Transcript Newbuilding Strategy

Lysaker, 27 October 2005
Ingar Skaug
Group chief executive officer
WW ASA Company Structure
SHIPPING SERVICES
Car, ro-ro and project cargo
Wallenius Wilhelmsen Lines (50%)
EUKOR Car Carriers, Korea (40%)
ARC (American Roll-on/Roll-off Carrier
(50%)
Wilhelmsen Lines
Mark I Shipping, Singapore (50 %)
Wilhelmsen Lines Car Carrier (UK)
Wilhelmsen Lines Ship owning
Fidelio Ltd. Partnership USA (50%)
EUKOR Car Carriers, Singapore (40%)
Other shipping
Dockwise (21%)
Wilhelmsen Offshore & Chartering
Express Offshore Transport
Sea Launch Logistics
LOGISTIC SERVICES
WW Solutions (50%)
Compagnie d’Affrètement et de Transport
(CAT) (20%)
Distribution and Auto Service (DAS) (25%)
American Auto Logistics (AAL) (50%)
American Logistics Network (ALN) (50%)
Richard Lawson 50%
GLOVIS Korea (25%)
MARITIME SERVICES
Wilhelmsen Maritime Services
Ships service products
Ships service network
Ship management
Vehicle processing centre
PVP (50%) US Pacific
AVP (50%) US Atlantic
OVP (50%) Australia
Ag – Ready (50%)
Terminals
Baltimore (50%)
Zeebrugge (50%)
Southampton (50%)
Pyongtaek (40%)
Kotka Euro Terminal
Ships equipment
Maritime solutions and financial
services
WWL
 Continuingly high ocean revenues, but as usual a seasonal slowdown in Q3
 Continuingly strong High & Heavy and non containerized cargo volumes
 Still high marginal costs, due to historically high bunker prices and a tight charter
market
EUKOR
 Continues to deliver revenue and results above expectations
 Strike in Korea in September lead to decrease in car volumes, negatively influencing
the result
 Even though the strike had a limited duration, it resulted in uplanned idle fleet time
 HMC and KIA exports have increased 18 % first eight months of the year, compared
to same period last year
American Roll-on Roll-off carrier (ARC)
 Have increased the fleet from five to eight vessels during Q3
 One vessel transferred from WW ASA and two from Walleniusrederierna
 ARC has expanded its Middle-East Service
 The ARC expansion is part of WW ASAs strategy to grow its US based activity
Fleet renewal
 To secure tonnage-capacity, and an optimized fleet – there is an extensive newbuilding programme in place for EUKOR and WWL
 25 ships on order, 14 for EUKOR and 11 for WWL
 We are pleased with the timing of the
contracts, in view of yard price
developments
 New-building prices have peaked, we are
are currently observing price development
Source: Clarkson
Fleet renewal
 New-building programme, and a less tight tonnage market will enable us to:
 optimize fleet utlilization, sailing schedules
 replace older vessels with newer and more efficient ones
 A somewhat softer market holds opportunities and upside for WW ASA
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Historically high bunker prices
WTI $/bbl
380cst $/tonne
350
WTI
380cst bunker prices, Rotterdam
60
300
50
250
40
200
30
150
20
100
10
50
Bunkers
 Historically high bunker prices, direct bottom line effect and a challenge for
dispositions forward
 WWL is to a large extent covered through bunker adjustment factors in contracts,
EUKOR through bunker hedging instruments
 Clearly an area of continued focus for our operating companies
Logistics
 Companies perform well, apart from CAT
 WWL
 DAS (US based)
 Richard Lawson Continent
 Wallenius Wilhelmsen Solutions
 Terminals
o CAT: restructuring measures under way
 Glovis
 US companies
 American Auto logistics
 American Logistics Network
 Vehicle processing centres
Glovis IPO
Transport
Loading/unloading
 GLOVIS Co Ltd 25 % owned by WW ASA
 Plan IPO at Korean Stock Exchange at the end of the year
 IPO to enable GLOVIS to keep up with HMC/KIA investment growth
 Share issue will comprise 20 % of share capital after IPO
Storage
 WW ASA positive to IPO, as it:
– will increase liquidity of shareholding
– will support further profitable growth
 Our shareholding will be 20% after the IPO
Packaging
Wallenius Wilhelmsen Solutions
Integrated Logistics from vision to reality
– current logistics contract counterparts
 Australia:
CNH, Peugeot, Porsche, Iveco, John Deere NZ, BMW, Nissan Trucks
 USA:
DaimlerChrysler, Ford, BMW, CNH, Nissan, Buehler, Van Hool
 Europe:
BMW
 2wLogistics, Thailand:
BMW, GMT, Honda, Toyota, Isuzu, Porsche, Jaguar, Ford, Nissan, Komatsu
Unitor compliments the WMS service offering and
increases the customer base substantially
In addition we are reducing our
combined capacity cost by 10%
Key Account Management
At Shipyards
In ports
Ships Service
Shared Services & Support
On ships
• 30 MUSD annual cost savings - full effect in
2007
– Joint management
– Joint location
– Shared back-office functions and systems
• 28,1 MUSD in one-off restructuring charges
(Q3 2005)
Wilhelmsen Maritime Services is moving towards the vision of
becoming the shaper of the maritime services industry
Wilhelmsen Maritime Services – key facts
and figures
Key figures
• WMS annual turnover approx 550 MUSD
• Approx 45 000 port calls
• Around 170 000 deliveries to some 15 000 vessels per
year
• Service and delivery to more than 1 200 ports and 145
shipyards
• Approx 300 ships on management
• Approx 4 500 full time employees
• Approx 8 500 seafarers available through our crewing
network
WMS geographical scope and presence
Present in 72 countries and operations in approx 380 sites
The world of WMS is organised in 8 regions
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Northern Europe & UK (Oslo)
Central Europe (Rotterdam)
Southern Europe & North Africa (Genoa)
Eastern Mediterranean (Piraeus)
Middle East & Black Sea (Dubai)
South East Asia (Singapore)
North East Asia & Oceania (Shanghai)
Americas (Houston)
WMS prior to Unitor acquisition
Unitor Agent
Unitor Office
WMS product and service offerings
comprise...
New building services
Ship management
Port operation and cargo services
Dry docking services