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Ocean carrier WWL's Q3 profits soar 120pc on 1,200pc higher revenue

OCEAN carrier Wallenius Wilhelmsen Logistics (WWL), a specialist in the transportation of automobiles, saw its net profits for the third quarter of 2017 skyrocket by 120 per cent year on year to reach US$55 million on revenues of $962 million, up a jaw-dropping 1,200 per cent.

WWL attributed the stellar third quarter results to continued positive development for sea freight volumes and cargo mix, reported American Shipper.

Third-quarter earnings from ocean operations were up five per cent to $170 million compared to the second quarter of 2017 due to improved trade and cargo mix, synergies and project cargo shipments, the company said in its latest financial statements.

Despite a seasonal drop in sea freight volumes from the second quarter, third quarter 2017 volumes rose 10 per cent year on year due to 23 per cent growth in Asia to North America volumes and an 11 per cent increase in Europe to Asia volumes.

Adjusted earnings for land-based operations decreased by nine per cent (or $3 million) compared with the second quarter, but significantly improved compared to last year's third quarter. The drop is due to reduced value-adding services and volume congestions at certain plant locations, WWL was cited as saying.

The auto markets generated mixed results for the carrier, with total exports in the third quarter falling 0.6 per cent year on year. Exports out of NAFTA countries during the quarter rose 6.1 per cent against 2016, while European exports increased 2.8 per cent and Japanese exports declined one per cent.

Exports out of South Korea in the third quarter dived 11 per cent year on year owing to a drop in volumes in the US as production capacity in Mexico expanded, said WWL.

WWL CEO Craig Jasienski was quoted as saying: "The results are driven by stronger volumes than anticipated, good trade mix on Ocean as well as reduced costs. On the other hand, we are still faced with tough competition and pressure on rates. We are well on the way with synergy realisation, but the next wave of synergies will take more time to achieve."

WWL completed the planned merger between Wilh. Wilhelmsen ASA and WallRoll AB in the second quarter of 2017, renamed Wallenius Wilhelmsen Logistics ASA (WWL ASA). About two thirds of the targeted annualised synergies have been confirmed, mainly related to the organisational restructuring and procurement, WWL said. The company has set a target of $100 million in annual synergies by 2019.