Wilh. Wilhelmsen Holding ASA (WWH) has reported an increase in its operating profit by nearly 24% to $71.4m for the second quarter. The rise was due to a continued increase in deep sea volumes said the company, including continued export out of Korea and high and heavy volumes.
A spokesperson for WWH told Automotive Logistics that increased volumes for group subsidiaries Wallenius Wilhelmsen Logistics and Eukor had lifted total volumes transported, with Eukor contributing a 19% year-on-year increase.
Car volumes rose by 9% year-on-year, but were outperformed by high and heavy cargo, which increased by 24%.
The company said that the improved export out of Asia in 2010 contributed to lifting its earnings, as ex-Asia represents some of the core trades for WWASA group companies.
The impact of the Japanese earthquake in March had an obvious impact but the company has now reported that exports out of Japan rebounded faster than expected, with a strong showing in June.
At the same time, the company has also reported the benefit of cargo volumes going from Europe to China, which has “increased tremendously [over] the last couple of years” and contributed to earnings.
“The improved cargo mix as well as improved fleet utilisation have positive effects on total income,” added the spokesperson.
Total income for the parent company came to $838.8m, up 11.3% quarter on quarter.
In a statement Thomas Wilhelmsen, group CEO at WWH said: “Despite reduced Japanese production in the beginning of the quarter, the group recorded a total volume increase of 8% quarter-on-quarter, supported by continued export out of Korea and high and heavy volumes. With a modern and flexible fleet, we are confident with our tonnage position and ability to take part in the expected volume developments within cars and high and heavy cargoes.”
However, Wilhelmsen did admit that while the company’s maritime services segment delivered increased operating profit, margins were still disappointing because of the weak dollar. “With a substantial share of revenue in US dollars and the majority of costs in local currencies, a low US dollar has a negative effect on the operating profit and consequently the operating margin,” he said. “The operating profit was also impacted negatively by increased commodity prices and a cost accrual made in the second quarter.”
“To rectify the situation in the maritime services segment a profit improvement programme has been introduced and we expected to gradually improve operating profit towards the end of the second half,” he added.
Net profit after tax and minority for the group ended at $18.4m for the quarter, down from $22.3m in the first quarter.
The company said it expected positive development to continue driven by growth in Asian exports and emerging markets but noted that escalation of the debt problem in developed countries and continued depreciation of the US dollar may yet prove to be challenging for the group’s performance.