Wallenius Wilhelmsen Logistics ASA reports strong underlying results in the fourth quarter due to continued positive development for ocean volumes, though negatively impacted by increased net bunker costs and space charter expenses.
Regrettably, the company finds it necessary to increase antitrust provisions with $140 million.
Total income for WWL ASA was $1,036 million in the fourth quarter, up 8% from the third quarter, while adjusted earnings (EBITDA) came in at $182 million, a decline of 5% compared to the previous quarter.
Following good progress in realising merger synergies, WWL group has decided to increase its synergy target from $100 million to $120 million by 2019. This quarter, the company has reached about $75 million in confirmed annualised synergies.
“We are pleased to see the good underlying results for the fourth quarter, although down from the third quarter. The positive impact of stronger ocean volumes was partly offset by increased net bunker costs and increased space charter expenses to handle said volumes. After close evaluation we have decided to increase antitrust provision with $140 million. The situation is regrettable, and we look forward to putting this matter behind us,” said Craig Jasienski, President and CEO of WWL ASA.
Adjusted earnings for the ocean segment ended at $160 million in the fourth quarter, down 6% compared to the previous quarter, despite higher volumes. The decline is caused by increased net bunker costs and space charter expenses and a less favourable trade and cargo mix.
The landbased business continues with stable performance, and will benefit further from the acquisition of Keen Transport. Adjusted earnings for land-based operations were $24 million. Terminals reported strong results, while technical services in North America was negatively impacted by congestions at certain facilities coupled with year-end adjustments.
WWL AS and EUKOR have been part of anti-trust investigations into the car carrying industry since 2012. This process is now drawing towards an end with outstanding jurisdictions likely to reach their conclusion in 2018. Based on updated evaluations WWL group see it as necessary to increase the provision for anti-trust obligations from $300 million to $440 million. The preliminary purchase price allocation from the merger of Wilh. Wilhelmsen ASA and WallRoll AB has been updated to reflect the increased liability. As such, the increased provision does not impact the results.