Leading roll-on/roll-off shipping company Wallenius Wilhelmsen reported strong fourth quarter results on Tuesday, driven by improved freight rates in shipping and vessels returning from layup.
The company reported Q4 EBITDA of $306 million, increasing 37% quarter-over-quarter, despite supply chain disruptions such as semiconductor chip shortages and labor issues related to the pandemic, the company said.
“The results combined with prepayment of deferred debt allow us to return to a dividend paying position, and we are happy to propose a solid dividend,” said Torbjørn Wist, CFO and acting CEO at Wallenius Wilhelmsen.
The company said the strong earnings were driven mainly by performance in its Shipping business and improved profitability in Logistics, while Government saw a drop in margins. It also credited a fully sailing fleet after reactivating all ships it had put into cold lay-up in response to the onset of the COVID1-19 pandemic. At one point during the pandemic, Wallenius Wilhelmsen had some 16 ships in cold lay-up, representing over 10% of its fleet.
“Our key drivers this quarter are improved freight rates, operational efficiency and a full sailing fleet. As of this quarter, all vessels are back from lay-up and we also got our final newbuild Nabucco delivered in October,” says Wist.
The company listed its highlights from the quarter as follows:
Wist pointed out that the global supply chain is still impacted by a pandemic-driven market imbalance, with risks being additional parts and labor shortages, geopolitical tension, and COVID-19.
“Moving forward, we will have to continue to leverage our operational flexibility to maneuver the ongoing global market volatility,” he said.
“We continue to expect the supply-demand balance in Shipping to remain favorable over the mid-term due to the overall global fleet situation. Logistics volumes will benefit from gradual improvement of automotive semiconductor chip supply expected during 2022. In the absence of further volatility and disruptions to supply-chains, these developments are expected to further improve financial flexibility and help drive shareholder value creation.
“Potential risks include further parts shortages, labor shortages, increased geopolitical tension, negative impacts of any significant disruptions to the global supply chains, and operational impact from COVID19 outbreaks,” Wist said.
Wallenius Wilhelmsen group operates over 130 vessels through its subsidiaries Wallenius Wilhelmsen Ocean, Wallenius Wilhelmsen Solutions, EUKOR and ARC
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