Wilh. Wilhelmsen sees ocean shipping bottoming out
Norwegian car shipper Wilh. Wilhelmsen ASA (WWI.OL) said the ocean transport market may be bottoming out after the weak global economy again hit its cargo volumes in the second quarter.
Wilhelm Wilhelmsen said that car recycling incentives around the world should boost car sales in the second half of 2009 and that weak sales in past quarters have reduced excess inventories, boding well for shipping volumes.
Additionally, stimulus packages should start to lift construction equipment sales late this year, boosting shipping.
In its second quarter earnings release, the shipper said it saw "signs of the ocean transportation market having hit the trough." Its operating profit rose 5 percent to $75 million.
Wilh. Wilhelmsen said that cargo volumes rose 11 percent quarter-on-quarter in the April-June period, but that in year-on-year terms were still down 39 percent. It said that it was especially hit by dropping volumes of Asian exports.
"The slide in ocean transportation of cars and ro-ro (roll on-roll off) cargo so far this year has been greater than the sales volume drop, bringing the global inventory levels down," Chief Executive Ingar Skaug said in a statement.
"Consequently, there is reason to expect the production decline to approach the trough and increased probability for higher production levels later this year. This will in turn lead to increased demand for transportation and related services which should result in higher utilisation of our vessels."
Wilh. Wilhelmsen said that to counter a lingering overcapacity caused by a large number of new vessels due to come onto the market, it planned to reduce its fleet to 137 vessels by the end of 2013 from 145 at the end of June.
Wilhelm Wilhelmsen said that car recycling incentives around the world should boost car sales in the second half of 2009 and that weak sales in past quarters have reduced excess inventories, boding well for shipping volumes.
Additionally, stimulus packages should start to lift construction equipment sales late this year, boosting shipping.
In its second quarter earnings release, the shipper said it saw "signs of the ocean transportation market having hit the trough." Its operating profit rose 5 percent to $75 million.
Wilh. Wilhelmsen said that cargo volumes rose 11 percent quarter-on-quarter in the April-June period, but that in year-on-year terms were still down 39 percent. It said that it was especially hit by dropping volumes of Asian exports.
"The slide in ocean transportation of cars and ro-ro (roll on-roll off) cargo so far this year has been greater than the sales volume drop, bringing the global inventory levels down," Chief Executive Ingar Skaug said in a statement.
"Consequently, there is reason to expect the production decline to approach the trough and increased probability for higher production levels later this year. This will in turn lead to increased demand for transportation and related services which should result in higher utilisation of our vessels."
Wilh. Wilhelmsen said that to counter a lingering overcapacity caused by a large number of new vessels due to come onto the market, it planned to reduce its fleet to 137 vessels by the end of 2013 from 145 at the end of June.