Wallenius Wilhelmsen to Place Up to 10 Ships in Cold Lay-Up, Recycle 4 Oldies as Part of COVID-19 Response

30 March 2020

The group said it would withdraw the proposed dividend for 2019, recycle up to four vessels, all 24 years old or older, and place up to 10 vessels in cold lay-up to mitigate vessel overcapacity at the company.

 

The proposed dividend would have been equivalent to about USD 60 million.

 

“The world has changed dramatically over the past weeks, and we are all feeling the effect. The impact these events will have on the world economy and global supply chains remains unpredictable, but it is increasingly clear that current events will have longer term impacts. Our strong focus on synergies and cost efficiency over the past years have put us in a solid liquidity position, but we are taking early precautionary steps now, to preserve cash,” says Craig Jasienski, President & CEO of Wallenius Wilhelmsen.

 

Wallenius Wilhelmsen said that its overcapacity equaled to a fleet of 10-15 vessels net of already planned redelivery of charter vessels. Hence, the decision to recycle older vessels and reduce operational costs for the fleet.

 

“The vessels will undergo green recycling in line with the group’s long-standing policy and be reported accordingly to the Ship Recycling Transparency Initiative. The early recycling is expected to lead to a potential impairment of up to USD 40 million,” the company added.

 

The company is also preparing to place up to 10 vessels in cold lay-up and thus secure further cost reductions.

 

The estimated cost saving for a vessel in cold lay-up is USD 3-4,000 per day depending on length of lay-up.

 

Wallenius Wilhelmsen added that of the 11 vessels available for redelivery at the start of the year, four have been redelivered and another three will be redelivered before the end of June.

 

One vessel has been extended and the remaining three are under consideration.

 

Wallenius Wilhelmsen has two newbuildings under construction that will be further delayed due to the disruption COVID-19 is causing. Both vessels have secured financing which can be drawn at delivery, the company pointed out.

 

The RORO shipping specialist said that given the uncertainity caused by the global pandemic, its management has reduced capex spend to a minimum, prioritizing safety and maintenance of critical expenditures.

 

This includes deferring some larger expansion projects in the company’s landbased operations as well as the cancellation of four of the remaining scrubber installations.

 

“As the COVID-19 pandemic continues to progress and mitigating actions by authorities evolve quickly, supply chains are being hit hard and vehicle producers are shutting down plants around the world. We continue to actively monitor the situation and its ongoing effects on the global supply chain and will adjust our approach as necessary in line with developments,” the shipping company concludes.

Comments (0)


Today
8:03am
Hi Jenna! I made a new design, and i wanted to show it to you.
8:03am
It's quite clean and it's inspired from Bulkit.
8:12am
Oh really??! I want to see that.
8:13am
FYI it was done in less than a day.
8:17am
Great to hear it. Just send me the PSD files so i can have a look at it.
8:18am
And if you have a prototype, you can also send me the link to it.

Monday
4:55pm
Hey Jenna, what's up?
4:56pm
Iam coming to LA tomorrow. Interested in having lunch?
5:21pm
Hey mate, it's been a while. Sure I would love to.
5:27pm
Ok. Let's say i pick you up at 12:30 at work, works?
5:43pm
Yup, that works great.
5:44pm
And yeah, don't forget to bring some of my favourite cheese cake.
5:27pm
No worries

Today
2:01pm
Hello Jenna, did you read my proposal?
2:01pm
Didn't hear from you since i sent it.
2:02pm
Hello Milly, Iam really sorry, Iam so busy recently, but i had the time to read it.
2:04pm
And what did you think about it?
2:05pm
Actually it's quite good, there might be some small changes but overall it's great.
2:07pm
I think that i can give it to my boss at this stage.
2:09pm
Crossing fingers then

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