In 2020, Wallenius Wilhelmsen was impacted by the COVID19 pandemic as it hit the world economy and intercontinental trade. At the onset, the group took a proactive and precautionary approach to safeguard the health, safety and security of employees, crew and society at large, while maintaining services for customers and a solid financial position. While EBITDA declined more than revenue and volumes for both ocean and landbased operations, the early and decisive action taken to manage costs and capacity prevented an even greater negative impact.
Flexibility in the fleet has been a core strategic choice since the inception of Wallenius Wilhelmsen, ensuring our ability to adjust the fleet up or down with shifting market demand. Seven vessels available for redelivery at the end of charter contracts were redelivered in 2020, 15 vessels were put in cold lay-up, up to four vessels above the age of 24 years were recycled and vessel operations were optimised in Q2 and Q3. For the landbased business, temporary lay-offs of production workers became necessary as production was halted across several sites during Q2 to curb the spread of COVID19.
Measures were taken to protect and strengthen liquidity during the year. Wallenius Wilhelmsen withdrew the proposal of a USD 60m dividend for 2019, cancelled and/or postponed planned capital expenditure and entered into temporary agreements with the support of its bank group to waive certain covenants and to defer USD 70m of instalments scheduled for the second half of 2020. In August, the group successfully completed a new NOK 2.0 billion senior unsecured bond issue.
During the second half of the year, global automotive sales rebounded, fuelled by pent-up demand, incentives and improved unemployment figures. The high and heavy (H&H) segment had proved more resilient than automotive during the year and ended the final quarter with higher volumes than in Q4 2019. The increased volumes translated into a solid return of activity for Wallenius Wilhelmsen, though sales patterns remained unstable. The landbased segment ended the final quarter stronger than Q4 2019, while the ocean segment experienced margin pressure from ramped-up costs due to the rapid return of volumes in key markets as well as increasing fuel prices.
COVID19 significantly impacted global equity markets as well as the company’s key markets during 2020. This led to a volatile year for the Wallenius Wilhelmsen share price, which reached a low of NOK 7.58 in March down from NOK 21.82 at year end 2019 before recovering and ending the year at NOK 23.20, representing an increase of 6% during 2020.