WWL & Maritime Services
The daughter company, Wallenius Wilhelmsen Logistics, or WWL, were hurt by lowering rates, higher bunker costs and currency headwinds. Surprisingly for me the improvements in the mining segment wasn’t significant enough to offset the negatives and the share price was hammered down 20%. The stock had climbed 200% in less than two years so even slightly deteriorating fundamentals got punished harshly.
For the maritime segment the EBIT-margin improved slightly from 4% to now 6%. Not enough improvement to warrant a rerating of this segment in my Excel valuation.
Discount to NAV has narrowed
The updated excel sheet for Wilhelm Wilhelmsen Holding, WWI, shows the discount to NAV at 35%, which is the lowest it has been for the past 24 months. As a result of that I have scaled down my position somewhat.
hammerinvesting 
Hi, any thoughts for the recent correction? Looks compelling at this level. Thanks for sharing your work.
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Hi Dan. I also think the downward move has been exaggerated and the valuation is becoming increasingly interesting. Admittedly I did not see the pressure on shipping rates continuing like it has (and which led me to decrease my position earlier in the year) and I also thought WMS would perform better than it has – so those are two question marks that I’d like to see improving before increasing my position again. The failed Drew aquisition also puts into question management capital allocation capabilities.
On the other hand, it is good see how they underpromised and overdelevered on synergies unlike most other companies when the word synergy is mentioned. This ought to give them margin protection going forward. I also like the fact they are exposed to the mining sector, which I think will do well in the coming years.
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Hi, hope you are well. Did you keep on following WWH story?
You wrote that you scaled down somewhat. Currently the price is close to the levels you first wrote about the company. What is your opinion if I can ask?
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Hi Robert, thanks for asking. The short version is yes, I do follow it though not as intensely. I like the price right now which is at around 50% discount to NAV according to my calculations (if you accept the idea that their Treasure stocks should be valued at Huyndai Glovis price minus 20%). This is the biggest discounts I have witnessed but there are some issues too because of some bad aquisitions of Survitec and Drew Marine (the latter was only attempted and was shut down by the authorities). Both were costly so one can question how shrewd their capital allocation strategy is. Still 50% is too much so I added to my position in both WWI and Treasure in December after scaling down almost all back in the March/April period of last year. Mostly due to luck due to other opportunities. I certainly did not foresee the decline that happened and I can’t imagine it will stay at this level for much longer.
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