Chairman's Statement

Ocean Wilsons Holdings Ld
24 April 2002



Chairman's Statement


Accounts and Results

The Group's operating profit for the year ended 31 December 2001 grew 34% to
£11.5 million (2000 £8.6 million) reflecting a general improvement in operating
margins and the benefit of non-recurring income.  Turnover including joint
ventures for the year grew 8% to £88.1 million.  This compares with £81.4
million in the previous year.

Profit for the financial year at £3.6 million was £1.4 million lower than last
year (£ 5.0 million).  Included in this are two items of note, the realised
deficit on sales of investments in the year £280,000 (2000 £1.9 million surplus)
and the net exchange loss on foreign currency borrowings £8.7 million (2000 £4.1
million).

Earnings per share were 10.0p per share compared to 12.9p in 2000.


Taxation

The £2.4 million tax charge for the year represents an effective tax rate for
the period of 42.6 % (2000 32.0%).  The deterioration in the Group's rate of tax
is principally due to a change in the geographical mix where profits were
incurred. The corporate tax rate prevailing in Brazil is 34% although there is
no Group tax relief so that losses and profits in separate companies cannot be
offset.


Dividends

In light of the recovery in the $Real and improved performance of the operating
business in the first quarter 2002, the board is recommending that the final
dividend remain unchanged at 5.00p (2000 5.00p).   If approved by shareholders
at the forthcoming Annual General Meeting this will make a total dividend for
the year of 6.00p (2000 6.00p).  The full year dividend is 1.7 times covered by
profit for the financial year (2000 2.2 times).


Share repurchase programme

During 2001 the Group repurchased and subsequently cancelled 2.08 million shares
at an average price of 81.3 pence per share before costs.  Since November 1998
the company has repurchased in total, 4.3 million shares at an average price of
85 pence each before costs. In total £3.7 million has been returned to
shareholders.


Balance Sheet

At 31 December 2001, Group net assets amounted to £56.5 million (2000 £61.7
million). The decrease in Group net assets is attributable to the devaluation of
the $Real as the greater part of the Group's net assets are $Real denominated.
On a per share basis the Group's net assets represent 159.89p (2000 164.73p).
Net assets located in Brazil account for 86.82p per share (2000 86.08p) and net
assets outside Brazil 73.07p (2000 78.65p). The decrease in net assets outside
Brazil is due to our share repurchase programme and timing on dividends remitted
from the Group's Brazilian subsidiaries. The total of cash and investments held
by the Group outside Brazil was 79.8p per share at year-end.


Cash flow

Net cash inflow from operating activities during the year was £18.1 million
(2000 £13.8 million). Capital expenditure increased £15.4 million to £26.1
million. Of this £17.3 million was incurred in vessel construction and equipment
for Tecon Salvador. A further £9.2 million was invested in the share portfolio.

A total of £2.5 million was received in dividends from joint venture reflecting
their strong performance in the period.

Year-end cash balances amounted to £31.9 million (2000 £36.4 million) of which
£8.6 million (2000 £21.0 million) was held outside Brazil.  The decrease in
non-Brazilian cash balances reflects the investment made in the share portfolio
during the year.  At 31 December 2001 the share portfolio was £19.6 million
(2000 £11.0 million).


Borrowings and Interest

The Groups borrowings increased £10.6 million from £56.8 million to £67.4
million. New loans were arranged to finance vessel construction and equipment
purchases for Tecon Salvador. The majority of the Group's loans, £44.7 million
are to finance the building of new vessels and are repayable over periods up to
16 years with an average maturity of 13 years.  The increase in net debt
resulted in an increase in gearing from 33.2% at 31 December 2000 to 62.9% at
yearend.

The Group's net interest paid in the profit and loss was £0.1 million (2000 £0.5
million interest earned). This excludes the net exchange movements on foreign
currency borrowings held by the Brazilian subsidiaries, which are shown
separately in the profit and loss account.

The Group's Brazilian subsidiaries have significant US dollar loans and $Real
denominated loans that are monetarily corrected by the movement in the US dollar
/ $Real exchange rate.  The Group assumes this risk as there is no long-term
financing denominated in $Real available to us for capital expenditure.  Current
interest rates on $Real commercial borrowings in Brazil are 20% per annum.  Due
to the prohibitive cost of hedging the $Real the Group does not hedge its net
long term exposure.  The devaluation of the $Real against the US dollar has
generated a large $Real denominated loss on the Group's US dollar and US dollar
linked loans of  £8.7 million (2000 £ 4.1 million).  The cashflow effect of
these losses in $Reais is only realised when repayments are made over the life
of the loans, up to 16 years.


Exchange rates

During 2001 the $Real showed significant volatility against the US dollar
falling as low as 2.82 in September before recovering to 2.31 at yearend.  In
the year to 31 December 2001 the $Real devalued 18% against the US dollar (from
1.95 to 2.31) and 15% against sterling (from 2.91 to 3.36).  In 2000 the $Real
devalued 9% against the US dollar (from 1.79 to 1.95) and 1% against sterling
(from 2.89 to 2.91).


Investment Portfolio

Hanseatic Asset Management LBG which manages the investment portfolio reports as
follows:


Market Environment

At year end the portfolio's assets amounted to £24,157,394 (including cash under
management), a decline of 0.8% over the year.   This should be seen in the
context of the worst year for equity investors since 1990 and the first time
global share markets have recorded losses in two consecutive years since 1973-4.
It was a year that will always be remembered for the terrorist attacks in the
United States.   However, from the perspective of the financial markets the
dominant feature was the dramatic easing of monetary policy by the Federal
Reserve.  Starting on January 3rd the Federal Fund rate was reduced on eleven
separate occasions during the year leading to the lowest interest rates in 40
years.  This was an attempt by the Federal Reserve to prevent the deflationary
forces, that have mired the Japanese economy for several years, from spreading
to the US as that economy faltered and tipped into recession.  Unlike the
recessions of living memory, this one was not so much caused by policy
tightening but as a legacy of the capital-spending boom, especially in
information technology, and the bursting of the ensuing bubble.  The old market
adage 'do not fight the Fed' i.e. be bullish on stock prices when rates are
falling did not work in 2001.  The pricking of the IT bubble and a broad based
retreat in corporate earnings weighed more heavily on investors than falling
interest rates and the MSCI World Index declined by 15.7% in sterling.  Within
markets the worst performance came from Japan which fell by 27.4%, also in
sterling terms, and Continental Europe where the German stockmarket declined by
22.6% and France by 24.7%.  In Japan, the optimism that accompanied Koizumi's
election and the prospects for change proved premature.  Instead a combination
of structural weakness in the financial system and the crisis of confidence that
characterises deflation drove prices lower.  For the European bourses, the
seeming intransigence of the ECB in the build up to the Euro's launch
exacerbated negative trends.  Better (relative) performance came from the
Asia-ex Japan markets and some of the emerging markets, notably Russia.


Portfolio Activity

There has been a significant amount of activity in the portfolio.  The aggregate
of sales and purchases gives a turnover ratio of 70% which is significantly
higher than we would anticipate going forward.  There were three main threads to
this portfolio restructuring.  Firstly, we have eliminated many of the direct
holdings in companies as we are not looking to get broad market exposure from a
portfolio of individual companies.  Our policy for direct holdings is to
concentrate on 'rifle shots' on a smaller group of 'special situations'.  In
other words companies - large or small - where we believe events and valuation
can lead to a significant return over time irrespective of the market
background.  An example of this would be Scientific Games in the United States,
which manages State lotteries and tote betting at race meetings.  This company
generates large cashflow and is rapidly paying down debt creating value for
equity investors but until recently there were no published research reports.
Secondly we have attempted to exploit the weak market environment by reducing
our cash reserves.  Cash assets accounted for 55.26% of the portfolio's assets
at the beginning of the year but we have reduced this to 19% by year end.
Whilst we are obviously keen to preserve capital, our objective is to beat the
return available on cash, i.e. money needs to be put to work.  Thirdly, we have
increased our exposure to specialist sector and hedge funds to take advantage of
the greater flexibility in this account to own such vehicles.  Approximately 20%
of the portfolio is now held in hedge funds and a further 13% is held in
specialist high yield funds.  The common theme behind these new fund additions
is to focus on real or absolute returns as opposed to capturing equity index
movements.


Investment Outlook

The indicators so far in 2002 are pointing to a recovery in economic activity as
the inventory cycle moves into a rebuilding phase.  However, this recovery is
likely to be a muted affair and the balance of risks remains skewed to the
downside.  The aggressive easing policy of the Federal Reserve limited the depth
and duration of recession as the interest sensitive components of demand such as
housing and autos remained strong.  The consequence of this is that neither of
the two traditional engines of economic revival can be expected to provide much
of a boost.  A lack of pent up demand and a high debt burden will limit the
consumer's contribution to this recovery especially in the USA.  Added to this
are the problems of excess capacity in many sectors that built up in the boom
years plus the overstretched nature of many corporate balance sheets.
Deflationary forces are deeply entrenched in the world's economy and pockets of
inflation or pricing power will remain few and far between.

As far as financial markets are concerned, the issue is how profitable recovery
is likely to be.  Assuming that the world economy is, albeit fitfully, on the
mend then the Central Bank easing cycle is over.  While there is little
immediate prospect of rates rising, an extended plateau in interest rates is
more likely.  With valuations in most markets still high in historical terms,
then the main driver will be the extent of profit recovery.  Such was the
weakness in reported profits driving the third quarter of 2001, that by the time
we reach the third quarter of 2002, the basis of comparisons should be
favourable.  The prospect of this, together with ample liquidity, are supportive
for equities, which we would expect to beat the return on cash this year.
However, with deposit rates so low, at least in terms of the last forty years,
that does not imply large nominal percentage increases.  In the United States a
strong dollar and over-valuation should limit prospects and recent revelations
about accounting practices are bound to have an unsettling influence on
investors.  Euroland should fare better this year after such a torrid 2001.  The
weak Euro is stimulative and there should be more pent up demand amongst
consumers as the interest rate component of demand fell during Continental
Europe's recession.  However, Europe's politics and excessive bureaucracy remain
restraining obstacles for the private sector.  In Japan, the situation has
deteriorated a lot further than many, including us, had anticipated.  Yet
despite the problems of the banking system and a sense of vacuum in terms of
policy, the stock market selling at an eighteen year low has considerable
recovery potential.

Our investment stance is to remain cautious on the broad picture, but to
increase exposure to selected areas where we consider the risk reward equation
is developing favourably.  Perhaps the best example of that in the current
environment are some of the developing markets in Asia where we have a growing
commitment.  After a painful readjustment period in the late 1990's, Asian
economies are once again net creditors, and corporate balance sheets are
healthy.  Domestic demand is rising and savings rates high.  Valuations are
cheap by almost any measure.  The markets are poised to do reasonably well in
our central scenario of gradual economic revival.  Should we have underestimated
the snap back potential in the United States they could do even better


Ascension Underwriting Limited

At this early stage it is not possible to accurately predict the final result
for our insurance underwriting activities in 2001. Current estimates received
from the company's advisors, Cathedral Capital Management Ltd range between a
profit of £100,000 to a loss of £190,000 although this is before any additional
central fund levy and assumes no future major losses will impact the year. The
Group increased underwriting capacity to £4.8 million for the year commencing 1
January 2002. The Group's capital commitment is currently limited to
approximately £2.0 million.


Future Prospects

Helped by an increase in Brazilian exports, trading results for the first
quarter in 2002 are ahead of the corresponding period in 2001. To date the
crisis in Argentina has had no serious impact on the Group's businesses.

Our associate company BRASCO, which is now the predominant third party oil and
gas logistics service provider in Brazil, is actively pursuing a shorebase
facility in the Rio de Janeiro area to consolidate its market position and
improve business growth prospects.

The Brazilian economy is performing well and the $Real has remained relatively
stable in the first quarter against the US$ dollar, trading between 2.28 and
2.41.  Although fundamentals of the Brazilian economy remain strong 2002 is a
Presidential election year which always brings a degree of uncertainty.


23rd April, 2002
Jose F. Gouvea Vieira



Operating Review

Brazil

The Brazilian economy faced internal and external shocks in 2001, energy
rationing, and prolongation of the Argentinean crisis; terrorist attacks to the
USA and considerable foreign exchange devaluation. The underlying strength of
the Brazilian economy ensured that Brazil survived these crises relatively
unscathed.  Nevertheless the dependence on foreign investment and financing to
fund the current account deficit leaves the Brazilian economy vulnerable to any
contraction of liquidity in the international market. A 6% increase in Brazilian
exports generated a trade balance surplus of US$2.6 billion, against a deficit
of US$ 730 million in 2000.

After weakening during most of the year the $Real in the fourth quarter
underwent a considerable revaluation trend with the de-coupling of the Brazilian
economy from that of the Argentine situation, the exchange devaluation against
the US dollar fell from a peak of 39% to 18% for the year.

The economic outlook for Brazil in 2002 remains quite favourable however one of
the main issues in 2002 will be the presidential election in October. The
uncertainty in relation to the future of Brazilian economic policy may adversely
impact the perception of Brazil risk and consequently exchange and interest
rates.


Towage

Towage had a successful year with the Group maintaining its position as the
leading provider of towage services in Brazil. Although our overall market share
reduced and the number of vessels attended were in line with 2000, revenue in
sterling terms rose 4% on the previous year. This was principally due to a
partial recuperation in towage tariffs resulting from improved market conditions
although tariffs and margins remain well below historical levels. Ocean towage
and towage support for salvage had a particularly good year which may not be
repeated in 2002.

The two towage joint ventures with Docenave, Consorcio Baia de Sao Marcos and
Consorcio Barra dos Coqueiros both had successful years.


Shipyard

The Guaruja shipyard remains an essential component in the Group's vessel
construction and maintenance programmes. During 2001 the company signed
contracts with Petrobras to operate two PSVs. (platform supply vessel) for them.
Construction of these vessels began at our shipyard during the year and both are
due for delivery in the first quarter of 2003. Each vessel is being constructed
using internationally recognised designs and specifications and the total cost
of each vessel is approximately US$14 million.


Ship Agency

Ship agency had a successful year with revenues increasing 18%. A total of 930
tramp vessels were attended during the period, substantially more than the 790
vessels serviced in 2000.  The increase was mainly due to a greater
participation in the petroleum market, a better sugar crop and increase in
market share, and the successful acquisition of new clients. On the downside the
consolidation amongst major shipping lines had a negative effect on our business
as we lost some important liner clients that were purchased by other operators
during the period.

Margins improved over 2000 as the ship agency division benefited from the weak
$Real that prevailed through most of the year.


Port Operations and Logistics

The port operations and logistics division continued to grow with revenues
increasing 10% in sterling terms on prior year.

Tecon RG accounted for 95% of the containers moved in the port of Rio Grande.
Total movements in the year were 343,610 TEUs (twenty foot equivalent units),
18% higher than 2000. The two new Portainers installed in the second half of
2000 assisted in improving productivity, with average moves per hour increasing
from 25.9 to 30.4 moves.

Poor sales mix continues to depress results at Tecon Salvador. However the new
commercial strategy implemented in 2001 and substantial capital investments made
in the year are already having a positive impact in 2002. Approximately US$ 16
million has been invested in the project to date principally on lease
downpayments for the terminal area, two Portainers and civil works. The
portainers started operations in 2002 and are already generating significant
productivity gains. Project financing of US$ 8.5 million has been provided by
the IFC (International Finance Corporation), a member of the World Bank.

The joint venture bonded warehouse Eadi Santo Andre had a successful year
building on the performance of 2000. Our site was enhanced by a new 10,800m(2)
warehouse in June to accommodate the increased cargo passing through the
terminal.

Brasco reinforced its position as one of the most important logistics provider
to the Brazilian oil and gas market.  In 2002, our associate will concentrate
its effort on obtaining long term customer agreements after the establishment of
its own shorebase facility in the Rio de Janeiro area, which is currently under
negotiation.




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