Norway-based shipping company Wallenius Wilhelmsen has implemented precautionary measures to protect their operations during the Covid-19 pandemic.
The company has planned for the redelivery of chartered vessels, recycling and cold lay-ups and has withdrawn its dividend for the previous year.
The dividend withdrawal is expected to generate $60m.
Wallenius Wilhelmsen is planning to recycle four vessels and is also looking into putting ten vessels in a cold lay-up.
The four vessels that will be recycled are said to be more than 24-years-old. Due to the overcapacity of the market, the company does not expect to use the vessels in the future.
This will reduce the operational costs as older vessels incur higher costs.
Additionally, the company is planning to place ten vessels in cold lay-up, which is expected to adjust the costs in the future.
The company expects to save approximately $3,000-$4,000 daily based on the duration of the lay-up.
Two newbuildings are being constructed and it is expected that their delivery will be postponed. Wallenius Wilhelmsen added that ‘both vessels have secured financing, which can be drawn at delivery’.
Wallenius Wilhelmsen president and CEO Craig Jasienski said: “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.”