Wilhelmsen profits rise as cargo volumes increase

Norwegian shipping company Wilh. Wilhelmsen ASA, a half owner of Wallenius Wilhelmsen, reported net profit of $74.2 million for the second quarter compared to $62.4 million in the same 2007 period.

Operating income, which includes both operating revenue as well as share of profits from associates and joint ventures and gains on sales of assets, was $379.6 million for the quarter compared to $267.4 million.

The company said strong demand for maritime services and increased cargo volumes contributed to a solid increase in profit. Income was higher because of a growth in cargo volumes carried by a larger fleet, rising demand for maritime services and higher bunker cost compensation, said Ingar Skaug, group chief executive officer at Wilh. Wilhelmsen. Although our operating profit has improved, the WW group would benefit from a less tight market. He said the maritime services and logistics segments delivered increased operating profit, but higher operating costs and bunker prices reduced the operating profit in the shipping segment. He also said operating margin was hurt by a weakened U.S. dollar and a one-off provision of $21.9 million related to a global administration cost reduction program at Wallenius Wilhelmsen Logistics.

Given bunker prices at the current level during the second half of 2008, we maintain the expectation that the group's operating profit for 2008 will exceed the level achieved in 2007, Skaug said.