Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Improved operating results with a profit of $168 million for the quarter, equating to roughly USD3.8 per share.
- Strong performance in Wilhelmsen's Maritime Services with $32 million in EBITDA and a 15% margin.
- New Energy segment showing robust growth with $17 million in EBITDA and a 9% increase in top-line revenue.
- Significant contributions from associates, particularly Wallenius Wilhelmsen and Hyundai Glovis, leading to $142 million share of profit.
- Positive progress on ESG initiatives, including reductions in CO2 emissions and improvements in health and safety measures.
Negative Points
- Accounting issues within Wallenius Wilhelmsen impacting Wilh. Wilhelmsen Holding ASA's financials, resulting in a restatement of accounts.
- Cash deployment for working capital purposes in the Maritime Services sector, which may affect liquidity.
- Potential challenges in managing the significant order book in the PCTC and RoRo trade sectors.
- Geopolitical and security challenges that could impact the company's operations and the broader industry.
- The need for continuous adaptation to disruptions in the maritime industry, which may require strategic repositioning.
Q & A Highlights
Highlights from Wilh. Wilhelmsen Holding ASA (WLHSF, Financial) Q2 2024 Earnings Call
Q: Can you elaborate on the financial performance of Wilhelmsen's Maritime Services this quarter?
A: Thomas Wilhelmsen, Group CEO: The Maritime Services segment saw a 19% growth in top-line revenue, partly due to the Zeaborn acquisition. Adjusting for this, the growth stands at 5%, resulting in an EBITDA of $32 million and a margin of 15%.
Q: What were the key drivers behind the strong performance in the New Energy segment?
A: Thomas Wilhelmsen, Group CEO: New Energy achieved $80 million in top-line revenue, a 9% increase, and $17 million in EBITDA. Investments in infrastructure and platforms, such as Reach and NorSea Group, have been pivotal. Additionally, the consortium with Parkwind in Belgium won the SNII tender, contributing to the success.
Q: How did the acquisitions impact the overall financial results?
A: Christian Berg, Group CFO: The acquisitions, particularly in the Maritime Services segment, contributed significantly to the top-line growth. The Zeaborn transaction alone added $25 million, although 80% of this follows different accounting principles. Overall, the acquisitions have bolstered our financial performance.
Q: Can you provide more details on the dividend policy and share buybacks?
A: Christian Berg, Group CFO: We paid a first dividend of NOK10 during the quarter and have the potential for an additional NOK8 later in the year. We also bought back 440,000 shares, increasing our shareholding in Edda Wind to 31%. We have the flexibility to buy back up to 9% more shares.
Q: What are the future projections for the company?
A: Thomas Wilhelmsen, Group CEO: We have a strong platform and a positive market outlook for the remainder of 2024. The shipping industry has seen significant positive movements, and we are well-positioned to capitalize on these trends. However, geopolitical and security challenges remain unpredictable.
Q: How is the company performing on its ESG initiatives?
A: Thomas Wilhelmsen, Group CEO: We are tracking well on our ESG index, reducing CO2 emissions, and improving health and safety measures. Gender balance within the Group is also progressing positively. Data integrity remains a challenge, but we are making significant strides.
Q: What is the impact of the accounting changes in Wallenius Wilhelmsen on Wilhelmsen Holding?
A: Christian Berg, Group CFO: Wallenius Wilhelmsen's change in accounting for the put/call option of EUKOR's 20% ownership led to a restatement, reducing our equity and investment by $352 million. This is an accounting adjustment and does not reflect any operational changes.
Q: How is the cash flow situation and what are the expectations for the rest of the year?
A: Christian Berg, Group CFO: We started the year with $224 million in cash. While we have deployed cash for working capital in Maritime Services, we expect this to stabilize. Dividends from Wallenius Wilhelmsen and Hyundai Glovis will continue to contribute significantly to our cash flow.
Q: What are the strategic priorities for the company moving forward?
A: Thomas Wilhelmsen, Group CEO: We will continue to explore new opportunities and integrate recent acquisitions. Our focus remains on shaping the maritime industry and delivering strong results for our shareholders. We are confident in our forward-looking strategy for the rest of the year.
Q: How is the company managing the current geopolitical and security challenges?
A: Thomas Wilhelmsen, Group CEO: The maritime industry has adapted well to recent disruptions. While geopolitical and security challenges are hard to forecast, the industry is well-placed to manage these risks. Floating assets provide flexibility, allowing us to reposition as needed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
