Wallenius Wilhelmsen ASA Minor model adjustments

We have updated our estimates owing to Wallenius Wilhelmsen’s Q3 results, which were broadly in line with our estimates and prompted limited underlying revisions. Hence, we continue to see considerable cash flow inbound (NOK62/share FCFE for 2025–2026e and NOK29/share excess long-term cash) that should be directed towards attractive shareholder returns in the years ahead, as we expect contracts to be renewed at better rates with decent visibility. We do not consider these changes to be material,...

'25e to be much better than '24e

Q3 slightly below cons, but several one-offs

Adj. EBITDA of USD 504m (-6% vs. ABGSC, -2% vs. cons). Shipping, Logistics and Holdings below, beat in Government. Q3 miss on higher costs, no other notable news.

All eyes on new contracts

CMD: Educational, but no breaking news

Educational presentation, but minor news. No further NBs, upsizing 4/12 NBs from 9,300 to 11,700 CEUs. Slightly positive for the share.

ABGSC Shipping Daily 21 August

Mixed tanker and dry bulk market, LPG up. Shipping peer group trades at P/NAV 0.83x. Definitive findings of anti-subsidy investigation (draft) - Tariffs adjusted. EU tariffs on Chinese passenger EVs - Any effects yet?. Chinese passenger car export grows despite flattening in Europe.

Wallenius Wilhelmsen ASA (Buy, TP: NOK150.00) - Leaving money on the t...

The company is paying out a considerable USD1.75 per share dividend in 2024, which includes the H1 2024 and the entire 2023 DPS, but an extraordinary dividend has yet to materialise despite a vast cash position and still-strong outlook. We forecast in excess of NOK70/share available for distribution by end-2026. We reiterate our BUY and have raised our target price to NOK150 (145).

Special dividend postponed

Another solid quarter, but no special dividend

EBITDA of USD 507m (+3% vs. ABGSC, +7% vs. cons). Logistics and Government above ABGSCe, Shipping below. Q2 beat countered by no special dividends.

Wallenius Wilhelmsen ASA (Buy, TP: NOK145.00) - Extraordinary dividend...

We have updated our model for the announced MIRRAT sale, EUKOR accounting changes and recent market developments, ending up largely aligned with consensus adj. EBITDA for 2024–2026e. While we are below for Q2e, we believe the company has ample firepower for a sizeable extraordinary dividend. We reiterate our BUY, but have cut our target price to NOK145 (154).

Extreme market tightness could last into '27

Red Sea closure stretches extreme tightness into '27. Red Sea to stay closed – net rates up, volumes down. TP NOK 194 (203) – BUY.

Wallenius Wilhelmsen ASA (Buy, TP: NOK154.00) - Revealing put-option l...

The company is set to implement a reporting change that will considerably impair equity, while highlighting potential challenges in ongoing contract discussions.

Change in accounting treatment of EUKOR

Change in methodology implies equity reductions of USD 977. Symmetrical strike price set at P/E of 10x. Negative share price reaction of 2-4% expected.

Leverage too low, more dividends needed

Q2 will likely see the first special dividend. '25e EBITDA +24% vs. consensus. TP NOK 203 (200) – BUY.

Wallenius Wilhelmsen ASA Minor model adjustments

We have marginally increased our revenue estimates and revised our cost assumptions, owing to the Q1 results. With no surprises related to the Red Sea disruption or the Baltimore bridge accident, focus should shift to shareholder distributions. The revised dividend policy allows for extraordinary dividends at the board’s discretion, something we have not seen before, and the first possibility could be in connection with Q2. We calculate cNOK25/share in excess cash today, potentially on top of N...

EBITDA as expected and no big news

Adj. EBITDA of USD 439m (1% vs. ABGSC, -1% vs. cons). Shipping services and Logistics above ABGSCe, Government and Holdings belowFlat share price given no surprises in the conference call

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.

Wallenius Wilhelmsen ASA Minor model adjustments

We have marginally lowered our 2024-2026 estimates (results due at 07:00 CET on 8 May), on the more impactful Red Sea disruptions and the company’s estimated USD5m–10m negative EBITDA effect from the Baltimore bridge collapse. We believe WAWI could further renew its contract portfolio at significantly higher levels and build earnings momentum for the years ahead. So far in 2024, the company has announced USD2.8bn of committed contracts (nearly USD1bn in annual revenues, or 19% of 2023, for the n...

A brewing challenge for the yards

Our 17th Annual Energy & Shipping Conference was well attended by investors and industry executives showcasing the still-growing interest for the sectors. Limited yard capacity is fuelling high newbuilding prices and raising freight rate expectations for the vast fleet renewal necessary in the coming decade. Long lead times underpin a bullish supply story for much of shipping in the coming years, albeit exposed to geopolitical risks affecting trade patterns. Our overall impression was general op...

Wallenius Wilhelmsen ASA (Buy, TP: NOK152.00) - Market strength with l...

Q4 was somewhat disappointing, but the potential cash flows remain attractive. With 46% of volumes up for renewal this year, and with a tight market also fuelled by Red Sea and Panama Canal disruptions, we believe there should be sequential net rate improvement at least until 2025e. Thus, we see up to ~NOK85/share in potential dividends by end-2026e. We reiterate our BUY and have raised our target price to NOK152 (148).