Interim Results
Ocean Wilsons Holdings Ld
27 October 2005
Chairman's Interim Statement
for Ocean Wilsons Holdings Limited
Accounts and results
The first half of the year has seen good revenue growth compared to the same
period last year. Revenue increased by 32% to US$ 123.8 million (2004: US$
93.8million) with increases in most key businesses. As a result of changes in
the sales mix and the appreciation of the $Real, operating margins were slightly
down. Nevertheless Group operating profit improved 23% to US$19.0 million (2004:
US$ 15.4 million).
The towage business continued to perform strongly. Towage revenue increased 14%
in US Dollar terms driven by an increase in the number of vessels attended and
towage support for salvage operations although operating margins were adversely
affected by the appreciation of the $Real against the US Dollar. The shipyard
generated significant revenue in the period, with work continuing on the
modernisation and conversion of the platform supply vessels for Delba Maritima
and Companhia Brasileira de Offshore (CBO). The Tugboats Haris and Cetus were
completed at our shipyard as part of our ongoing tug fleet renewal programme.
The ship agency division's turnover increased 26% in US Dollar terms compared to
the same period last year due to higher volumes and pricing adjustments.
In Tecon Rio Grande volumes were up 11% at 311,901TEUs (Twenty foot equivalent
units), (2004: 280,015 TEUs). The expansion of Tecon Rio Grande commenced in
February with the signing of a contract to deliver two new super post panamax
cranes in March 2006; construction of the new berth is forecast to begin in
early 2006. Project finance of US$16.2 million for the project is being provided
by the International Finance Corporation (IFC), a member of the World Bank.
Revenue at Tecon Salvador grew 54% over first half 2004, influenced by growth in
higher priced ocean going traffic, the appreciation of the $Real and increased
volumes.
Investment revenues in the first half of 2005 were US$ 11.3 million, compared
with US$ 4.2 million in the first half of 2004. Higher investment revenue
resulted mainly from increases in the fair value of the investment portfolio,
exchange gains on cash and trading investments and improved income from our
underwriting subsidiary at Lloyds. Investment revenue will remain sensitive to
movements in the US Dollar /$Real exchange rate.
Finance costs amounted to US$3.1 million (2004: US$4.3 million) benefiting from
exchange gains on the US Dollar borrowings held by $Real functional currency
businesses, principally Tecon Salvador and Dragaport.
Profit before taxation was US$27.8. million (2004: US$17.2 million) reflecting
the higher operating profit and investment revenues. Earnings per share based on
ordinary activities after taxation and minority interests were 54.1cents (2004:
27.0cents).
Exchange rates
The $Real appreciated 12% against the US Dollar from 2.66 at 1 January 2005 to
2.35 at the period end.
Strategic review
In September 2005 the Board of Ocean Wilsons Holdings Limited announced that it
had concluded the review of its strategic options in relation to the Company's
Brazilian operations and had decided to continue to remain focused on its
current operations and to invest in their future development.
The acquisition of a further 33% equity interest in Tecon Rio Grande S.A.
announced in August 2005 for $Real 55.5 million, approximately US$23.7 million
is consistent with the Board's strategy and strengthens the Company's position
in the growing container terminal market in Brazil. For the six months ended 30
June 2005 Tecon Rio Grande was consolidated 100% with a 33% minority interest.
The Board believes that the strength of our Brazilian business continues to
present exciting opportunities for future growth and remains committed to
creating long term value for shareholders.
Dividend
The board has resolved that an interim dividend of 2.00cents per share (2004:
2.00 cents per share) be paid on 30 November 2005 to shareholders on the
register at close of business on 11 November 2005. As previously stated future
dividend payments will be determined by the Board taking into consideration all
aspects of the Group's business, but primarily profitability and free cash flow.
Cash flow and capital expenditure
Net cash inflow from operating activities was US$10.2 million in the first six
months of 2005 compared with US$ 7.4 million in the same period last year,
reflecting the improved operating result and normal working capital movements.
Capital expenditure in the period amounted to US$18.9 million (2004: US$ 6.6
million), the major elements being expenditure on tug construction and equipment
for the expansion of Tecon Rio Grande. At 30 June 2005 Group debt was US$99.6
million (31 December 2004: - US$ 99.7 million).
Investment Portfolio
At 31 August 2005 the investment portfolio (including cash under management of
US$3.1 million) held outside Brazil was approximately US$65.1 million, a gain of
4.7% since year end.
Balance sheet
Equity increased from US$ 147.4 million at the beginning of the year to US$
167.3 million mainly due to the profit in the period less the dividend in
respect of 2004 which was approved and paid in the first half of 2005. At 30
June 2005, the Group's net assets amounted to US$ 167.3 million (31 December
2004: - US$ 147.4 million). This is the equivalent of $4.73 per share (31
December 2004: - $4.17). Net assets located in Brazil account for $3.13 (31
December 2004: - $2.64) and net assets outside Brazil $1.60 (31 December 2004: -
$1.53 cents).
International Financial Reporting Standards
The financial information contained in this interim report, including all
comparatives, has been prepared in accordance with International Financial
Reporting Standards ('IFRS') in place of UK GAAP. Further details are given in
the IAS interim restatement available on the Company's website and released to
the London and Bermuda stock exchanges. The Group also published financial
information in accordance with IFRS for the year ended 31 December 2004 on the
11 October 2005.
IFRS have had and will continue to have a significant impact on the Group's
accounts and I encourage all shareholders to read the details contained in these
news releases.
Future Prospects
The operating results for the third quarter are marginally down on the same
period in 2004 although we remain positive. The Groups results remain sensitive
to movements in the $Real exchange rate.
J F Gouvea Vieira
26 October 2005
Ocean Wilsons Holdings Limited
Preliminary Announcement
At the board meeting held today the following announcement of the unaudited
results of the Company and its subsidiary companies for the six months ended 30
June 2005 was approved by the directors.
Consolidated Income Statement
for the six months ended 30 June 2005
Unaudited Unaudited Audited
six months six months year to
to 30 June to 30 June 31 December 2004
2005 2004
US$'000 US$'000 US$'000
Notes
Revenue 123,849 93,762 217,713
Raw materials and consumables used (16,924) (8,819) (27,027)
Employee benefits expense (31,237) (23,636) (56,501)
Depreciation & amortisation expense (6,363) (5,523) (11,523)
Other operating expenses (50,368) (40,425) (89,056)
Operating profit 18,957 15,359 33,606
Share of profit of associate 201 - 515
Investment revenues 11,295 4,209 18,931
Finance Costs (3,117) (4,331) (6,499)
Profit on disposals of fixed assets 515 1,960 1,635
Profit before tax 27,851 17,197 48,188
Income tax expense 2 (6,697) (7,031) (13,926)
Profit for the period 21,154 10,166 34,262
Attributable to:
Equity holders of parent 19,116 9,546 31,599
Minority Interests 2,038 620 2,663
21,154 10,166 34,262
Earnings per share Basic and diluted 54.1c 27.0c 89.4c
Ocean Wilsons Holdings Limited
Consolidated Balance Sheet
as at 30 June 2005
Unaudited Unaudited Audited
as at as at as at
30 June 2005 30 June 2004 31 December
2004
US$'000 US$'000 US$'000
Non Current Assets
Intangible assets 2,470 1,084 2,314
Property, plant and equipment 138,834 112,665 123,829
Deferred tax assets 17,503 8,616 12,598
Investments in associates 880 10 568
Available for sale investments 4,272 4,272 4,272
163,959 126,647 143,581
Current Assets
Inventories 5,492 4,218 5,031
Investments held for trading 59,015 50,952 57,938
Trade and other receivables 52,080 39,840 51,086
Cash and cash equivalents 64,463 55,061 70,915
181,050 150,071 184,970
Total Assets 345,009 276,718 328,551
Current liabilities
Trade and other payables (45,551) (32,685) (49,283)
Current tax liabilities (6,862) (5,093) (10,504)
Obligations under finance leases (3,553) (3,224) (3,034)
Bank overdrafts and loans (14,947) (14,716) (13,502)
(70,913) (55,718) (76,323)
Net current assets 110,137 94,353 108,647
Non-current liabilities
Bank loans (84,638) (84,120) (86,171)
Deferred tax liabilities (18,462) (10,477) (13,765)
Provisions (1,716) (1,444) (1,733)
Obligations under finance leases (2,014) (3,742) (3,132)
(106,830) (99,783) (104,801)
Total liabilities (177,743) (155,501) (181,124)
Net assets 167,266 121,217 147,427
Capital and reserves
Share capital 11,390 11,390 11,390
Retained earnings 120,933 80,248 101,137
Capital reserves 16,077 22,665 23,122
Revaluation reserve 1,353 1,353 1,353
Hedging and translation reserve 6,329 (1,382) 1,406
Equity attributable to equity holders of the parent 156,082 114,274 138,408
Minority interests 11,184 6,943 9,019
Total equity 167,266 121,217 147,427
Ocean Wilsons Holdings Limited
Consolidated Cash Flow Statement
for the six months ended 30 June 2005
Unaudited Unaudited Audited
six months to six months to year to
30 June 2005 30 June 2004 31 December 2004
US$'000 US$'000 US$'000
Net cash inflow from operating activities 10,165 7,430 29,142
Investing Activities
Interest received 5,931 2,389 11,095
Dividends received from trading investments 381 314 597
Proceeds on disposal of trading investments 4,615 5,328 9,171
Income from underwriting activities 1,289 - 324
Proceeds on disposal of property, plant and 1,090 3,849 3,873
equipment
Purchases of property, plant and equipment (18,943) (6,575) (20,190)
Acquisition of investment in an associate - - (17)
Purchases of trading investments (4,888) (11,587) (15,669)
Acquisition of subsidiary - - (1,174)
Net cash used in investing activities (10,525) (6,282) (12,000)
Financing Activities
Dividends paid (6,365) (5,658) (6,365)
Repayments of borrowings (5,844) (5,267) (11,024)
Repayments of obligations under finance leases (599) (527) (1,097)
New bank loans raised 5,750 3,885 9,413
(Decrease)/increase in bank overdrafts (318) 10 289
Net cash used in financing activities (7,376) (7,557) (8,784)
Net (decrease)/increase in cash and cash equivalents (7,736) (6,409) 8,358
Cash and cash equivalents at beginning of period 70,915 61,734 61,734
Effect of foreign exchange rate changes 1,284 (264) 823
Cash and cash equivalents at end of period 64,463 55,061 70,915
Exchange rates used
Period End
Brazilian $Real to US Dollar 2.35 3.10 2.66
Sterling to US Dollar 0.56 0.55 0.52
Ocean Wilsons Holdings Limited
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2005
Transfer Total
to Currency recognised Balance at
Balance at retained translation Income for the
1 January earnings adjustment period Dividends 30 June
2005 2005
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Share Capital 11,390 11,390
Retained earnings 101,137 7,045 19,116 (6,365) 120,933
Capital reserve 23,122 (7,045) 16,077
Investment revaluation reserve 1,353 1,353
Hedging and translation reserve 1,406 4,923 6,329
Attributable to equity holders of the 138,408 4,923 19,116 (6,365) 156,082
parent
Minority interests 9,019 127 2,038 11,184
Total 147,427 - 5,050 21,154 (6,365) 167,266
For the year ended 31 December 2004
Total
Currency recognised
Balance at Transfer translation Income for the Balance at
1 January to 31 December
2004 reserves adjustment period Dividends 2004
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Share Capital 11,390 11,390
Retained earnings 76,360 (457) 31,599 (6,365) 101,137
Capital reserve 22,665 457 23,122
Investment revaluation reserve 1,353 1,353
Hedging and translation reserve - 1,406 1,406
Attributable to equity holders of the 111,768 1,406 31,599 (6,365) 138,408
parent
Minority interests 6,306 50 2,663 9,019
Total 118,074 - 1,456 34,262 (6,365) 147,427
For the six months ended 30 June 2004
Total
Balance at Transfer Currency recognised Balance at
1 January to translation Income for the 30 June
2004 reserves adjustment period
Dividends 2004
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Share Capital 11,390 11,390
Retained earnings 76,360 9,546 (5,658) 80,248
Capital reserve 22,665 22,665
Investment revaluation reserve 1,353 1,353
Hedging and translation reserve - (1,382) (1,382)
Attributable to equity holders of the 111,768 (1,382) 9,546 (5,658) 114,274
parent
Minority interests 6,306 17 620 6,943
Total 118,074 - (1,365) 10,166 (5,658) 121,217
Notes to the Interim Accounts
1 In respect of the six monthly results, which are based on unaudited reports
for management purposes.
(a) The figures are not the Company's statutory accounts.
(b) The auditors of the Company have not made any report thereon under section
90(2) of the Bermuda Companies Act.
(c) For accounting periods beginning on or after 1 January 2005, the Group is
required to prepare consolidated financial statements in accordance with
International Financial Reporting Standards ('IFRS') in place of UK GAAP. For
these purposes, IFRSs comprise the Standards and Interpretations issued by the
International Accounting Standards Board ('IASB') and Interpretations issued by
the International Financial Reporting Interpretations Committee ('IFRIC') that
have been, or are expected to be, endorsed by the European Union by 31 December
2005.
These interim financial statements, including all comparatives, have
been prepared using the accounting policies consistent with all IFRS Standards
and Interpretations published by 31 December 2004 which are mandatory for
accounting periods beginning on or after 1 January 2005. These interim financial
statements are covered by IFRS 1'First time adoption of International Financial
Reporting Standards' because they form part of the period included in the
Group's first IFRS financial statements for the year ended 31 December 2005. The
Group has applied the exemption not to comply fully with International
Accounting Standard 34 'Interim Financial Reporting'.
The accounting policies used in the preparation of these interim
financial statements are those set out in the news release 'Restatement of 2004
Results under International Financial Reporting Standards' published by the
company on the 11 October 2005 and available on the Company's website. The
figures to 31 December 2004 have been extracted from the 'Restatement of 2004
Results under International Financial Reporting Standards' and were subject to a
private audit opinion.
2 Taxation
Unaudited Unaudited Audited
six months to six months to year to
30 June 30 June 31 December
2005 2004 2004
US$'000 US$'000 US$'000
UK tax 392 - -
Overseas tax 6,305 7,031 13,926
6,697 7,031 13,926
3 Dividends
The interim dividend of 2.00 cents per share will be paid on the 30 November
2005, to shareholders on the register at close of business on 11 November 2005.
4 Reconciliation between UK GAAP and IFRS
Reconciliation of profit under UK GAAP to profit under IFRS
Unaudited Audited
six months year to
to 30 June 31 December
2004 2004
US$'000 US$'000
Profit under UK GAAP 7,996 25,583
Unrealised gains taken to the Income Statement 1,492 6,351
Adjustments to finance leases capitalised 666 1,826
Change in functional currency 337 822
Pre-operating expenses capitalised now expensed 73 131
Borrowing costs previously capitalised now expensed (133) (62)
Dry-docking expenditure capitalised (70) (80)
Reclassification of subsidiary as joint venture (195) (309)
Profit under IFRS 10,166 34.262
Reconciliation of shareholders equity under UK GAAP to shareholders equity under
IFRS
Unaudited Audited
six months year to
to 30 June 31 December
2004 2004
US$'000 US$'000
Total equity under UK GAAP 118,627 147,747
Dividend not recognised as liability until declared 707 6,365
Adjustments to finance leases capitalised 1,261 2,630
Dry-docking expenditure capitalised 1,412 1,403
Fair value of available for sale investment 1,550 1,100
Pre-operating expenses capitalised now expensed (297) (239)
Reclassification of subsidiary as joint venture (488) (691)
Borrowing costs previously capitalised now expensed (5,044) (4,973)
Change of functional currency 3,487 (5,916)
Total equity under IFRS 121,216 147,426
Additional copies of this announcement can be obtained from the Company's
registered office, Clarendon House, Church Street, Hamilton, Bermuda or from the
Company's UK transfer agent, Capita Registrars, The Registry, 34 Beckenham Road,
Kent BR3 4TU.
This information is provided by RNS
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Tuesday, 14th May 2024
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