Preliminary Results

RNS Number : 5564D

Ocean Wilsons Holdings Ld

31 March 2014

Ocean Wilsons Holdings Ltd

Preliminary results for the year ended 31 December 2013

Ocean Wilsons Holdings Limited today announces its preliminary results for the year ended 31 December 2013.

Highlights

· Reported sales up 8% to US$660.1 million (2012: US$610.4 Million)

· Operating profit up 40% to US$119.0 million (2012: US$ 84.7 million)

· Dividend declared of 60 cents per share (2012: 42 cents per share) up 43%

· Investment portfolio up US$11.3 million to US$249.0 million (2012: US$237.7 million)

· Operating cash flow of US$108.4 million (2012: US$110.1 million)

· Concluded Briclog acquisition in July 2013 for US$40.5 million

· Completion of second shipyard at Guarujá, Sao Paulo.

José Francisco Gouvêa Vieira, Chairman of Ocean Wilson's, said: "Ocean Wilsons delivered a good performance in 2013. Revenue for the full year grew 8% to US$660.1 million due to increased revenue from our shipyard, terminals and towage businesses. Operating profit at US$119.0 million was US$34.3 million higher reflecting the higher turnover, profit on the disposal of property plant and equipment and lower employee costs. Profit before tax at US$100.5 million was in line with 2012. The US$34.3 million increase in operating profit was partially offset by a US$19.0 million increase in exchange losses on monetary items, US$11.9 million increase in finance costs and reduced gains from the investment portfolio."

For further information:

Company Contact

Keith Middleton 001 441 295 1309

Media

David Haggie 020 7562 4444

Haggie Partners LLP

Ocean Wilsons Holdings Limited

Highlights

Reported sales up 8% to US$660.1 million (2012: US$610.4 million)

Operating profit up 40% to US$119.0 million (2012: US$84.7 million)

Dividend declared of 60 cents per share (2012: 42 cents per share) up 43%

Investment portfolio up US$11.3 million to US$249.0 million (2012: US$237.7 million)

Operating cash flow of US$108.4 million (2012: US$110.1 million)

Concluded Briclog acquisition in July 2013 for US$40.2 million

Completion of second shipyard at Guarujá, Sao Paulo

About Ocean Wilsons Holdings Limited

Ocean Wilsons Holdings Limited ("Ocean Wilsons" or the "Company") is a Bermuda based investment holding company, and, through its subsidiaries, operates a maritime services company in Brazil and holds a portfolio of international investments. The Company is listed on both the Bermuda Stock Exchange and the London Stock Exchange. It has two principal subsidiaries: Wilson Sons Limited and Ocean Wilsons Investments Limited (together with the Company and their subsidiaries, the "Group").

Wilson Sons Limited ("Wilson Sons") is an autonomous Bermuda company listed on the Sao Paulo Stock Exchange (BOVESPA) and Luxembourg Stock Exchange. Ocean Wilsons holds a 58.25% interest in Wilson Sons which is fully consolidated in the Group accounts with a 41.75% non-controlling interest. Wilson Sons is one of the largest providers of maritime services in Brazil. Wilson Sons activities include harbour and ocean towage, container terminal operation, offshore support services, logistics, small vessel construction and ship agency. Wilson Sons has over six thousand employees.

Ocean Wilsons Investments Limited is a wholly owned Bermuda investment company. The company holds a portfolio of international investments.

Objective

Ocean Wilsons Holdings Limited is run on a long-term basis. This applies to both the investment portfolio and our investment in Wilson Sons. The long-term view taken by the Board allows Wilson Sons to grow and develop its businesses without being pressured to produce short-term results at the expense of long-term value creation. The same long-term view allows our investment managers to make investment decisions that create long-term capital growth.

The success of this strategy is reflected in the growth in the Ocean Wilsons share price and total returns to shareholders. In the 10 years to 31 December 2013 the share price has risen 585% from 152p to 1,042p and total returns to shareholders in the period (assuming dividends are reinvested in Ocean Wilsons shares) of 806%.

Chairman's Statement

Introduction

Ocean Wilsons delivered a good performance in 2013.

Wilson Sons has progressed significantly during 2013, with our shipyard, terminal and offshore businesses completing key steps in their growth strategy. The year began with the successful completion of our second shipyard, Guarujá II, in Sao Paulo state. US$60 million was invested in the facility, doubling our shipbuilding capacity. The new 26-metre wide dry dock permits the construction of larger and more complex vessels as evidenced by our new contracts to build Oil Spill Recovery Vessels (OSRVs) and Remotely Operated Vehicle Support Vessels (ROVSVs).The new shipyard is also an important addition in maintaining and repairing our fleet of towage and offshore vessels.

Five new vessels were added to our operating fleet during the year: four new platform supply vessels (PSVs) and one new tugboat. Three of these PSVs were built at the Wilson Sons shipyard for our offshore joint venture, Wilson Sons Ultratug Offshore. With a top speed of thirteen knots, these vessels were specifically designed for operations in the pre-salt oil fields located over 300 kilometres from the Brazilian coast. Wilson Sons Ultratug Offshore now operates a fleet of eighteen PSVs and remains focused on expanding and developing its business. Our tugboat fleet remains the largest in Brazil with 63 tugboats operating in 26 ports.

Tecon Salvador successfully completed the first year of operation following the terminal expansion in 2012, moving a record 289,600 TEUs (Twenty-foot equivalent units) in the year, a 6% increase from 2012. The terminal benefited from a significant increase in import and cabotage volumes. In July Brasco completed the acquisition of Brazilian Intermodal Complex S/A ("Briclog"), an important step in expanding our capacity to offer onshore support base services to the offshore oil and gas industry. The demand for onshore support base services remains strong and the availability of suitable operating areas limited. Your Board believes the 30-year operating lease acquired will prove to be a valuable asset for the Group. In February, Wilson Sons Logistics inaugurated the Suape logistics centre in Pernambuco, an important step in developing our logistics operations in the North East of Brazil. The centre boasts a 23,000m² warehouse and a 25,000m² yard with direct access to the port of Suape and the surrounding area.

The investment portfolio continued to grow during the year adding US$16.3 million in value, a time weighted return of 7.7%. At 31 December 2013, the investment portfolio was US$249.0 million representing US$7.04 per share (2012: US$237.7 million and US$6.72 per share).

Group Results

Revenue for the full year grew 8% to US$660.1 million (2012: US$610.4 million) due to increased revenue from our shipyard, terminals and towage businesses.

Operating profit at US$119.0 million was US$34.3 million higher (2012: US$84.7 million) reflecting the higher turnover, profit on the disposal of property plant and equipmentand lower employee costs.

Profit before tax at US$100.5 million was in line with 2012 (US$98.6 million). The US$34.3 million increase in operating profit was partially offset by a US$19.0 million increase in exchange losses on monetary items, US$11.9 million increase in finance costs and reduced gains from the investment portfolio.

Higher deferred tax charges raised the income tax expense for the year to US$42.3 million from US$33.7 million in 2012.

Profit per share based on ordinary activities after taxation and non-controlling interests was 107.1 cents (2012: 116.7 cents).

Investment portfolio performance

Your Board reviews the performance of the investment portfolio over the longer-term and the longer-term performance remains solid. In the ten year period to 31 December 2013, the portfolio returned 106.3% against the performance benchmark of 52.7% and a MSCI cumulative world index of 99.5%.

At 31 December 2013 the trading investment portfolio and cash under management was US$249.0 million (2012: US$237.7 million). The investment portfolio added US$16.3 million in value during the year (after deducting expenses) representing a time weighted return of 7.7%. During the year, capital redemptions of US$5.0 million were paid to the parent company. Dividend income received by the portfolio increased 30% to US$5.2 million (2012: US$4.0 million).

The best performing portfolio segments in 2013 were global equities, which delivered an 11.4% return, and private assets, 6.7% return. Although global equities was our best performing segment, returns were adversely impacted by our over weighted exposure to emerging markets and natural resources which both performed poorly in the year. Emerging markets accounted for 37% and natural resources 10% of the portfolio net asset value at yearend.

Private assets are at a relatively immature stage of value realisation with approximately 80% allocated to post 2008 crisis investments. We are seeing some distributions from earlier investments with US$8.0 million in distributions received in the year and cumulative distributions received of US$20.2 million. Net cash flow to this segment for the year (US$3.6 million outflow) remained negative with US$11.6 million in capital drawdowns. At yearend outstanding capital commitments were US$44.5 million. As these investments mature, we are confident that over the full cycle they will generate valuable returns for the portfolio. To date African Development Partners, Greenspring Global Partners, China Harvest II and Capital International Private Equity Fund have all performed particularly strongly.

At yearend, the portfolio was invested in global equities, 62%, private assets 23%, 8% in market neutral funds and 7% in bonds and cash. The increased weighting of the portfolio in global equities (62% v 52% in 2012) is due to the outperformance of this asset class relative to the remainder of the portfolio in the year and additional investments made principally in JO Hambro Japan Fund, Hirzel Capital Fund, Blackrock European Hedge Fund and Odey Absolute Return Fund.

The net asset value per share at the end of December 2013 of the investment portfolio was US$7.04, a 4.8% increase over 2012 (US$6.72).

Investment managers

The Group's investment portfolio is held by Ocean Wilson Investments Limited ("OWIL") a wholly owned subsidiary registered in Bermuda. OWIL has appointed Hanseatic Asset Management LBG a Guernsey registered and regulated investment group as its investment manager. During 2013, Alec Letchfield joined the Hanseatic Asset Management Group and part of his remit is responsibility for managing the Ocean Wilsons' portfolio.

Investment management fee

The investment managers receive an investment management fee based on the valuation of the funds under management and an annual performance fee of 10% of the annual performance which exceeds the benchmark, provided that the high water mark has been exceeded. The investment management fee is an annual rate of 1% payable monthly in arrears. The performance fee is measured against an absolute benchmark derived from the one year USD LIBOR, prevailing at the commencement of each calendar year, plus 2%. In 2013 the investment management fee was US$2.4 million and no performance fee was payable.

Net asset value

At the close of business on the 31 December 2013, the Wilson Sons' share price was R$30.92, resulting in a market value for the Ocean Wilsons holding of 41,444,000 shares (58.25% of Wilson Sons) of approximately US$542.5 million which is the equivalent of US$15.34 (£9.27) per Ocean Wilsons Holdings Limited share.

Adding together the market value per share of Wilsons Sons, US$15.34 and the investment portfolio US$7.07 results in a net asset value per Ocean Wilsons Holdings Limited share of approximately US$22.41 (£13.53). The Ocean Wilsons Holdings Limited share price of £10.43 at 31 December 2013 represented an implied discount of 23%.

I am pleased to note the narrowing of the implied discount from 38% at last yearend to the current 23%. The implied discount has fluctuated significantly since the IPO in May 2007 but we do not seek to manage the discount, as we believe long-term shareholder value will best benefit from the continued strong performance of our underlying businesses.

Dividend

The Board is declaring a full year dividend of 60 cents per share (2012: 42 cents per share) to be paid on 6 June 2014, to shareholders of the Company as of the close of business on 9 May 2014. This represents a 43% increase over the 2012 full year dividend.

The dividend cost of US$21.2 million for the year represents the full dividend to be received from Wilson Sons relating to 2013 of US$15.7 million plus US$5.5 million in distributions from the investment portfolio.

The increased dividend to be received from Wilson Sons reflects their new dividend policy to increase dividend payments to shareholders. This revised policy follows completion of the current investment cycle in 2013 and an expected increase in free cash flow.

The Ocean Wilsons Holdings Limited dividend policy is to pay the Company's full dividend to be received from Wilson Sons in the period and a percentage of the average capital employed in the investment portfolio to be determined annually by the Board. Dividends are set in US Dollars and paid annually. In 2013, the Board decided going forward to no longer pay an interim dividend and combine the normal interim dividend payment of 4 cents a share into the final dividend. This change does not affect the total dividend paid in the year.

Shareholders receive dividends in Sterling by reference to the exchange rate applicable to the USD on the dividend record date, except for those shareholders who elect to receive dividends in USD.

The Board of Directors may review and amend the dividend policy from time to time in light of our future plans and other factors. The payment of dividends cannot be guaranteed and may be discontinued or varied at the discretion of the Board.

Briclog acquisition

In July we were pleased to announce that through our subsidiary Brasco Logística Offshore Limitada ("Brasco"), we concluded the acquisition of Briclog for R$89.8 million (US$40.2 million) with debt of R$32.1 million (US$14.5 million) assumed on acquisition. In the business acquired, the Group obtained a 30-year lease to operate an onshore base in Guanabara Bay, Rio de Janeiro, Brazil with excellent access to the Campos and Santos oil producing basins. The area has been renamed Brasco Cajú.

Brasco intends to phase investments in the expansion of Brasco Cajú by extending the existing berth a further 428m to 500m and reforming the site. Civil works on the expansion commenced in the second half of this year, which when completed will triple Brasco's capacity and consolidate Brasco's position as one of the largest offshore support base operators for the Oil and Gas industry in Brazil. Following completion of the civil works, up to six vessels will be able to dock at Brasco Cajú simultaneously.

Warehouse fire

A fire at our new shipyard warehouse in May destroyed large parts of our material inventory. Some delays were experienced to our vessel delivery schedule although components lost in the fire were substituted by items already included in our supply chain for future vessel construction. There were no injuries as a result of the fire and the Group holds insurance to cover the warehouse damage and materials inventory.

Brazilian port law

In June this year, the Brazilian congress approved a new law aimed at increasing private investment in Brazilian ports and improving efficiency.

Charitable donations

We are pleased to support a number of local causes in Brazil during the year. Group donations for charitable purposes amounted to US$156,000 (2012: US$113,000). The Group's principal contributions in 2013 were:

Escola de Gente - raising awareness and promoting social inclusion for all parts of the community. Located in Barra da Tijuca, Rio de Janeiro. http://www.escoladegente.org.br/

De Peito Aberto - Promotes social development through educational, cultural and sporting activities.

http://www.depeitoaberto.com.br/

Brigada Mirim ecologica - maintaining the ecology of Ilha Grande in the state of Rio de Janeiro and raising the awareness of visitors and the local population about the environment. http://www.brigadamirim.org.br/

Criando Laços - The Wilson Sons corporate programme 'Criando Laços" (Creating ties) provides financial support and promotes voluntary employee involvement in social initiatives. http://www.wilsonsons.com.br/

Health, safety and education

The safety of our workers is of utmost importance to us. The Group implemented the WS+ safety programme to promote improved safety throughout the Group through training of Company personnel and the promotion of a safety oriented environment and culture. In conjunction with DuPont, the programme was developed during 2010, before a pilot project was implemented at our shipyard in 2011, which was then replicated to other businesses across the Group. The objective is to have the project implemented across the entire Group by the end of 2014. This programme has received a positive response from our workforce and produced excellent results. Between January 2010 and August 2013, the Group registered a 64% decrease in the frequency of accidents requiring a leave of absence.

We continue to invest in the training and development of our staff. To meet the demand for labour at our new and existing shipyards, we set up an in-house training centre in collaboration with SENAI (Serviço Nacional de Aprendizagem Industrial) at our shipyard to train boilermakers, welders and painters. Since the end of 2012 the Group has trained almost 400 professionals. Graduating workers leave with a recognised trade qualification from SENAI permitting holders to work at shipyards throughout Brazil. Amongst our other training initiatives is a dedicated ship crew training facility in Guarujá that uses a state of the art simulator to further train ship captains and crew. In 2013 110 ship captains and 30 ship engineers completed courses at our facility.

Corporate governance

The Board has put in place corporate governance arrangements which it believes are appropriate for the operation of your Company. The Board has considered the principles and recommendations of the 2010 and 2012 UK Corporate Governance Code ("the Codes") issued by the Financial Reporting Council and decided to apply those aspects which are appropriate to the business. This reflects the fact that Ocean Wilsons Holdings Limited is an investment holding company incorporated by an act of parliament in Bermuda with significant operations in Brazil. The Company complies with the Code where it is beneficial for both its shareholders and its business to do so, and has done so throughout the year and up to the date of this report, but it does not fully comply with the Code. The areas where the Company does not comply with the Code, and an explanation of why we do not comply, are contained in the section on corporate governance in the Annual Report. The position is regularly reviewed and monitored by the Board.

Outlook

The Group enters 2014 in a strong position with an impressive and diversified range of businesses. Demand from the offshore oil and gas sector remains strong. Our shipyard business has a strong order book from both in-house projects and third party orders. During the year, we expect to deliver a further five new tugboats to our towage division as part of our fleet renewal programme. A further six vessels are forecast to be built in 2015 and 2016; all have financing from the Fundo da Marinha Mercante. Our offshore joint venture is programmed to receive one new PSV during the year and we expect to expand the fleet further in future years. Wilson Sons Ultratug is looking to diversify its fleet away from PSVs and operate Anchor Handling Tug Supply Vessels (AHTSs). We started civil works to extend the quay and reform the retro area at Brasco Cajú in 2013: this work will continue throughout 2014 and is forecast to be completed in the second quarter of 2015.

Global equity markets performed well in 2013. We remain confident that while the world economy will continue to recover from the financial crisis it will take time and growth will be uneven. Following a poor 2013, emerging equity markets performance may continue to suffer in the short term with lower economic growth and uncertainty about the effects of continued US tapering. However, emerging markets are better placed to withstand possible capital outflows than they were in previous crises and we remain positive on their long-term prospects.

Your board believes that the long-term outlook for the Group is strong.

Management and staff

On behalf of your Board and shareholders, I would like to thank our management and staff for their efforts and hard work during the year.

J F Gouvêa Vieira

Chairman

28 March 2014

FInancial Review

Revenue from Maritime Services

The Group has reported an 8% increase in maritime services revenue for the year to US$660.1 million (2012: US$610.4 million) principally due to increased revenue from our shipyard, terminals and towage businesses. Shipyard revenue increased 61% to US$ 100.3 million (2012: US$62.2 million) benefitting from the additional capacity available following completion of our new dry-dock facility in the fourth quarter of 2012. A fire at the new shipyard warehouse in May destroyed large parts of our material inventory causing some delays to our vessel delivery schedule and impacted margins in the year. Demand for new vessel construction from the offshore oil and gas industry remains robust. Revenue at our terminal business grew 6%, driven by strong demand for warehousing services, higher container volumes and better results from our offshore oil and gas support base, Brasco. Following a slow start to the year, Brasco recovered as the year progressed reflecting improved pricing plus higher waste management and tank cleaning operation revenues. Towage revenues increased 10% due to a greater number of towage manoeuvres, improved harbour towage sales mix and increased special operations revenue. Logistics revenue was 17% lower than prior year due to a higher average USD/BRL exchange rate used to convert revenue into our reporting currency, US Dollars and some lower margin contracts were concluded during 2012 and 2013. All Group revenue is derived from Wilson Sons operations in Brazil.

Operating profit

Operating profit grew 40% to US$119.0 million (2012: US$84.7 million) principally due to the higher turnover, profit on the disposal of property plant and equipment, US$10.0 million (2012: US$0.5 million loss) and lower employee expenses. The profit on the disposal of property, plant and equipment arises from the sale of surplus commercial real estate in downtown Rio de Janeiro and Sao Paulo as well as towage and logistic equipment. Employee expenses were US$13.5 million lower at US$209.5 million (2012: US$223.0 million) mainly due to lower social security costs and the positive impact of the share based payment expense. The lower social security costs for the year at US$33.1 million (2012: US$44.7 million) reflect a reduction in payroll tax rates at both our towage and shipyard businesses The share based payment expense in the period was a US$1.4 million credit, due to foreign exchange movements compared with a charge of US$2.3 million in the previous year, a difference of US$3.7 million. The reduction in employee expense is reflected in improved operating margins for the year of 16.5% which were 2.5% higher than 2012 (14%).

Raw materials and consumables used rose from US$72.2 million to US$94.3 million in the current year due principally to the increase in shipyard sales.

Depreciation and amortisation in the year increased 5% to US$58.7 million from US$55.9 million in 2012 because of the capital investment undertaken by the Group in recent years.

The 8% rise in other operating expenses from US$174.0 million to US$188.6 million in 2013 was mainly attributable to higher cost of sales as a result of the increased turnover and additional service costs relating to the conclusion of the Guarujá II shipyard and Tecon Salvador expansion.

Share of results of joint ventures

The share of results of joint ventures is Wilson Sons' 50% share of net profit for the period mainly from our offshore joint venture. From 1 January 2013, the joint venture is accounted for on an equity basis (see accounting policies below). Results at our joint venture improved due to increased revenue and operating profit from our expanded fleet as four new vessels entered operation during the year.

Investment revenue

Investment revenue for the year at US$17.8 million was in line with 2012, US$18.3 million. Higher dividends from equity investments US$5.2 million (2012: US$2.9 million) were offset by lower interest on bank deposits of US$11.9 million (2012: US$14.8 million)

Investment gains and losses

Other gains of US$13.7 million arose from the Group's portfolio of trading investments (2012: US$16.4 million).

Finance costs

Finance costs for the year at US$21.9 million were US$11.9 million higher than prior year (2012: US$9.9 million) due to exchange losses on foreign currency borrowings of US$9.6 million (2012: US$0.7 million gain) and higher interest on loans of US$11.6 million (2012: US$9.8 million) as a result of increased debt during the year.

Foreign exchange losses on monetary items

Exchange losses on monetary items of US$30.6 million (2012: US$11.6 million) arise from the Group's foreign currency monetary items and principally reflect the depreciation of the Brazilian Real against the US dollar during the period.

Exchange rates

The Group reports in US Dollars "USD" and has revenue, costs, assets and liabilities in both Brazilian Real "BRL" and USD. Therefore movements in the USD/BRL exchange rate can impact the Group both positively and negatively from year to year. During 2013 the BRL depreciated 15% against the USD from R$2.04 at 1 January 2012 to R$2.34 at the yearend.

The average USD/BRL exchange rate in the period was 10% higher at 2.16 (2012: 1.96). A higher average exchange rate adversely affects BRL denominated revenues and benefits BRL denominated costs when converted into our reporting currency the USD.

The principal effects from the depreciation of the BRL against the USD on the income statement are a net exchange loss on monetary items of US$30.6 million (2012: US$11.6 million) and a US$9.6 million net exchange loss on USD loans in BRL functional currency businesses (2012: US$0.7 million gain). A currency translation adjustment loss of US$4.1 million (2012: US$7.2 million) on the translation of operations with a functional currency other than USD is included in other comprehensive income and recognised directly in equity.

Accounting Policies

Adoption of new standards

In the current year, the Group adopted, amongst others, the revised IFRS 10 "Consolidated Financial Statements" and IFRS 11 "Joint Arrangements". As a result, the Group evaluated its consolidation conclusions in respect of its joint arrangements which resulted in changes to the way joint arrangements are accounted for with the comparative similarly adjusted for the new treatment. The principal change under the new standards is that the Group's offshore joint ventures, which were previously proportionally consolidated on a line-by-line basis, are now accounted for using the equity method of accounting with a single line item in the Income Statement and Balance Sheet to reflect the Group's 50% participation. Allink, a 50% controlled Non-Vessel Operating Common Carrier ("NVOCC") which was previously proportionally consolidated on a line by line basis is now consolidated 100% in the Consolidated Financial Statements, with the 50% non-controlling interest identified separately from the Group's equity.

Change in accounting policy

Foreign exchange gains and losses arising from the Group's foreign currency monetary items (cash, debtor, creditor balances and inventory) have previously been allocated to revenues, costs and financial results in the income statement based on estimated ratios. To improve transparency and readability of the financial statements the Group will no longer allocate these foreign exchange gains and losses but report them in one line in the income statement, "Foreign exchange gain/(loss) on monetary items". The presentation of prior year comparatives has been restated to reflect this change. Reporting of other foreign exchange impacts relating to the currency translation account, deferred tax and loans will not change as a result of this new treatment. There is no impact on the Company's Balance Sheet or Net Profit.

The impact of the adoption of these new standards and change in accounting policy are set out in note 2 to the accounts.

Profit before tax

Profit before tax at US$100.5 million was US$2.0 million higher than prior year, US$98.6 million. The US$34.3 million increase in operating profit was partially offset by the US$19.0 million increase in exchange losses on monetary items, US$11.9 million increase in finance costs and reduced gains from the investment portfolio, US$2.7 million lower.

Taxation

Income tax expense for the year was US$ 8.6 million higher at US$42.3 million (2012: US$33.7 million). Within this figure current taxation charges were in line with 2012 at US$33.6 million (2012: US$35.6 million), while deferred tax charges increased US$11.7million to US$8.7 million (2012: US$3.0 million credit). The increase in the deferred tax charge is mainly because the Group recognised a deferred tax asset in the prior year of US$8.1 million in respect of unused tax losses from prior periods and a higher deferred tax charge in 2013 compared to 2012 arising on the retranslation of non-current asset values.

The unused tax losses were recognised in 2012 as there are now associated foreseeable future taxable profit streams. The deferred tax charge arising on the retranslation of non-current asset values is caused by the depreciation of the BRL against the USD at year end and reflects the difference between the historical USD denominated property plant and equipment balances recorded in the Group's accounts and the BRL denominated property plant and equipment balances used in the Group's Brazilian tax calculations. The increased charge in 2013 is mainly because the BRL depreciated 15% against the USD in 2013 compared with a 9% devaluation in 2012.

The US$42.3 million tax charge represents an effective tax rate for the period of 42% (2012: 34%). The corporate tax rate prevailing in Brazil is 34%.

Profit for the year

Profit attributable to equity holders of the parent is US$37.9 million after deducting profit attributable to non-controlling interests of US$20.4 million.

Earnings per share

Basic earnings per share for the year were 107.1 cents (2012: 116.7 cents).

Cash flow

Net cash inflow from operations for the year at US$108.4 million was in line with prior year US$110.1 million. Adverse working capital movements offset the higher operating profit for the period.

Capital expenditure of US$106.1 million in the year was mainly invested in towage vessel construction, the expansion of Tecon Salvador and the associated empty container depot. (2012: US$103.1 million). Following completion of the current investment cycle, Wilson Sons anticipate annual capital expenditure to normalise over the next three years at approximately US$100 million on organic growth and capital maintenance.

Capital expenditure was partially financed by new loans raised in the period of US$50.8 million (2012: US$48.9 million) Capital repayments of US$36.8 million (2012: US$30.0 million) were made on existing loans in the year in accordance with debt repayment schedules.

At 31 December 2013 the Group had US$106.5 million in cash and cash equivalents (2012: US$136.7 million). Included in the Group's trading investments of US$278.0 million at 31 December 2013 is US$33.0 million (2012: US$20 million) in USD denominated fixed rate certificates held by Wilson Sons Limited. These investments are not part of the Group's investment portfolio managed by Hanseatic Asset Management LBG and are intended to fund Wilson Sons Limited operations in Brazil.

Balance sheet

At 31 December 2013 the equity attributable to equity holders of the parent company was US$552.0 million, an increase of US$20.1 million from 2012 (US$531.9 million) due principally to profits in the period of US$37.9 million, less dividends paid of US$13.4 million, a negative currency translation adjustment of US$2.0 million and employee benefits recognised in equity of US$1.6 million. The currency translation adjustment arises from exchange differences on the translation of operations with a functional currency other than USD. On a per share basis net equity is the equivalent of US$15.61 per share (31 December 2012: US$15.04 per share).

Net debt and financing

All debt at yearend is held in the Wilson Sons Limited Group and has no recourse to the parent company, Ocean Wilsons Holdings Limited, or the investment portfolio held by Ocean Wilsons Investments Limited.

At 31 December 2013, The Group had net debt of US$272.2 million (2012: US$227.0 million):

	2013	2012	2011
	US$ millions	US$ millions	US$ millions
Debt
Short term	(39.5)	(36.7)	(29.0)
Long term	(339.2)	(327.0)	(307.8)
Total debt	(378.7)	(363.7)	(336.8)

Cash and cash equivalents*	139.5	156.7	113.6
Net debt	(239.2)	(207.0)	(223.2)

*Included in cash and cash equivalents are short-term investments in Wilson Sons Limited which are intended to fund Wilson Sons Limited operations in Brazil

The Group's borrowings are used principally to finance vessel construction and the development of our terminal business with defined repayment schedules repayable over different periods up to 18 years. The Group's main sources of financing are the Fundo da Marinha Mercante, a Brazilian Government fund dedicated to funding vessel construction in Brazil and the International Finance Corporation. At 31 December 2013, 90% of our debt is non-current with 51% due within 5 years. 92% of our borrowings are USD denominated or linked to the USD with a favourable weighted average interest rate of 3.05%.

The Group's reported borrowings do not include US$250.9 million of debt from the Company's 50% share of borrowings in our Offshore Vessels joint venture.

Keith Middleton

Finance Director

Wilson Sons Limited

The Wilson Sons 2013 Earnings Report released on 28 March 2014 is available on the Wilson Sons Limited website: www.wilsonsons.com.br

In it Cezar Baião, CEO of Operations in Brazil said:

"The significant growth in EBITDA this year was a natural reflection of the US$1 billion invested since our IPO in 2007 by our business lines and consequently, the development of Brazilian port and maritime infrastructure.

This investment included an additional of 900,000 TEU of capacity in our two Container Terminals, the Brasco-Cajú (Briclog) terminal to support the Upstream Oil & Gas industry, doubling the activity of shipbuilding at the Guarujá Shipyard and delivery of 39 vessels for the operating fleets of the Company, being 16 PSVs and 23 azimuthal tugboats. The conclusion of these projects, and many others of great importance, puts us on a new level of service excellence for the benefit of our clients, staff and other stakeholders.

With the continued growth of the Company's cash flow, we are proposing to the Annual General Meeting, dividends of US$27 million, an increase of 50% over the previous year.

The Wilson Sons Strategy is to:

Continue to grow and expand the quantity and range of our services in all of the segments in which we operate.

Expansion of our operations in port terminals. In order to meet growing international trade demand, we have expanded our two container terminals. In Rio Grande do Sul, we built a third berth and commissioned ship to shore (STS) and rubber tyred gantry (RTG) cranes. In Salvador, we expanded our terminal and invested in yard equipment including RTGs and STSs. Where opportunities arise, we will also seek new concessions in other Brazilian ports and focus on developing new terminals. We will evaluate these potential investments in light of our existing operations, and their ability to provide a strong return on shareholders equity.

Increasing capacity of our Upstream Oil and Gas Support Terminals (Brasco). We are developing a continuous 500 metres of berth in the Brasco-Caju (Briclog) base with excellent access to the Campos and Santos oil producing basins. When completed this will triple Brasco's capacity to attend offshore support vessels and consolidate Brasco's position as one of the largest offshore support base operators for the Oil and Gas industry in Brazil. We are continuously monitoring offshore operations along the Brazilian coast to meet the demand for such services and create additional support bases in order to increase our coverage area.

Strengthening our position as the leading provider of towage services in the Brazilian market. We intend to continue to modernize and maintain our fleet of tugboats in order to provide consistently high-quality service to our customers and consolidate our leading position in the Brazilian towage services market. We regularly review our fleet deployment to optimize efficiency, and to seek out new niches in the market where we may be able to provide additional services. Consistent with our focus on operating on a national scale, we seek to increase our geographical footprint of towage services to ports in Brazil where we currently do not provide services.

Maximising potential of our expanded shipyard facilities and future projects through a mix of in-house and third-party vessel construction, as well as providing repair, maintenance and dry docking services to meet the demand of national and international oil and gas companies operating in Brazil.

Continuing to expand services to offshore oil and natural gas platforms. Using our knowledge and experience we intend to continue expanding our activities to maintain our position amongst the leading suppliers of services to the offshore oil and gas industry in Brazil. In addition to the supply vessels Wilson Sons Ultratug currently operates for Petrobrás, we plan to aggressively bid to provide supply vessels to other international and local oil companies. We will also seek opportunities to diversify our portfolio of equipment and services.

Exploring new opportunities and strategies to provide the best and most complete set of services to our customers. We are always looking to provide new and innovative services to our customers, and to anticipate their needs. We intend to continue our strategy with shipping companies in order to provide a complete set of local and international trade-related services across a nationwide network. We also seek to make these services more efficient and cost-effective, in order to maintain our strong customer base and strengthen our relationships with those customers.

Increasing economies of scale and productivity, realization of potential synergies and cost savings across our business segments. We continuously seek to optimize our operations and productivity and reduce our costs through synergies and the exchange of know-how among our businesses and administrative areas. We are and will continue to be focused on integrating similar activities in order to realize savings in administrative and back-office areas, especially in our branch offices. We seek to achieve economies of scale and reduce costs wherever possible. We demand that the managers of our different divisions continually develop new strategies that may improve our operations and explore new businesses.

Health, Safety and the Environment are a priority for the execution of our overall strategy of sustainable ethical business. We continue programmes to promote best practice safety throughout the Group through training of our personnel and the promotion of a safety oriented environment and culture.

Investment portfolio

Investment Objective

The Investment Objective is to achieve real returns through long-term capital growth, whilst emphasising preservation of capital. Investment views are expressed through an unconstrained globally diversified portfolio, without regard to short-term moves in equity markets or any benchmark allocation. An individual opportunity is considered on the contribution that the investment's expected return would make to the overall portfolio set against the potential impact of a permanent loss of capital.

Performance is measured against an absolute benchmark of one-year US Dollar LIBOR (prevailing on 1 January each year) plus 2%. This benchmark reflects the portfolio's long-term time horizon and unconstrained mandate where there is no compulsion to invest in any specific asset class or geographic region. Moreover, the Investment Manager is more concerned about absolute loss of capital rather than any short-term underperformance versus an index.

Investment Policy

The Investment Manager will seek to achieve the Investment Objective through investments in publically quoted and private (unquoted) assets across four 'silos': public equities, private assets (predominantly private equity), market neutral funds and bonds. Cash levels will be managed to meet future commitments (e.g. to private assets), whilst maintaining an appropriate balance for opportunistic investments.

Commensurate with the long-term horizon, it is expected that the majority of investments will be concentrated in equity, across both 'public' and 'private' markets. In most cases, investments will be made either through collective funds or limited partnership vehicles, working alongside expert managers in specialised sectors or markets to access the best opportunities.

The Investment Manager maintains a global network to find the best opportunities across the four silos worldwide. The portfolio contains a high level of investments which would not normally be readily accessible to investors without similar resources. Furthermore, a large number of holdings are closed to new investors. There is currently no gearing although the Board would, under the appropriate circumstances, be open-minded to modest levels of gearing. Likewise, the Board may, from time to time, permit the Investment Manager to opportunistically use derivative instruments (such as index hedges using call and put options) to actively protect the portfolio.

Investment Process

Manager selection is central to the successful management of the investment portfolio. Potential individual investments are considered based on their risk-adjusted expected returns in the context of the portfolio as a whole.

Initial meetings are usually a result of: (i) a 'top-down' led search for exposure to a certain geography or sector, (ii) referrals from the Investment Manager's global network or (iii) relationships from sell-side institutions and other introducers. The Investment Manager reviews numerous investment opportunities each year, favouring active specialist managers who can demonstrate an ability to add value over the longer-term, often combining a conviction-based approach, an unconstrained mandate and the willingness to take unconventional decisions (e.g. investing according to conviction and not fear of short-term underperformance versus an index).

Excessive size is often an impediment to continued outperformance and the bias is therefore towards managers who are prepared to restrict their assets under management to a level deemed appropriate for the underlying opportunity set. Track records are important but transparency is an equally important consideration. Alignment of interest is essential and the Investment Manager will always seek to invest on the best possible terms. Subjective factors are also important in the decision making process - these qualitative considerations would include an assessment of the integrity, skill and motivation of a fund manager.

When the Investment Manager believes there is a potential fit, thorough due diligence is performed to verify the manager's background and identify the principal risks. The due diligence process would typically include visiting the manager in their office (in whichever country it may be located), onsite visits to prospective portfolio companies, taking multiple references and seeking a legal opinion on all relevant documentation.

All investments are reviewed on a regular basis to monitor the on-going compatibility with the portfolio, together with any 'red flags' such as signs of 'style drift', personnel changes or lack of focus. Whilst the Investment Manager is looking to cultivate long term partnerships, every potential repeat investment with an existing manager is assessed as if it were a new relationship.

Portfolio Characteristics

The portfolio has several similarities to the 'endowment model'. These similarities include an emphasis on generating real returns, a perpetual time horizon and broad diversification, whilst avoiding asset classes with low expected returns (such as government bonds in the current environment). This diversification is designed to make the portfolio less vulnerable to permanent loss of capital through inflation, adverse interest rate fluctuations and currency devaluation and to take advantage of market and business cycles. The Investment Manager believes that outsized returns can be generated from investments in illiquid asset classes (such as private equity). In comparison to public markets, the pricing of assets in private markets is less efficient and the outperformance of superior managers is more pronounced.

Investment Managers Report

Hanseatic Asset Management LBG, the manager of the Group's investment portfolio report as follows:

MARKET BACKGROUND

2013 was characterised by a mostly positive market environment, with a broadly linear appreciation of the major equity indices. This owed much to the perception of steadily improving macroeconomic conditions as well as (in the near term at least) a continuation of supportive monetary policy. In addition to the improving US macroeconomic environment, risk markets were buoyed by an improved outlook for the Japanese economy, the perception of reduced political risk within the Eurozone, the diminished likelihood of foreign military involvement in Syria and a thawing of relations with Iran. Furthermore, investors were able to look past both sequestration in January and the US government shutdown in September with minimal impact on financial markets.

The summer saw a temporary jump in volatility, as investors reacted to Ben Bernanke's comments in his testimony to Congress on 21 May, which implied a "tapering" in the Federal Reserve's $85bn monthly bond purchase programme as early as September 2013. These concerns prompted a sharp rise in bond yields, which in turn triggered a liquidity withdrawal from Emerging Markets and commodities.

Emerging Markets suffered a pronounced sell-off during the summer, owing to a combination of factors, including the potential tightening in US monetary policy, a slowdown in Chinese economic growth and a sharp increase in Chinese inter-bank lending rates. There was a dispersion of returns in Emerging Markets, with those countries that have current account and budget deficits, such as India, South Africa, Turkey and Indonesia, badly impacted as foreign capital began to exit in anticipation of tightening global liquidation conditions.

One notable absentee from the list of positive events during the year was the anticipated improvement in corporate earnings. Whilst balance sheets remain strong, companies failed to grow their earnings significantly, with the result that the entirety of the equity market performance was a result of a re-rating rather than earnings growth.

The MSCI All Country World Index rose 22.8% over the year. The US was a notable strong performer, with the MSCI North America Index rising 29.6%. The S&P 500 rose 32.4%, recording its best calendar year performance since 1997 and ending the year at an all-time high, whilst the Dow Jones Industrial Average increased 26.5%.

European equity markets shrugged off the ongoing structural issues within the Eurozone to record strong performance, with the MSCI Europe ex UK Index rising 27.6%, driven in large part by the performance of the German and French bourses, which rose 31.0% and 27.7% respectively. Unlike their US counterparts, however, the European market, as measured by the Euro Stoxx 50 Index, remains 30% below its level of 2007 and 40% below its peak in 2000.

Japanese stocks performed strongly, with the TOPIX rising 26.5% (54.4% in Yen terms), driven by Prime Minister Abe's drive to combat decades of deflation with an unprecedented programme of monetary stimulus. The stimulus led to a substantial fall in the Yen against the Dollar, which ended the year at ¥105 down from ¥87 at the start of the year.

Emerging Markets suffered throughout 2013, with the MSCI Emerging Markets Index falling 2.6%, with particularly weak performance from the Ibovespa (-26.8%). The Brazilian market's poor performance was in large part due to the performance of the Real, which weakened 13.2% against the US Dollar following two weak years in 2011 and 2012. Investors' appetite for Emerging Markets has fallen steadily over recent years, due to a moderating growth trajectory, as well as substantial structural and political obstacles to their continued expansion.

Fixed income markets saw a pronounced divergence in returns, with high yield and investment grade corporates generating positive returns of 7.3% and 0.4% respectively. Government bonds, as measured by the Barclays Capital Global Treasury Index, fell 4.3% (the first annual fall since 2009) with yields ending the year at 3.0% having fallen to 1.6% in May, as investors began to anticipate the eventual withdrawal of implicit central bank support for bond markets. In Emerging Markets, the JP Morgan Emerging Markets Bond Index (US denominated sovereign / quasi-sovereign bonds) performed poorly, falling 6.6%, whilst local currency bonds performed even worse, falling 9.0%.

There were substantial falls across the commodity complex, due to a combination of over-supply following several years of substantial investment in new extraction projects as well as a more depressed demand environment as the rampant Emerging Market growth of the last decade has decelerated. Gold was the weakest of the commodities, falling 28.0%, and finishing the year 37.8% off its 2011 high at $1,201. The price of copper fell 8.0% whilst iron ore fell 7.0%. Energy markets were more mixed, with WTI Cushing rising 7.2% and European Brent falling 1.0% ending the year at $98 and $110 respectively.

Notes: (i) All index performance numbers are in US Dollar terms, unless specifically stated in local currency terms.

(ii) See following pages for further details on index returns over various periods.

Portfolio Construction

The net asset value at the end of December 2013 was $249.0m. The portfolio is comprised of four 'sub-portfolios' as detailed below:

Sub-Portfolio	$m	% NAV
Global Equities	153.4	61.6
Private Assets	57.5	23.1
Market Neutral Funds	20.0	8.0
Bonds / Other	18.1	7.3
Total	$249.0m	100.0%

1) 'Global Equities' is comprised of holdings that are sensitive to stock market movements and may take the form of 'long-only' or 'long / short' funds, as well as direct quoted equities. There is a strong bias towards fundamental, research-driven stock-pickers with a proven ability to produce attractive compounded returns.

2) 'Private Assets' contains fixed life investments typically with lives of approximately ten years and often structured through commitments to limited partnership vehicles that make investments in private equity, real assets (such as property and natural resources) and private debt.

These investments are driven by a 'bottom-up' analysis of the manager's value creation attributes, regardless of the prevailing economic climate. Managers dependent on financial engineering as a primary driver of returns are avoided. Moreover, it is essential that the manager provides more than capital to its portfolio companies - e.g. strong operational capabilities. Investments should be made into companies where there is a clearly defined exit route, which is not solely reliant on IPO markets.

By investing in Private Assets it is often possible to access differentiated opportunities and fast growing businesses that are not normally available through public markets. For example, many Emerging Market countries have relatively immature capital markets, which can make it difficult to access the most attractive sectors in the public markets at reasonable valuations. Furthermore, Private Assets often exhibit low correlation to public security markets and the phased drawdown of capital helps to reduce market timing risk.

· 25 commitments (totalling $107.8m) have been made as at 31 December 2013.

· $72.2m has been drawn down.

· Outstanding commitments of $44.5m (the majority of which will be drawn down over the next five years) are covered by cash and investments in market neutral funds. In addition, based on conservative estimates, distributions from the current private assets portfolio should enable this sub-portfolio to become self-funding.

· To date, cumulative distributions received total $20.2m.

3) 'Market Neutral Funds' contains generally lower volatility investments in a small number of funds that engage in a variety of trading strategies across asset classes. Each market neutral fund has a different investment mandate and it is expected that their collective performance will not be dependent on the direction of global security markets. What they have in common is a focus on generating positive absolute returns while providing downside protection in volatile markets.

In addition, Market Neutral Funds act as a secondary backstop to cash in covering long-term capital commitments (thus helping to avoid excessive cash drag - especially in the current environment of near-zero interest rates) and other opportunistic investments. In short, the Investment Manager believes that they provide a better risk/reward allocation than other investments that are perceived to be 'lower risk' such as government bonds.

4) 'Bonds / Other' - Bonds are comprised of two constituents: (i) Investment Grade Bonds and (ii) High Yield Bonds. Returns may be generated from rising capital value and coupons as well as currency exposure.

Investment Grade Bonds (0% of NAV) would contain investments in sovereign (government) bonds as well as corporate bonds with high credit ratings (typically at least 'BBB' as defined by Standard & Poor's).

High Yield Bonds $14.1m, (5.7% of NAV) include investments in Emerging Market (sovereign and corporate debt) and other Developed Market high yield corporate debt.

'Other' is comprised of cash valued at $4.0m (1.6% of NAV).

CUMULATIVE PORTFOLIO RETURNS

	1 Year	3 Year	5 Year	10 Year
Portfolio Performance	7.7%	6.2%	38.2%	106.3%
Performance Benchmark	2.8%	9.0%	16.8%	52.7%
MSCI World (Developed) Index	26.7%	38.6%	101.4%	96.3%
MSCI Emerging Markets Index	(2.6%)	(6.5%)	99.3%	188.3%
MSCI All Country World Index	22.8%	32.0%	100.2%	99.5%

2013 RETURNS

Performance	2013
(Time-weighted)	2013
Portfolio Performance	7.7%
MSCI World (Developed) Index	26.7%
MSCI All Country World Index	22.8%
MSCI Emerging Markets Index	(2.6%)
Performance Benchmark*	2.8%

* Note: Performance is measured against an absolute benchmark of one-year US Dollar LIBOR (prevailing on 1 January each year) plus 2%.

Performance Commentary

See below performance breakdown of the four 'sub-portfolios' over (i) the fourth quarter (Q4) and (ii) the year ended 31 December 2013 (YTD):

Sub-Portfolio	Valuation	Weighting	Performance	Contribution	Performance	Contribution
31 December 2013	$m	%	Q4%	Q4 $m	YTD%	YTD $m
Global Equities	153.4	61.6	4.5	6.5	11.4	14.8
Private Assets	57.5	23.1	0.4	0.2	6.7	3.5
Market Neutral Funds	20.0	8.0	2.6	0.5	(2.3)	(0.5)
Bonds / Other	18.1	7.3	2.8	0.5	0.5	(0.0)
Total	$249.0m	100%	3.2%	$7.7m	7.7%	$17.8m

During 2013, the portfolio generated a time weighted return of +7.7%. This compares with a +2.8% gain for the Performance Benchmark and +22.8% for the MSCI All Country World Index.

2013 saw a divergence of performance across the portfolio's geographic exposures, with strong returns generated in Japan (+47.5%), Developed Europe ex UK (+25.0%) and North America (+21.4%). However, losses were generated by the portfolio's exposure to Latin America, Emerging Europe and the Middle East, which declined by 1.6%, 1.1% and 0.6% respectively. In addition the portfolio's exposure to Natural Resources was detrimental to performance, declining by 4.2%.

The largest contributors to the portfolio's performance were dominated by holdings exposed to Developed Market equities: Findlay Park America Fund +30.2%, Egerton European Dollar Fund +25.7%, Lansdowne Developed Markets Fund +33.1% and Instinct Dark Horse Fund +46.3%. In addition, a number of the portfolio's private asset holdings performed strongly, with Africa Development Partners I +37.2% and Greenspring Global Partners IV +28.1%.

At the other end, the weakest performances came from holdings in the Emerging Markets and Natural Resources: BSF Mining Opportunities Fund -27.7%, BlackRock World Mining Trust -15.8%, Atlantis China Fund -18.1%, Avigo SME Fund III -19.1% and Gramercy EMD Allocation Fund -9.4%.

In aggregate, holdings in Market Neutral Funds recorded a loss of 2.3%, due to the disappointing performance of one holding, QFR Victoria (-13.3%), which has subsequently been redeemed.

Private Assets (23.1% of net asset value) - the underlying limited partnerships are showing increasing visibility on their potential for value creation and the Investment Manager remains confident that the significant capital deployed into post-crisis vintages represent an attractive store of future value. During 2013, the portfolio received distributions of $8.0m (the largest inflows being $2.2m from Gramercy Distressed Opportunities Fund Ltd) against drawdowns of $11.6m (the largest outflows being $1.7m to Gramercy Distressed Opportunity Fund II, LP followed by $1.2m to NG Capital Partners II, LP).

2013 PERFORMANCE BY SILO			%

Cash			(0.5)
Bonds			1.9
Market Neutral			(2.3)
Global Equities			11.4
Private Assets			6.7

The top contributors were:

Top Five Contributors (in USD)	Contribution	Performance	Gain
	%	% / X	$m
Findlay Park American Fund	1.7	30.2%	4.0
Egerton European Dollar Fund	1.1	25.7%	2.6
Lansdowne Developed Markets Fund	1.1	33.1%	2.5
Instinct Dark Horse Fund	1.0	46.3%	2.4
African Development Partners I, LLC *⁽ⁱ⁾	0.7	1.5x	1.7
Total	5.6		13.2

*Notes:

(i) Performance for Private Assets Investments is measured as a multiple (since inception of the investment) based on the following equation: Cash Multiple = (Profit / Loss + Drawn Capital) / Drawn Capital (since inception not for the period) where Profit / Loss = (Investment Value + Distributions) - (Initial Costs + Taxes).

PORTFOLIO ACTIVITY - for the year ended 31 December 2013

During 2013, there were total purchases of $29.8m, including purchases of new positions totalling $16.0m and total sales of $28.9m.

Within the portfolio's private assets silo, there were new commitments made of $22.7m and drawdowns of $11.6m. During 2013, investments in private assets generated distributions of $8.0m.

Purchases

New Positions
Hirzel Capital Fund				6.0
BlackRock European Hedge Fund				5.0
Odey Absolute Return Fund				5.0
Additions to Existing Investments
JO Hambro Japan Fund				7.5
NTAsian Discovery Fund				2.0
Prusik Asian Smaller Companies Fund				2.0
Phaunos Timber Fund Ltd				1.8
Prince Street Opportunities Fund				0.5
Total				29.8

Hirzel Capital Fund - research driven long/short hedge fund manager investing in US companies, with an emphasis on mid-caps. This Fund is currently closed to new investors.

BlackRock European Hedge Fund - is a European (including UK) long / short equities hedge fund. Reduced fees were negotiated. This Fund is currently closed to new investors.

Odey Absolute Return Fund - is a Developed Market long / short equities hedge fund.

Sales

There were sales totalling $28.9m in 2013.

Private Assets - Commitments

There were five new commitments to private assets in 2013:

New Commitments	$m
Navegar I, LP	5.0
NG Capital Partners II, LP	5.0
L Capital Asia 2, LP	5.0
KKR Special Situations Fund, LP	4.5
Silver Lake Partners IV, LP	3.2
Total	22.7

Navegar I, LP will make minority growth capital investments in private companies operating in the Philippines. The country has seen considerable economic and political progress, which provides a solid backdrop for investment in the Philippines. The young population is a central driver to the country's projected multi-year growth and offers a powerful tailwind for local consumer businesses.

NG Capital Partners II, LP will make control investments in private companies operating in Peru. In many respects, Peru is a catch-up story as it traces the economic path of Chile. The investment case is supported by a strong Peruvian economy, which remains at an early stage of its development. In particular, businesses engaged in the provision of goods and services to the emerging consumer are expected to exhibit strong growth.

L Capital Asia 2, LP (sponsored by LVMH Group, the French luxury conglomerate) will be a continuation of the strategy of L Capital Asia's predecessor fund, investing in businesses that are direct beneficiaries of discretionary consumer spending in Asia with a focus on the 'Aspirational, Affordable and Alternative' market segment. The manager will target investment opportunities primarily in Greater China, Southeast Asia and India, and on a more opportunistic basis, businesses in developed Asia (e.g. Australia, South Korea and Japan), particularly where such businesses may benefit from expansion into Emerging Asia. The Fund is expected to make between 12 and 15 growth equity investments. .

KKR Special Situations Fund, LP - will invest across the capital structure with a credit orientation, with the focus primarily being on corporate opportunities where balance sheet distress or broader market dislocation has created mispricing of assets. The manager expects to invest approximately two-thirds of the Fund's assets in Europe, with the remainder being invested in the US, Asia and Australia. The Fund is expected to make 20-25 core investments, which will be supplemented with a number of toe-hold positions.

Silver Lake Partners IV, LP will invest globally in businesses operating in the technology, technology-enabled and technology-related sectors. The manager will take both minority and control positions. Typical investments will be in large market leading companies with strong growth characteristics.

INVESTMENT PORTFOLIO	Market Value $000	% of NAV	Primary Focus
at 31 December 2013	Market Value $000	% of NAV	Primary Focus
Findlay Park American Fund	17,156	6.9	US equities - long-only
Egerton European Dollar Fund	12,980	5.2	Europe / US equities - hedged
Lansdowne Developed Markets Fund	9,922	4.0	Europe / US equities - hedged
NTAsian Discovery Fund	9,728	3.9	Asia ex-Japan equities - long-only
Oaktree CM Value Opportunities Fund	9,338	3.7	US high yield corporate debt - hedged
AR New Asia Fund	8,498	3.4	Asia ex-Japan equities - long-only
JO Hambro Japan Fund	7,908	3.2	Japan equities - long-only
BlueCrest AllBlue Leveraged Feeder	7,739	3.1	Market Neutral - multi-strategy
Instinct Dark Horse Fund	7,712	3.1	Japan equities - hedged
BlackRock UK Emerging Companies HF	7,648	3.1	UK equities - hedged
Top 10 Holdings	98,629	39.6
BlueBay Macro Fund	7,118	2.9	Market Neutral - EM-biased macro
Prosperity Quest Fund	6,846	2.7	Russian equities - long-only
Schroder ISF Asian Total Return	6,523	2.6	Asia ex-Japan equities - long-only
Odey Absolute Return Fund	6,517	2.6	Europe / US equities - hedged
Hirzel Capital Fund	6,192	2.5	US equities - hedged
BlackRock European Hedge Fund	5,903	2.4	Europe equities - hedged
African Development Partners I, LLC	5,758	2.3	Private Assets - Africa
CCI Technology Partners II	5,688	2.3	Technology equities - hedged
China Harvest Fund II, LP	5,634	2.3	Private Assets - China
Artemis Global Energy Fund	5,551	2.2	Energy equities - long-only
Top 20 Holdings	160,359	64.4
Prince Street Opportunities Fund	5,147	2.1	Emerging Markets equities - long-only
Greenspring Global Partners IV, LP	5,145	2.1	Private Assets - US Venture Capital
QFR Victoria Fund	5,102	2.0	Market Neutral - EM-biased macro
Prusik Asian Smaller Companies Fund	4,995	2.0	Asia ex-Japan equities - long-only
BlueBay EM Corporate Alpha Fund	4,772	1.9	EM high yield corporate debt - hedged
Oaktree CM Principal Fund V, LP	4,129	1.7	Private Assets - US distressed debt
Helios Investors II, LP	3,769	1.5	Private Assets - Africa
R/C Global Energy and Power Fund IV, LP	3,672	1.5	Private Assets - Energy
Schroder ISF Global Energy Fund	3,620	1.4	Energy equities - long-only
L Capital Asia, LP	3,302	1.3	Private Assets - Asia (Consumer)
Top 30 Holdings	204,012	81.9

28 remaining holdings	40,958	16.5

Cash	4,013	1.6

MARKET OUTLOOK

2013 was a robust year for global stock-markets. Recovering economies and growing confidence saw investors ascribing higher ratings to many developed market equities despite the poor earnings backdrop. It was a classic recovery phase in the stock-market cycle. Underlying this performance, however, the scene is being set for a more challenging, muted phase of the cycle, albeit one which is ultimately positive.

One of the most notable features of markets in recent years has been the unprecedented levels of liquidity being injected by Central Banks. Through a combination of low interest rates and novel measures such as quantitative easing (QE), asset prices were forced up as this money percolated through the financial system. Unfortunately, markets required more and more money to be injected into the system amid a sense that the money was having less of an impact. Central Bankers' worst fears that the process of stopping QE would lead to a disorderly market decline were brought to the fore when Ben Bernanke, Chairman of the US Federal Reserve, raised the prospect of such an event in May of 2013. Government bond yields rose rapidly, risk assets sold off and emerging markets, in particular, were impacted as investors repatriated their money back to the developed world.

Subsequent to this, investors' nerves have been somewhat soothed by the promise of a period of prolonged low interest rates, enabling the US to start its programme of exiting QE. Whilst it is true that rates may well stay low for an extended period of time - it seems likely that Central Bankers will shift their focus from inflation to the broad employment picture - it seems clear that the tide is turning. Hence whilst liquidity undoubtedly remains very accommodative globally, markets are typically more concerned by the direction of travel and that direction has now changed. This has important implications for markets.

From a developed market perspective the progress in markets has been all about valuations being re-rated as liquidity dominated despite a backdrop of disappointing earnings. This has broadly increased market valuations to fair value (and even fully valued in the case of the US). This is fairly typical for this stage of the investment cycle but, importantly, it also means that further progress becomes increasingly dependent on improving profitability. Without such an improvement, markets will be pushed into expensive territory and become a sell. Typically this stage is also characterised by more volatility and opportunities for stock pickers, as those companies which disappoint are punished and those that exceed expectations are rewarded.

The outlook for emerging markets is much more nuanced. Whilst remaining believers in the long-term structural case for the ongoing development of the emerging economies, which should translate into strong equity market performance, we are sufficiently realistic to recognise that such processes are almost always interrupted by the occasional speed-bump. Undoubtedly we are going through such a process at present and the challenge as always is to determine the length and scale of the bump! Our suspicion is that the process will serve to bifurcate investor opinion between those structurally strong emerging markets and those suffering from deficits, poor governance, political uncertainty, pursuing growth at the expense of returns and an over-reliance on commodity exports. Valuations have been falling to reflect these challenges but it must be recognised that whilst they look attractive versus developed markets, historic trough valuations have been lower. In all likelihood we are not at the end of the process but remain acutely aware that such times often provide the greatest opportunities.

At the market level, the US is now at its 10 year price/earnings average but more expensive compared to many other global stock-markets. However, this reflects the uncanny ability for the US economy to surprise through productivity gains and entrepreneurship. Buoyed by this, and the likelihood that US oil and gas production will match or even exceed domestic demand, the manufacturing industry has undergone a renaissance and helped drive growth ahead. Assuming this feeds through to earnings growth, this should help sustain stock-market performance.

In contrast, Europe is still mired in structural concerns. Whilst the risk of a full scale collapse has been averted for now, there is still considerable work to be done in strengthening the banking sector, and in many of the Southern European economies despite the progress made to date. Unlike the US though, the valuation is lower and corporate profitability is still some way off its historic peak, resulting in a difficult landscape, albeit one which is likely to prove fruitful for the skilled stock-picker.

Japan, as is so often the case, is dancing to a rather different tune. Having finally grasped the nettle and acknowledged the need to address the deflationary pressure and structural challenges, it is implementing an aggressive quantitative easing programme (indeed larger than the US one on a relative basis). Unlike the US, however, the Japanese QE programme is expected to be sustained for some time and is being combined with other measures such as the introduction of Japanese Individual Savings Accounts and encouraging public pension plans to reduce bonds in favour of equities. We feel that the situation is likely to sustain equity market performance, albeit the jury is still out as to whether or not the long awaited structural changes will be successfully completed.

Linked to the emerging market debate is the outlook for commodities. Commodities experienced a prolonged period of strong demand as emerging markets, and China in particular, surprised the world with their growth and urbanisation aspirations. As is often the case, supply initially failed to keep up with this demand, resulting in a period of feverish investment and capital expenditure. Unfortunately these periods rarely end well and with the recent reduction in emerging market growth, coinciding with now excessive levels of investment and production, a period of retrenchment has been inevitable. At the company level, significant cuts in spending are now being made which should support the cash positions of the major firms but one has to suspect that the number of smaller miners will need to decline in the future.

In many ways our current view feels fairly consensual, which makes us slightly uncomfortable in light of our contrarian nature. Even so, this probably reflects the current mid-cycle positioning where it typically pays not to fight the consensus. It also has to be acknowledged that a market setback would not come as a surprise following such a prolonged period of strong market performance. We would view such an event as a buying opportunity.

Hanseatic Asset Management LBG March 2014

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2013

	Notes	Year to 31 December 2013 US$'000	Year to 31 December 2012 (restated - see note 2) US$'000
Revenue	3	660,106	610,354
Raw materials and consumables used		(94,330)	(72,207)
Employee benefits expense	6	(209,459)	(223,031)
Depreciation & amortisation expense	5	(58,674)	(55,897)
Other operating expenses		(188,569)	(173,951)
Profit/(loss) on disposal of property, plant and equipment		9,966	(534)
Operating profit		119,040	84,734
Share of results of joint venture		2,392	689
Investment revenue	7	17,838	18,255
Other gains and losses	8	13,684	16,394
Finance costs	9	(21,863)	(9,948)
Foreign exchange losses on monetary items		(30,589)	(11,572)
Profit before tax		100,502	98,552
Income tax expense	10	(42,216)	(33,671)
Profit for the year		58,286	64,881
Other comprehensive income:
Items that maybe reclassified subsequently to profit and loss
Employee benefits		(2,251)	-
Items that maybe reclassified subsequently to profit and loss Effective portion of changes in fair value of derivatives		(1,269)	-
Exchange differences arising on translation of foreign operations		(4,088)	(7,211)
Other comprehensive loss for the year		(7,608)	(7,211)
Total comprehensive income for the year		50,678	57,670
Profit for the period attributable to:
Equity holders of parent		37,873	41,264
Non-controlling interests		20,413	23,617
		58,286	64,881
Total comprehensive income for the period attributable to:
Equity holders of parent		34,580	37,269
Non-controlling interests		18,349	20,401
		52,929	57,670
Earnings per share
Basic and diluted	12	107.1c	116.7c

Consolidated Balance Sheet

as at 31 December 2013

	Notes	As at 31 December 2013 US$'000	As at 31 December 2012 (restated - see note 2) US$'000	As at 1 January 2012 (restated - see note 2) US$'000
Non-current assets
Goodwill	13	37,622	15,612	15,612
Other intangible assets	14	46,650	29,345	28,463
Property, plant and equipment	15	616,924	594,877	538,682
Deferred tax assets		30,099	29,647	29,507
Trade and other receivables		23,998	16,923	27,965
Investment in joint venture		2,577	27	7,661
Other non-current assets		10,209	9,210	8,429
		768,079	695,641	656,319
Current assets
Inventories		29,090	37,453	25,371
Trading investments		277,969	241,582	251,297
Trade and other receivables		150,819	199,486	160,553
Cash and cash equivalents		106,512	136,680	113,643
		564,390	615,201	550,864
Total assets		1,332,469	1,310,842	1,207,183
Current liabilities
Trade and other payables		(135,920)	(173,219)	(125,454)
Derivatives		(110)	-	-
Current tax liabilities		(210)	(3,234)	(3,545)
Obligations under finance leases		(1,547)	(1,234)	(3,804)
Bank overdrafts and loans	16	(37,997)	(35,497)	(25,185)
		(175,784)	(213,184)	(157,988)
Net current assets		388,606	402,017	392,876
Non-current liabilities
Trade and other payables		-	(1,134)	(2,471)
Bank loans	16	(334,394)	(324,138)	(304,586)
Derivatives		(1,130)	-	-
Employee Benefits		(2,251)	-	-
Deferred tax liabilities		(33,761)	(15,043)	(17,260)
Provisions		(10,262)	(10,966)	(13,378)
Obligations under finance leases		(4,812)	(2,809)	(3,293)
		(386,610)	(354,090)	(340,988)
Total liabilities		(562,394)	(567,274)	(498,976)
Net assets		770,075	743,568	708,207
Capital and reserves
Share capital		11,390	11,390	11,390
Retained earnings		505,922	482,799	453,205
Capital reserves		31,760	31,760	31,760
Translation and hedging reserve		3,128	5,966	9,831
Equity attributable to equity holders of the parent		552,200	531,915	506,186
Non-controlling interests		217,875	211,653	202,021
Total equity		770,075	743,568	708,207

Consolidated Statement of Changes in Equity

as at 31 December 2013

For the year ended 31 December 2012	Share capital US$'000	Retained earnings US$'000	Capital reserves US$'000	Hedging and Translation reserve US$'000	Attributable to equity holders of the parent US$'000	Non controlling interests US$'000	Total equity US$'000
As previously reported balance at 1 January 2012	11,390	453,205	31,760	9,831	506,186	200,570	706,756
Impact of new standards	-	-	-	-	-	1,451	1,451
Restated balance at 1 January 2012	11,390	453,205	31,760	9,831	506,186	202,021	708,207
Currency translation adjustment	-	-	-	(3,995)	(3,995)	(3,216)	(7,211)
Profit for the year	-	41,264	-	-	41,264	23,617	64,881
Total income and expense for the period	-	41,264	-	(3,995)	37,269	20,401	57,670
Dividends	-	(11,670)	-	-	(11,670)	(10,862)	(22,532)
Derivatives	-	-	-	130	130	93	223
Balance at 31 December 2012	11,390	482,799	31,760	5,966	531,915	211,653	743,568

For the year ended 31 December 2013
Balance at 1 January 2013	11,390	482,799	31,760	5,966	531,915	211,653	743,568
Currency translation adjustment	-	-	-	(2,024)	(2,024)	(2,064)	(4,088)
Employee benefits (note 38)	-	(1,312)	-	-	(1,312)	(939)	(2,251)
Effective portion of changes in fair value of derivatives	-	-	-	(684)	(684)	(585)	(1,269)
Profit for the year	-	37,873	-	-	37,873	20,413	58,286
Total income and expense for the period	-	36,561	-	(2,708)	33,853	16,825	50,678
Dividends	-	(13,438)	-	-	(13,438)	(10,510)	(23,948)
Derivatives	-	-	-	(130)	(130)	(93)	(223)
Balance at 31 December 2013	11,390	505,922	31,760	3,128	552,200	217,875	770,075

Share capital

The Group has one class of ordinary share which carries no right to fixed income.

Capital reserves

The capital reserves arise principally from transfers from revenue to capital reserves made in the Brazilian subsidiaries arising in the following circumstances:

(a) profits of the Brazilian subsidiaries and Brazilian holding company which in prior periods were required by law to be transferred to capital reserves and other profits not available for distribution; and

(b) Wilson Sons Limited bye-laws require the company to credit an amount equal to 5% of the company's net profit to a retained earnings account to be called legal reserve until such amount equals 20% of the Wilson Sons Limited share capital.

Hedging and translation reserve

The hedging and translation reserve arises from exchange differences on the translation of operations with a functional currency other than US Dollars and effective movements on hedging instruments.

Amounts in the statement of changes of equity are stated net of tax where applicable.

Consolidated Cash Flow Statement

for the year ended 31 December 2013

	Notes	Year to 31 December 2013 US$'000	Year to 31 December 2012 (restated - see note 2 US$'000



Net cash inflow from operating activities	18	108,416	110,091
Investing activities
Acquisition of Briclog less net of cash acquired	17	(10,153)	-
Interest received		9,938	9,564
Dividends received from trading investments		4,664	2,854
Proceeds on disposal of trading investments		53,701	134,624
Proceeds on disposal of property, plant and equipment		17,912	1,659
Purchase of property, plant and equipment		(106,148)	(103,155)
Purchase of intangible asset		(2,960)	(7,209)
Purchase of trading investments		(75,874)	(108,515)
Additional investment in joint venture		(4,000)	-
Net cash used in investing activities		(112,920)	(70,178)
Financing activities
Dividends paid	11	(13,438)	(11,670)
Dividends paid to non-controlling interests in subsidiary		(10,511)	(10,862)
Repayments of borrowings		(36,772)	(30,037)
Repayments of obligations under finance leases		(1,540)	(3,331)
New bank loans raised		50,752	48,925
Decrease in bank overdrafts		-	(132)
Derivative paid		(39)	-
Net cash from financing activities		(11,548)	(7,107)

Net decrease in cash and cash equivalents		(16,052)	32,806

Cash and cash equivalents at beginning of year		136,680	113,643

Effect of foreign exchange rate changes		(14,116)	(9,769)

Cash and cash equivalents at end of year		106,512	136,680

Notes to the Accounts

for the year ended 31 December 2013

1 General Information

The financial statements have been prepared on the historical cost basis except for the revaluation of financial investments. The accounting policies are consistent with those set out in the 2012 Group annual report except for new standards and interpretations adopted.

2 Significant accounting policies and critical accounting judgements

Basis of accounting

The financial information set out in this announcement does not constitute the Group's statutory financial statements for the years ended 31 December 2013 or 2012, but is derived from those accounts. The auditors have reported on those accounts and their reports were unqualified.

The Group closely monitors and manages its liquidity risk. The Group has considerable financial resources including US$106.5 million in cash and cash equivalents and the Groups borrowings have a long maturity profile. Based on the Group's cash forecasts and sensitivities run the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.

Whilst the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs

New standards and interpretations adopted

In the current year the Group implemented IFRS 10 and IFRS 11. IFRS 10 introduces a single control model to determine whether an investee should be consolidated. Under IFRS 11, the structure of joint arrangement, although still an important consideration, is no longer the main factor in determining the type of joint arrangement and therefore the related accounting. The Group's interest in a joint operation, which is an arrangement in which the parties have rights to the assets and obligations for the liabilities, will be accounted for on the basis of the Group's interest in those assets and liabilities. The Group's interest in a joint venture, which is an arrangement in which the parties have rights to the net assets, will be equity accounted.

The new standard applied by the Company includes the effect of recognising the profit / loss of Wilson Sons Ultratug Offshore and Atlantic Offshore S.A. on a single line in the Income Statement and the Balance Sheet to reflect Company's 50% participation rather than the previous treatment with proportional consolidation line by line. Additionally, Allink, the Company's 50% Non-Vessel Operating Common Carrier ("NVOCC"), which previously included only 50% share in both the Income Statement and the balance sheet, are now 100% consolidated in the financial statements, with a 50% non-controlling interest.

The principal impacts of the adoption of these new standards on the results for the year ended 31 December 2012 were a reduction in revenue of US$38.1 million, an increase in profit before tax of US$11.3 million and profit for the year of US$3.2 million. Non-current assets decreased by US$236.7m, net current assets increased by US$34.4 million and net assets by US$1.1 million. There was no change in equity attributable to equity holders of the parent or earnings per share. Cash flow from operating and financing activities decreased US$5.5m and US$54.9m respectively while net cash used in investing increased by US$59.5m.

3 Revenue

An analysis of the Group's revenue is as follows:

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Sales of services	559,825	548,575
Revenue from construction contracts	100,281	61,779
	660,106	610,354
Investment income (note 7)	17,838	18,255
	677,944	628,609

All revenue is derived from continuing operations.

4 Business and geographical segments

Business segments

Ocean Wilsons Holdings has two reportable segments: Maritime services and investments. The maritime services segment provides towage, port terminals, ship agency, offshore, logistics and shipyard services in Brazil. The investment segment holds a portfolio of international investments.

Segment information relating to these businesses is presented below.

For the year ended 31 December 2013

	Maritime Services Year ended 31 December 2013 US$'000	Investment Year ended 31 December 2013 US$'000	Unallocated Year ended 31 December 2013 US$'000	Consolidated Year ended 31 December 2013 US$'000
Revenue	660,106	-	-	660,106
Result
Segment result	124,080	(2,609)	(2,431)	119,040
Share of results of joint ventures	2,392	-	-	2,392
Investment revenue	12,621	5,217	-	17,838
Other gains and losses	-	13,684	-	13,684
Finance costs	(21,863)	-	-	(21,863)
Foreign exchange losses on monetary items	(31,018)	53	376	(30,589)
Profit before tax	86,212	16,345	(2,055)	100,502
Tax	(42,216)	-	-	(42,216)
Profit after tax	43,996	16,345	(2,055)	58,286
Other information
Capital additions	(136,947)	-	-	(136,947)
Depreciation and amortisation	(58,673)	-	(1)	(58,674)
Balance Sheet
Assets
Segment assets	1,079,017	249,971	3,481	1,332,469
Liabilities
Segment liabilities	(561,791)	(259)	(344)	(562,394)

For the year ended 31 December 2012

	Maritime Services Year ended 31 December 2012 (Restated) US$'000	Investment Year ended 31 December 2012 (Restated) US$'000	Unallocated Year ended 31 December 2012 (Restated) US$'000	Consolidated Year ended 31 December 2012 (Restated) US$'000
Revenue	610,354	-	-	610,354
Result
Segment result	90,287	(2,666)	(2,887)	84,734
Share of results of joint venture	689	-	-	689
Investment revenue	15,397	2,851	7	18,255
Other gains and losses	-	16,394	-	16,394
Finance costs	(9,948)	-	-	(9,948)
Foreign exchange losses on monetary items	(11,635)	(73)	136	(11,572)
Profit before tax	84,790	16,506	(2,744)	98,552
Tax	(33,671)	-	-	(33,671)
Profit after tax	51,119	16,506	(2,744)	64,881
Other information
Capital additions	(128,916)	-	(5)	(128,921)
Depreciation and amortisation	(55,896)	-	(1)	(55,897)
Balance Sheet
Assets
Segment assets	1,068,826	238,904	3,112	1,310,842
Liabilities
Segment liabilities	(566,592)	(320)	(362)	(567,274)

Finance costs and associated liabilities have been allocated to reporting segments where interest costs arise from loans used to finance the construction of fixed assets in that segment.

Geographical Segments

The Group's operations are located in Bermuda, Brazil, and Guernsey.

All of the Group's sales are derived in Brazil.

The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment and intangible assets, analysed by the geographical area in which the assets are located.

	Carrying amount of segment assets		Additions to property, plant and equipment and intangible assets
	31 December 2013 US$'000	31 December 2012 (Restated) US$'000	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Brazil	1,032,017	999,944	136,947	128,921
Bermuda	300,392	309,872	-	-
Other	60	1,026	-	-
	1,332,469	1,310,842	136,947	128,921

5 Profit for the year

Profit for the year has been arrived at after charging:

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Net foreign exchange losses		(10,885)
Depreciation of property, plant and equipment	52,372	50,639
Amortisation of intangible assets	6,302	5,258
Operating lease rentals	13,966	14,128
Auditor's remuneration for audit services (see below)	586	625
Non-executive directors emoluments	446	380
A more detailed analysis of auditor's remuneration is provided below:
Financial statement audit of group and subsidiaries	586	625
Other services	-	-
	586	625

6 Employee benefits expense

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Aggregate remuneration comprised:
Wages and salaries	176,308	174,656
Share based payment (credit)/expense	(1,430)	2,262
Social security costs	33,070	44,663
Other pension costs	1,511	1,450
	209,459	223,031

7 Investment revenue

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Interest on bank deposits	11,891	14,769
Dividends from equity investments	5,193	2,854
Other interest	754	632
	17,838	18,255

8 Other gains and losses

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Increase in fair value of trading investments held at year end	14,594	3,005
(Loss)/profit on disposal of trading investments	(910)	13,389
	13,684	16,394

Other gains and losses form part of the movement in trading investments as outlined in note 18.

9 Finance costs

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Interest on bank overdrafts and loans	11,572	9,791
Exchange loss/(gain) on foreign currency borrowings	9,576	(707)
Interest on obligations under finance leases	715	864
	21,863	9,948

Borrowing costs incurred on qualifying assets of US$1.5 million (2012: US$4.3 million) were capitalised in the year at an average interest rate of 3.05% (2012: 3.18%).

10 Taxation

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Current
Brazilian taxation
Corporation tax	23,610	26,416
Social contribution	9,898	10,231
Total current tax	33,508	36,647
Deferred tax
Credit for the year in respect of deferred tax liabilities	(10,448)	(3,288)
Charge for the year in respect of deferred tax assets	19,156	312
Total deferred tax	8,708	(2,976)
Total taxation	42,216	33,671

Brazilian corporation tax is calculated at 25% (2012: 25%) of the assessable profit for the year. Brazilian social contribution tax is calculated at 9% (2012: 9%) of the assessable profit for the year.

At the present time, no income, profit, capital or capital gains taxes are levied in Bermuda and accordingly, no provision for such taxes has been recorded by the company. In the event that such taxes are levied, the company has received an undertaking from the Bermuda Government exempting it from all such taxes until 31 March 2035.

The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Profit before tax	100,502	98,552
Tax at the standard Brazilian tax rate of 34% (2012: 34%)	34,171	33,508
Tax effect of expenses/income that are not included in determining taxable profit	11,976	2,091
Effect of different tax rates of subsidiaries operating in other jurisdictions	(3,931)	(1,928)
Tax expense and effective rate for the year	42,216	33,671
Effective rate for the year	42%	34%

The Group earns its profits primarily in Brazil. Therefore the tax rate used for tax on profit on ordinary activities is the standard rate in Brazil of 34%, consisting of corporation tax, 25% and social contribution 9%.

11 Dividends

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Amounts recognised as distributions to equity holders in the period:
Final dividend paid for the year ended 31 December 2012 of 38c (2011: 29c) per share	13,438	10,255
First interim dividend paid for the year ended 31 December 2013 of 0c per share (2012: 4.0c)	-	1,415
	13,438	11,670
Proposed final dividend for the year ended 31 December 2013 of 60c (2012:38c) per share	21,218	13,438

12 Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Earnings:
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent	37,873	41,264
Number of shares:
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share	35,363,040	35,363,040

13 Goodwill

	31 December 2013	31 December 2012	1 January 2012
	US$000	US$'000	US$'000

Cost and carrying amount attributed to:
Tecon Rio Grande	13,132	13,132	13,132
Tecon Salvador	2,480	2,480	2,480
Brazilian Intermodal Complex (Briclog)	22,010	-	-
Total	37,622	15,612	15,612

For the purposes of testing goodwill for impairment losses, the Group makes use its updated valuation model, for the relevant cash-generating units (Tecon Rio Grande and Tecon Salvador) derived from the most recent financial budget for the following year, extrapolates cash flows for the remaining life of the concession based on an estimated average growth rate of 6% annually, and a discount rate of 10.,07% (Dec 31, 2012: 10,07% and (Jan 1^st, 2012: 12%) for both business units. This rate does not exceed the average long-term historical growth rate for the relevant market. After testing goodwill as mentioned above, no impairment losses were recognised for the periods presented.

Briclog's goodwill arose from the acquisition of Briclog and is composed partly of expectation for future profitability and partially for deferred tax on intangibles. This goodwill´s historical value is equivalent to US$23.3 million, with negative foreign exchange impact of US$1.3 million due to the translation effect, on 31 December, 2013. The goodwill will be tested for impairment annually, details of the Briclog acquisition are shown in note 29.

The directors consider that no reasonable change in their assumptions regarding their goodwill impairment testing would result in impairment.

14 Other intangible fixed assets

	US$'000
Cost
At 1 January 2012 - (Restated)	39,041
Additions	7,209
Write off	(684)
Exchange differences	(1,510)
At 1 January 2013 - (Restated)	44,056
Additions	26,028
Acquired with acquisition of Briclog Write off	266 (30)
Exchange differences	(3,469)
At 31 December 2013	66,851
Amortisation
At 1 January 2012 - (Restated)	10,578
Charge for the year	5,258
Write off	(627)
Exchange differences	(498)
At 1 January 2013 - (Restated)	14,711
Acquired with acquisition of Briclog Charge for the year	206 6,302
Write off	(23)
Exchange differences	(995)
At 31 December 2013	20,201
Carrying amount
31 December 2013	46,650
31 December 2012 - (Restated)	29,345
1 January 2012 - (Restated)	28,463

Intangible fixed assets arose from (i) the acquisition of concession rights for the container and heavy cargo terminal in Salvador in 2000, and the Ponta Norte expansion at Tecon Salvador in 2010 (ii) and the implementation of integrated management software (SAP) (iii) the Briclog acquisition in 2013.

The breakdown of intangibles by type is as follows:

	31 December 2013	31 December 2012	1 January 2012
	US$'000	(Restated) US$'000	(Restated) US$'000

Briclog	21,454	-	-
Tecon Salvador	9,263	11,509	13,509
Computer software	7,613	9,724	6,774
Other	8,320	8,112	8,180
Total	46,650	29,345	28,463

The additions in Intangible asset for the period is attributable mainly to the 30-year lease right to operate, arisen from the Briclog acquisition as mentioned in the Note 22.

Lease concessions are amortised over the remaining terms of the concessions at the time of acquisition which for Tecon Salvador, is 25 years and Ponta Norte is 15 years. The computer software is amortised over 5 years following completion of the installation.

15 Property, plant and equipment

	Land and buildings US$'000	Floating Craft US$'000	Vehicles, plant and equipment US$'000	Assets under construction US$'000	Total US$'000
Cost or valuation
At 1 January 2012 - (Restated)	213,951	296,644	232,621	2,667	745,883
Additions	68,049	3,474	23,240	26,952	121,715
Transfers	15	13,743	(15)	(13,743)	-
Exchange differences	(8,482)	-	(7,040)	-	(15,522)
Disposals	(1,174)	-	(5,315)	-	(6,489)
At 1 January 2013 - (Restated)	272,359	313,861	243,491	15,876	845,587
Additions	38,153	7,197	30.234	19,091	94,675
Additions - Briclog	12,687	-	3,291	-	15,978
Transfers	(5,033)	11,913	5,033	(11,913)	-
Exchange differences	(16,663)	-	(14,108)	-	(30,771)
Disposals	(2,006)	(11,809)	(16,282)	-	(30,097)
At 31 December 2013	299,497	321,162	251,659	23,054	895,372
Accumulated depreciation and impairment
At 1 January 2012 - (Restated)	34,972	98,783	73,446	-	207,201
Charge for the year	12,759	14,350	23,530	-	50,639
Elimination on construction contracts	-	2,628	-	-	2,628
Exchange differences	(1,254)	-	(4,151)	-	(5,405)
Disposals	(545)	(3)	(3,805)	-	(4,353)
At 1 January 2013 - (Restated)	45,932	115,758	89,020	-	250,710
Charge for the year	17,584	11,523	23,265	-	52,372
Additions - Briclog	530	-	1,489	-	2,019
Elimination on construction contracts	-	3,744	-		3,744
Exchange differences	(3,188)	-	(6,015)	-	(9,203)
Disposals	(649)	(11,355)	(9,190)	-	(21,194)
At 31 December 2013	60,209	119,670	98,569	-	278,448
Carrying Amount
At 31 December 2013	239,288	201,492	153,090	23,054	616,924
At 31 December 2012 - (Restated)	226,427	198,103	154,471	15,876	594,877
At 1 January 2012 - (Restated)	178,979	197,861	159,175	2,667	538,682

The carrying amount of the Group's vehicles, plant and equipment includes an amount of US$22.3 million (2012: US$20.5 million) in respect of assets held under finance leases.

Land and buildings with a net book value of US$0.2 million (2012: US$0.2 million) and tugs with a value of US$2.0 million (2012: US$2.2 million) have been given in guarantee of various legal processes.

The Group has pledged assets having a carrying amount of approximately US$234.1 million (2012: US$588.6 million) to secure loans granted to the Group.

At 31 December 2013, the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to US$5.5 million (2012: US$15.8 million).

16 Bank loans and overdrafts

		31 December 2013	31 December 2012	1 January 2012
			(Restated)	(Restated)
	Interest rate -%	US$'000	US$'000	US$'000

Unsecured borrowings
Bank overdrafts - Real	12.4% p.a.	-	-	132

Total unsecured borrowings		-	-	132

Secured borrowings
BNDES - FINAME Real ¹	3.0% to 12.00% p.a.	10,366	19,401	30,591
BNDES - FMM linked to US Dollar ²	2.07% to 6% p.a.	214,826	213,999	198,827
BNDES - FMM Real ²	9.71% p.a.	3,247	3,994	4,540
BNDES - FINEM Real ³	6.76% - 6,89% p.a.	9,849	3,604	-
BNDES - linked to US Dollar ³	5.07% to 5.36% p.a.	11,591	13,821	15,447

Total BNDES		249,879	254,819	249,405

BB - FMM linked to US Dollar ⁴	2.00% to 3.00% p.a.	24,387	-	-
IFC - US Dollar ⁵IFC - linked to Real ⁵	3.14% p.a.	75,296	77,606	57,208
BB - FMM linked to US Dollar⁴	14.09% p.a.	1,738	2,655	3,618
China Eximbank - US Dollar⁶	2.19% p.a.	11,563	13,686	15,769
Itaú - Finimp - US Dollar⁷	2.02% to 4.30% p.a.	9,528	10,605	3,152
Caterpillar - Supplier´s Credit Real	4.41% to 7.44% p.a.	-	264	487

Total others		122,512	104,816	80,234

Total secured borrowings		372,391	359,635	329,639

Total		372,391	359,635	329,771

1. FINAME credit line, through a variety of financial agents, finances Logistics and Port Operation equipment.

2. As an agent of Fundo da Marinha Mercante's (FMM), Banco Nacional De Desenvolvimento Economico e Social (BNDES) finances the construction of tugboats and shipyard facilities

3. Through FINEM credit line, BNDES is also financing improvements in Tecon Rio Grande, modernisation of support bases of Brasco in Niterói and Guaxindiba, Logistics equipment, implementation of Wilport's yard and enlargement of the container storehouse in Salvador Depot. The debt amount is repayable over different periods up to 18 years.

4. Banco do Brasil ("BB") as a Fundo da Marinha Mercante's (FMM) agent, finances the construction of tugboats. The contract shall be repaid in 18 years starting in March 2015, with monthly amortisation and interest payment.

5. International Finance Corporation (IFC) finances projects in container terminal -Tecon Salvador. The amortisation and interest payment are semi-annual.

6. The Export-Import Bank of China (Eximbank) finances Tecon Rio Grande's equipment acquisition. As per loan agreement principal shall be repaid in 9 years (5.1 years on 31 December, 2013), with semi-annual amortisation and interest payment. There is a 2.0% p.a. guarantee fee paid to Banco Itaú BBA.

7. Banco Itaú BBA S.A finances Tecon Rio Grande's equipment acquisition through an Import Finance Facility ("FINIMP"). As per loan agreement principal shall be repaid in 5.5 years (1.1 years on 31 December, 2013) with semi-annual amortisation and interest payment. The other loan was signed on 6 January 2012. As per loan agreement principal shall be repaid in 5 years (3.0 years on 31 December, 2013) with semi-annual amortisation and interest payment.

The breakdown of bank overdrafts and loans by maturity is as follows:

	31 December 2013	31 December 2012	1 January 2012
		(Restated)	(Restated)
	US$'000	US$'000	US$'000

Within one year	37,997	35,497	25,185
In the second year	37,370	38,358	33,927
In the third to fifth years (including)	110,115	102,608	98,092
After five years	186,909	183,172	172,567
Total	372,391	359,635	329,771

Amounts due for settlement within 12 months	37,997	35,497	25,185
Amounts due for settlement after 12 months	334,394	324,138	304,586

The analysis of borrowings by currency is as follows:

		$Real
		linked to
	$Real	US Dollars	US Dollars	Total
	US$'000	US$'000	US$'000	US$'000

31 December 2013
Bank overdrafts	-	-	-	-
Bank loans	25,200	250,804	96,387	372,391
Total	25,200	250,804	96,387	372,391

31 December 2012 (Restated)
Bank overdrafts	-	-	-	-
Bank loans	29,919	227,820	101,896	359,635
Total	29,919	227,820	101,896	359,635

1 January 2012 (Restated)
Bank overdrafts	132	-	-	132
Bank loans	39,236	214,274	76,129	329,639
Total	39,368	214,274	76,129	329,771

Guarantees

Loans with BNDES rely on a corporate guarantee from Wilson Sons de Administração e Comércio Ltda. For some contracts, the corporate guarantee is additional to: (i) pledge of the respective financed tugboat or platform supply vessel, (ii) lien of logistics and port operations equipment financed.

Loans with BB rely on a corporate guarantee from Wilson, Sons de Administração e Comércio Ltda. and pledge of the respective financed tugboat.

The loans that Tecon Salvador holds with IFC are guaranteed by shares of Tecon Salvador, projects' cash flows, equipment and buildings.

The loan with "The Export-Import Bank of China" is guaranteed by a "Standby Letter of Credit" issued for Tecon Rio Grande by Banco Itaú BBA S.A., with the financing bank as beneficiary, as counter-guarantee, Tecon Rio Grande pledged the equipment funded by "The Export-Import Bank of China" to Banco Itaú BBA S.A.

Loan with Itaú BBA S.A. is guaranteed by the corporate guarantee from Wilson Sons de Administração e Comércio Ltda and the pledge of the respective financed equipment. One contract is additionally guaranteed by a promissory note.

Undrawn credit facilities

At 31 December, 2013, the Group had available US$218.5 million of undrawn borrowing facilities. For each disbursement, there is a set of precedent conditions that must be satisfied.

Fair value

Management estimates the fair value of the Group's borrowings as follows:

	31 December 2013	31 December 2012	1 January 2012
		(Restated)	(Restated)
	US$'000	US$'000	US$'000

Bank overdrafts	-	-	132
Bank loans
BNDES	249,879	254,819	249,405
BB	24,387	-	-
IFC	77,034	80,352	60,934
Eximbank	11,563	13,686	15,769
Finimp	9,528	10,605	3,152
Caterpillar	-	264	487
Total bank loans	372,391	359,726	329,747
Total	372,391	359,726	329,879

The weighted average interest rates paid were as follows:

	Year ended 2013	Year ended 2012
Bank loans in US$ and linked to the US$	3.2%	3.2%
Bank loans in $Real	7.9%	8.5%

At 31 December 2013, the Group had available US$218.5 million of undrawn committed borrowings facilities available. For each disbursement there are a set of conditions precedent that must be met (2012: US$500.5 million).

17 Acquisition of subsidiary

Business combinations

Brasco Logística Offshore Ltda ("Brasco"), completed the acquisition of all the shares representing the capital of Brazilian Intermodal Complex S/A ("Briclog"), concluding the acquisition on July 1, 2013. The closing price of the acquisition of shares was R$89.8 million (equivalent to US$40.5 million at the transaction date) with debt of R$32.1 million (equivalent to US$ 14.5 million at transaction date) assumed on acquisition these values were subsequently adjusted to R$89.2 million regarding the acquisition of shares (equivalent to US$40.2 million at the transaction date) with debt of R$32.7 million (equivalent to US$14.8 million at transaction date) due to an update on the commercial agreement.

The acquisition of shares is payable in three amounts, including R$10 million (equivalent to US$4.5 million at transaction date) paid in June, 2011, R$ 22.5 million (US$10.2 million at transaction date) paid on the closing and R$57.3 million (equivalent to US$25.9 million at transaction date) that will be paid 300 days from the closing adjusted for movement in the Brazilian index of consumer prices (IPCA) from the date of closing.

The major asset of the acquisition is a 30-year lease to operate in an area of Guanabara Bay, Rio de Janeiro, Brazil with excellent access to the Campos and Santos oil producing basins.

In the 6 month-period ended 31 December 2013, Briclog accrued revenues of US$3.9 million and profit of US$790,000. If the acquisition had occurred on 1 January, 2013, management estimates that revenue contribution would amount to US$ 11.0 million and the loss for the year would have been US$3.0 million. In determining these amounts, management considered that the provisional fair value adjustments, which arose on the acquisition date, would have been the same if the acquisition had occurred on 1 January 2013.

Included in the Group's accounts payable at 31 December, 2013 is US$25.5 million for amounts outstanding in relation to the purchase of Briclog.

Contingent consideration

There is no contingent consideration involved in the purchase agreement.

Identifiable assets acquired and liabilities assumed

			US$'000
Assets
Cash and cash equivalents			19
Trade and other receivables			434
Recoverable taxes			357
Other assets			274
Property, plant and equipment			13,990
Identifiable intangible assets			23,413
Total identifiable assets			38,487
Liabilities
Trade and other payables			6,156
Advances			1,785
Tax payable			3,580
Provisions for tax, labour and civil risks			1,036
Deferred tax on intangible assets			8,131
Other payables			844
Total identifiable liabilities			21,532

Total net identifiable assets			16,955
Goodwill for expected future profitability			23,272
Total consideration			40,227

Lease operations were recognized at fair value on the acquisition date

If any new information is obtained within one year from the date of purchase regarding facts and circumstances that existed at the acquisition date which indicate adjustments to the amounts described above or any additional provision that existed at the acquisition date ,the accounting for the acquisition will be reviewed

Goodwill and other intangible assets

Goodwill and other intangible assets recognised as a result of the acquisition are as follows:

Lease concession intangible asset

US$'000

23,353

(i)

Goodwill for expected future profitability

23,272

(ii)

46,625

(i) The intangible asset is attributable mainly to the 30-year lease to operate in a sheltered area of Guanabara Bay, Rio de Janeiro, Brazil with privileged access to attend the Campos and Santos oil producing basins and the fair value of the customer portfolio. The intangible asset calculation is supported by an independent expert valuation.

(ii) Goodwill is attributable to Briclog's expected future profitability and deferred tax on the lease concession intangible asset and is disclosed in the consolidated balance sheet and assessed for impairment (see note 13).

Acquisition costs

There are no material acquisition costs incurred by the Group including legal fees and due diligence costs.

18 Notes to the cash flow statement

	Year ended 31 December 2013 US$'000	Year ended 31 December 2012 (Restated) US$'000
Reconciliation from profit before tax to net cash from operating activities
Profit before tax	100,502	98,552
Share of results of joint venture	(2,392)	(689)
Investment revenues	(17,838)	(18,255)
Other gains and losses	(13,684)	(16,394)
Finance costs	21,863	9,948
Foreign exchange losses on monetary items	30,589	11,572
Operating profit	119,040	84,734
Adjustments for:
Depreciation of property, plant and equipment	52,372	50,639
Amortisation of intangible assets	6,302	5,258
Share based payment (credit)/expense	(1,430)	2,262
Gain on disposal of property, plant and equipment	(9,966)	534
Decrease in provisions	(2,528)	(2,412)
Operating cash flows before movements in working capital	163,790	141,015
Increase in inventories	(3,085)	(12,082)
Decrease/(increase) in receivables	62,154	(27,891)
(Decrease)/increase in payables	(73,194)	54,650
Increase in other non-current assets	(999)	(781)
Cash generated by operations	148,666	154,911
Income taxes paid	(27,306)	(31,921)
Interest paid	(12,944)	(12,899)
Net cash from operating activities	108,416	110,091

Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

Private investment funds

Wilson Sons Limited has investments in private investment funds that are consolidated in the financial statements as cash equivalents.

The Group has investments in a private investment fund called Hydrus Fixed Income Private Credit Investment Fund that are consolidated in these financial statements. This private investment fund comprises deposit certificates, financial notes and debentures, with final maturities ranging from January 2014 to January 2019. About 67.62% of the securities included in the portfolio of the Private Investment Fund have daily liquidity and are marked to fair value on a daily basis against current earnings. This private investment fund does not have significant financial obligations. Any financial obligations are limited to service fees to the asset management company employed to execute investment transactions, audit fees and other similar expenses.

Cash and cash equivalents held in Brazil amount to US$84.3 million (2012: US$110.5 million), (2011: US$106.1 million).

Cash equivalents are held for the purpose of meeting short-term cash commitments and not for cash investment purposes.

Additions to plant and equipment during the year amounting to US$4.2 million (2012: US$0.7 million) were financed by new finance leases.

Enquiries

Company Contact

Keith Middleton 1 441 295 1309

Media

David Haggie 020 7562 4444

Haggie Partners LLP

Cantor Fitzgerald Europe 020 7894 7000

Rick Thompson - Corporate Finance

David Banks - Corporate Broking

This information is provided by RNS

The company news service from the London Stock Exchange

END

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