended at USD 32 million,
down from USD 417 million in the previous quarter.
The sharp decline in total income and operating profit
quarter on quarter was mainly caused by non-recurring
items related to the demerger of Den Norske
Amerikalinje with its shareholding in Hyundai Glovis.
Adjusted for non-recurring items, total income and
operating profit fell 8% and 27% respectively quarter
on quarter.
"The underlying third quarter result was weak mainly
due to low contribution from the shipping segment.
Volumes declined by 9% from the previous quarter, and
the cargo mix continues to be suboptimal given our
advanced fleet. A comprehensive strike in the
automotive industry in Korea caused a bigger decline
in transported volumes than anticipated", says Jan
Evyin Wang, president and CEO of WWASA.
"Our logistics activities continue to deliver
satisfying results and delivered stable performance
quarter on quarter", says Wang.
The car carrying markets are affected by surplus
tonnage and pressure on rates. "To mitigate the
negative impact, measures have been taken such as: re-
delivery of time charter tonnage, green recycling,
charter-out, slow steaming, and early dry-docking"
says Wang.
The letter of intent signed 5 September to merge
Wallenius and WWASA is expected to be completed during
first quarter of 2017.
Commenting on the prospects for WWASA, Mr Wang
states: "We do not see any clear signs of volume
growth in the remaining quarter of 2016. We also
expect a continued pressure on margins. The global
political landscape adds further uncertainties to the
picture".