Wallenius Wilhelmsen has inked two more contracts, including one for about $1bn.
The Norwegian car carrier owner said on Tuesday that it had started the 10-figure contract with “one of the world’s leading construction and mining equipment manufacturers” in November 2023.
The contract win run for three years plus a two-year extension option.
The second deal runs for two years and is with what the company described as one of the largest automotive distributors in the Americas and is worth about $200m.
Both dollar figures are based on expected volumes over the life of the contracts.
“Continuing our positive start to 2024, these two separate, significant multi-year contracts further strengthen our existing partnerships with key customers in the high and heavy and automotive segments,” chief customer officer Pia Synnerman said.
The two contracts announced on Tuesday follow a three-year, $290m agreement announced last week with a South Korean construction machinery company. That contract includes a two-year extension option.
All three contracts include support for Wallenius Wilhelmsen’s decarbonisation efforts, such as the use of biofuel and improvements of the existing fleet.
They were also all done at current market levels with values based on anticipated volumes over the lives of the contracts.
The car carrier market has been running hot in recent months, with rates higher due to Chinese electric vehicle exports vying for limited space on vessels.
The recent attacks in the Red Sea and the Gulf of Aden could push rates even higher, market observers told TradeWinds recently, with several major car carrier owners — Wallenius Wilhelmsen included — announcing they would reroute around the Cape of Good Hope.
The company did not disclose exact rates or customers.
But Petter Haugen at ABG Sundal Collier said the $1bn contract was likely with Catepillar or Komatsu, both “top tier counterparties with limited credit risk”.
He said the rate for a new car was likely around $100 per cbm, with high and heavy cargo could yield a 50% premium adding up to $330m in annual revenue taking up as much as 4% of Wallenius Wilhelmsen’s total volume.
It works out to 6% of the bank’s total estimated 2024 revenue, Haugen said.
Wallenius Wilhelmsen’s Oslo-listed shares started off slow on Tuesday, dipping slightly before bouncing back. In midday trading, shares were up NOK 5.85 ($0.56) to NOK 103.10.
