11 thoughts on “Video Post: Wilhelm Wilhelmsen Holding Analysis (Part 2)

  1. is the 99M settlement positive or negative? I know that ASA had reserved 200M of which 50 have now been used, but do you have any idea about how large a part of the total “lawsuit” the US was accounting for – do you?


    1. I don’t have the exact percentages, WWASA doesn’t give out this info so I can only point to what they wrote in their Q3 report: “The EU and US are among the bigger jurisdictions.” If I had to guess at a final figure I would say 150 MUSD so I think about 50 MUSD will go back in the P&L – but it is a shot from the hip based on the numbers below…

      Interestingly, the fines from the US, Japan and South Africa in relation to one another actually correlate almost exactly with the population of the countries. The other jurisdictions that we know have investigations are: the EU, Chile and Brazil. A guess at fines based on population size: EU: 75 MUSD. Chile: 2 MUSD. Brazil: 15 MUSD. The latter two being less car dense in relation to population so I added in some discount. Based on slides that I have seen from WWASA there aren’t that many trade lines to Europe so the 75 MUSD number may be too high. But there may also be other countries that haven’t announced it publicly. Therefore my overall guess lands at 150 MUSD.

      In other words, I’m surprised the market isn’t going up today on this announcement. More uncertainty has been cleared and usually the market likes that.


  2. How would capital gains taxes work for Treasure ASA? If they just slowly sell the stakes in Glovis over time, would they be paying the capital gains tax (either in Norway or South Korea)? I know it is 28.75% for individuals, but is it the same for companies, or is Treasure ASA exempt due to the Norwegian participation exemption?


    1. If they sell it all in one go it will be tax exempt. Once they get below 10% ownership Treasure will have to pay tax. An example: If they sell 7% first and then the remaining 5%, they will have to pay tax on that last 5%.


    2. If they sell off the shares gradually, they will have to pay capital gains tax from what they sell from 10% ownership and downwards (they currently own 12.04% in Glovis). Not sure about the exact tax percentage – I think it is around 22-25%.


  3. Thanks a lot for you analyses on the blog/YT.

    Current dividend yield is sitting at 4% at WWI, which is a nice return of capital.

    The way I see it is that they need cash to buy back shares.
    – If they want to invest anti-cyclically in their business, they probably need all their cash from operations to reinvest into the business.
    – Where can they get this cash?
    -> By selling Glovis shares and paying a Treasure ASA dividend to the parent.

    Using this cash for buybacks would be a huge valuation arbitrage.

    Have they ever discussed buybacks at the WWI (or perhaps @WWASA) level? Somebody should explain to them the huge ROI otherwise…?


    1. Hi Thomas
      Yes, I agree that given the big 50-60% discount it seems a no brainer investment to use some of their earnings on buying back their own shares (or even issue a new bond at 3-4% coupon and use the money to buy back shares, which I have suggested to them), but it doesn’t seem to be in their DNA to buy back shares – at least not in recent years. My take is they are a traditional family business with a long term mindset preferring to grow the business with aquisitions via earnings. Not that buying back shares would really hinder that, but they seem to think so – I will bring it up on the capital markets day next month. Currently they are only distributing a tiny % to shareholders preferring instead to invest the rest in new businesses (inland logistics and lately into maritime as well as shown by the Survitec Group lately). This is the reason why I thought it would be especially important to look at their capital allocation record in this video.
      I don’t think selling Glovis shares will happen in the next few years due to strategic reasons. Hyundai Motor and Kia may not renew business with EUKOR (partly owned by WWASA/WWI) when the current contract is terminated after 2019. And from a practical viewpoint it may not even be that easy to sell their 12% stake. For tax reasons it would be best if they are able to sell it all in one go and that means somebody will have to come up with almost 1 billion USD. The amount of potential buyers is limited and the Chung family won’t buy it because of new government regulation so it may take some time to sell it once they decide to look for buyers.


      1. Really enjoyed both your videos about WWI, learnful for a novice investor as myself learning how to properly value companies


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