Australia’s disdain for the brown marmorated stink bug hampered Wallenius Wilhelmsen’s shipping operations in the first quarter, but boosted its logistics business en route to another strong result.
The Oslo-listed car carrier giant reported a $173m profit for the first three months of 2023 on the back of $1.25bn in revenue and Ebitda of $398m, its third-highest ever.
But shipping volumes dipped by 3%, in part due to congestion at Australian ports amid efforts to keep out invasive bugs and seeds.
“Australia is heavily reliant on their agriculture and therefore have strict biosecurity policies in place to ensure no contaminants enter the country”, including brown marmorated stink bugs and other contaminants, Wallenius Wilhelmsen said in its first-quarter earnings report.
This, along with lower fuel surcharges, meant shipping revenue fell to $956m from $1bn in the fourth quarter of 2022, though it was up from the $930m reported in the first quarter last year.
The company said biosecurity efforts boosted its logistics services segment, where revenue shot up to $277m, a sequential increase from the $261m reported in the previous quarter and the $211m from the first three months of 2022, as Wallenius Wilhelmsen facilities were involved in decontamination efforts.
It said the decontamination process was “rigorous” and the volume of contaminated cargo outweighed terminal capacity.
The Australian Department of Agriculture, Fisheries & Forestry describes the brown marmorated stink bug as potentially destructive to more than 300 agricultural and ornamental plants — including corn and soybean crops — as well as the Australian way of life.
“Our [brown marmorated stink bug] fumigation services at our terminals, and seed removal processes in the Melbourne terminal, ensure all shipments arriving in the country meet government regulation,” the company said.
Overall, the $173m profit was down sequentially and year over year.
The company reported $246m in profit in the fourth quarter and $177m in the first quarter of 2022.
Net freight revenues came in at $51 per cbm, a slight dip from the $52 per cbm earned in the previous quarter.
Voyage expenses increased slightly because of higher cargo, port and canal charges, but all three were at “relatively low levels”.
Alongside its logistics segment, Wallenius Wilhelmsen’s US-focused government services vertical saw growth too, with higher US-flag cargo activity.
It said the US government was moving more cargo in response to Russia’s invasion of Ukraine.
Revenue for its US-flag business came in at $72m, up from $58m a year earlier.
