Third quarter earnings for Wilh. Wilhelmsen slumped 42 percent from a year ago as a weaker-than-expected improvement in demand for ocean car transportation and roll-on, roll-off cargoes forced the Norwegian shipping and logistics group to keep 18 ships in lay-up.
The Oslo-based company's operating profit fell to $47.8 million in the three months to Sept. 30 from $83.1 million in the 2008 period while income shrunk to $604.9 million from $866.6 million.
Wilhelmsen re-activated two laid-up ships as cargo volume in the third quarter increased by seven percent from the previous three months.
"The current market puts severe pressure on earnings for the shipping segment. However, the third quarter shows signs of market recovery, albeit at a slow pace," said Thomas Wilhelmsen, deputy group chief executive.
The shipping unit's third quarter operating profit slumped to $18.8 million from $55.9 million in the corresponding period in 2008.
"Demand for ocean transportation of cars picked up during the third quarter compared with the slump earlier in the year," which the carrier attributed to the impact of government cash-for-clunkers incentive schemes in the United States and Europe and low inventory levels.
But demand for ro-ro and project cargoes, particularly construction and mining machinery, remained low in the third quarter.
"Demand for heavy machinery has not picked up yet … due to the considerable resources and time required for planning large infrastructure projects."
The short term outlook for ro-ro volume is more uncertain with demand "highly dependent" on government stimulus packages aimed at construction activity which are due to come into effect in 2010, Wilhelmsen said.
"Together with improved housing markets, primarily in the U.S., demand for heavy construction machinery should pick up from next year," the carrier said.
Operating profit in the first nine months fell to $162.6 million from $217.6 million a year ago and net income dropped to $1.85 billion from $2.6 billion.
Wilhelmsen said the outlook remains uncertain with the development of its operating profit highly dependent on the strength of the global economic rebound.
The Oslo-based company's operating profit fell to $47.8 million in the three months to Sept. 30 from $83.1 million in the 2008 period while income shrunk to $604.9 million from $866.6 million.
Wilhelmsen re-activated two laid-up ships as cargo volume in the third quarter increased by seven percent from the previous three months.
"The current market puts severe pressure on earnings for the shipping segment. However, the third quarter shows signs of market recovery, albeit at a slow pace," said Thomas Wilhelmsen, deputy group chief executive.
The shipping unit's third quarter operating profit slumped to $18.8 million from $55.9 million in the corresponding period in 2008.
"Demand for ocean transportation of cars picked up during the third quarter compared with the slump earlier in the year," which the carrier attributed to the impact of government cash-for-clunkers incentive schemes in the United States and Europe and low inventory levels.
But demand for ro-ro and project cargoes, particularly construction and mining machinery, remained low in the third quarter.
"Demand for heavy machinery has not picked up yet … due to the considerable resources and time required for planning large infrastructure projects."
The short term outlook for ro-ro volume is more uncertain with demand "highly dependent" on government stimulus packages aimed at construction activity which are due to come into effect in 2010, Wilhelmsen said.
"Together with improved housing markets, primarily in the U.S., demand for heavy construction machinery should pick up from next year," the carrier said.
Operating profit in the first nine months fell to $162.6 million from $217.6 million a year ago and net income dropped to $1.85 billion from $2.6 billion.
Wilhelmsen said the outlook remains uncertain with the development of its operating profit highly dependent on the strength of the global economic rebound.