Wallenius Wilhelmsen is expecting more of the same in the coming quarters after posting another round of strong results.
The Oslo-listed car carrier owner reported a $328m profit for the three months ending on 30 September, a 26% jump from the $246m recorded in the same period last year with indicators suggesting the positive results will continue.
“With a strong [third quarter] behind us, we now expect Ebitda in the second half of 2023 to be at or above what we delivered in the first half, as vessel utilisation remains high and we see solid demand for our logistics services,” chief executive Lasse Kristoffersen said in the company’s earnings statement. “Moreover, the contribution from government services remains strong.”
It said multi-year contract renewals are coming in at significantly higher rates and are expected to support revenues “in 2024 and beyond”.
For vehicle sales, deepsea auto volumes were up 15.6% year over year, with Chinese exports continuing to surge, while forecasts suggest global gross domestic product will rise to 2.6% in 2023 despite some unevenness geographically.
The Wallenius Wilhelmsen outlook from both consumer automakers and the high and heavy machinery producers suggest more support for the car carrier market.
For the quarter, the company’s profit was backed by $1.3bn in revenue, a slight drop from the $1.4m reported in the same quarter last year.
It attributed the dip in revenue versus rise in profit to lower fuel surcharges for its shipping segment.
Its 126-ship fleet brought in $976m for the quarter, down from $1bn in the third quarter of 2022, due to those lower fuel surcharges.
Net freight rate, though, jumped to $52 per cbm up from $50 per cbm in the second quarter helping to offset lower volumes out of both Asia and the Atlantic basin.
But the positives for analysts came in Wallenius Wilhelmsen’s smaller segments: logistics and its US-focused government services division.
For logistics, revenue jumped 26%, from $231m in the third quarter of 2022 to $290m and Ebitda from $47m to $30m thanks to higher volumes.
Government services revenue was in-line year over year at $91m, but Ebitda hit $46m — a 63% rise from the $28m reported in the third quarter last year.
The company attributed that rise to increasing US-flagged cargo activity.
DNB Markets’ Jorgen Lian called the quarterly performance “solid”, but that the positive came from its smaller operations.
“The big take-away from the report was a bullish management now guiding for a better 2024 than 2023, which leaves upside to consensus estimates that today model” Ebitda flat year over year at $1.5bn, he said.
