Leading roll-on/roll-off shipping company Wallenius Wilhelmsen is reporting a strong start to 2022 driven by performance in its shipping segment.
The company reported first quarter EBITDA of $309 million, compared to $31 million in Q1 2021, making for its strongest quarterly performance since the merger of Wilh. Wilhelmsen and Wallenius Lines in 2017. The solid EBITDA helped drive an increase in its cash position to $759 million.
“Despite a volatile market and supply chain issues we deliver a strong EBITDA. I am proud to see how our employees across the globe strive to find solutions for our customers despite challenging times and the tragic war in the Ukraine that is affecting us all,” says Torbjørn Wist, CFO and acting CEO at Wallenius Wilhelmsen.
The company said operational disruptions and port congestions in several central ports around the world became considerably more challenging during Q1 due to the Covid-19 resurgence in China, earthquake in Japan, stinkbug season, and labor shortages in ports. Consequently, Wallenius Wilhelmsen has seen challanges from waiting times at several key ports.
“We are doing our best to mitigate these challenges by having a continuous dialogue with our customers and re-routing to other ports with less congestion whenever possible. We also see that our long-lasting customer relationships are equally important to be able to find the best solutions,” says Wist.
In April, Wallenius Wilhelmsen issued a NOK 1.25 billion sustainability-linked bond, removing remaining bond refinancing risk in 2022. “I am very pleased with the successful bond issue, which links our sustainability track record and goals to attract existing and new investors,” says Wist.
Wallenius Wilhelmsen is also reporting only limited direct impact on its business from the war in Ukraine so far. But the company is facing some “margin pressure” due to fuel prices and supply chain issues.
The strong Q1 results reflect a fully sailing fleet after the company last year reactivated 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.
Looking forward, Wallenius Wilhelmsen had this to say:
“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 the latter part of 2022. This is expected to allow us to consolidate financial flexibility and help drive shareholder value creation in the absence of further volatility. Current disruptions to the global supply chains negatively impact the group and its customers.
“Potential risks include further disruptions to the global supply chains, operational impact from further Covid-19 outbreaks, fuel supply disruption, labor cost and availability, further escalation of the war in Ukraine and negative global economic developments.”
Wallenius Wilhelmsen group operates over 130 vessels through its subsidiaries Wallenius Wilhelmsen Ocean, Wallenius Wilhelmsen Solutions, EUKOR and ARC
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