Ocean Wilsons Regulatory News (OCN)

Ocean Wilsons Holdings Limited

Interim Management statement

Ocean Wilsons Holdings Limited (LSE:OCN) today announces its interim management statement in accordance with the UK Listing Authority's Disclosure and Transparency rules. 

Our Operations

Ocean Wilsons Holdings Limited ("Ocean Wilsons" or "the Group") is a Bermudian investment holding company, which through its subsidiaries controls a maritime services and logistics company in Brazil and holds a portfolio of international investments.

The CEO of operations in Brazil, Cezar Baiao stated:

"The Company once more generated a very strong operating cash flow and EBITDA, confirming the overall strength of our business portfolio, even in the current uncertain economic environment.

From the Company's IPO in 2007 through the beginning of 2014, Wilson Sons completed a large CAPEX cycle of USD 1.0 billion invested in the development of Brazilian infrastructure. Projects such as capacity expansion and new equipment in Tecon Rio Grande and Tecon Salvador, the doubling of Guarujá Shipyard capacity, and the construction and maintenance of our fleet of tugboats and offshore support vessels enabled us to increase service levels to our valuable clients. Given the completion of a large number of significant investments, we expect increased free cash generation going forward".

Financial Results

In the current year the Group has adopted IFRS 10 and 11. The main impact from the adoption of these standards is that the Group's share of results from our offshore joint venture, (Wilson Sons Ultratug Offshore) which were previously consolidated on a line-by-line basis are now reported in a single line in the income statement and balance sheet. While the impact on profit for the period attributable to equity holders of the parent, earnings per share and equity attributable to equity holders of the parent is neutral, the revenue line no longer includes the Group's share of the joint venture's revenue. The accounting treatment of our logistics joint venture, Allink, is also impacted following the adoption of these standards with Allink being 100% consolidated in the Group accounts with the non-controlling interest identified separately from the Group's equity. Previously 50% of Allink was consolidated. Comparative figures have been adjusted to reflect the change in accounting treatment.

All the Group's sales are derived from our Brazilian operations held through Wilson Sons Limited. Revenue at US$475.5 million for the nine months ended 30 September 2013 was US$30 million higher than the comparative period in 2012 (US$445.5 million) principally due to higher revenue from our shipyard and towage businesses. Shipyard revenue benefitted from our new dry-dock facility and strong order book almost doubling to US$65.8 million in 2013 from US$34.1 million for the comparative period in 2012. Towage revenue increased 10% due to higher demand for special operations and better sales mix in harbour towage. Revenue at our logistics business decreased due to a reduction in the number of dedicated operations as the logistics business focuses on assets where we have a competitive advantage such as bonded warehouses and logistic centres. Terminal revenue was marginally ahead of the comparative period in 2012.

Operating profit for the nine months ended 30 September 2013 at Wilson Sons Limited increased by US$24.5 million to US$88.0 million (2012: US$63.5 million) principally due to the increase in revenue, profit on the disposal of property, plant and equipment US$10.0 million (2012: US$27,000 loss) and lower employee benefits expense. Employee benefits expenses were positively impacted by a reduction in payroll tax rates at both our Towage and Shipyard businesses. Raw material costs grew driven by the increase in shipyard activity. Depreciation and amortisation was in line with prior year comparatives. Other operating expenses remained higher than prior year due to higher tug rental costs to attend increased demand as well as additional services expenses from our expanded shipyard and Tecon Salvador operation.

EBITDA for the period at Wilson Sons Limited was US$130.3 million (2012: US$105.4 million) reflecting the improved operating result.

Capital expenditure for the nine months to 30 September 2013 at US$103.5 million was US$9.7 million higher than 2012 (US$93.8 million) with US$44.0 million relating to the acquisition of the Briclog oil and gas support terminal. At 30 September 2013 Wilson Sons Limited borrowings (including obligations under finance leases) were US$375.8 million (31 December 2012: US$363.7 million) of which US$336.7 million is non-current. This does not include the Group's share of borrowings in the offshore joint venture of US$249.0 million.

Wilson Sons Limited announced today to the São Paulo Stock exchange and Luxembourg Stock Exchange their results for the nine months ended 30 September 2013. Their full announcement is available on the Wilson Sons website (www.wilsonsons.com.br) and at the Brazilian and Luxembourg websites.

Investment Portfolio

At 31 October 2013 the investment portfolio including cash under management amounted to US$243.6 million. The investment portfolio represents US$6.89 (£4.32) per Ocean Wilsons share.

Wilson Sons Limited valuation

At the close of business on 5 November 2013 the Wilsons Sons Limited share price was 28.40 Brazilian Reais, resulting in a market value for the Ocean Wilsons 58.25% holding in Wilson Sons Limited of approximately US$514 million, which is equivalent to US$14.54 (£9.12) per Ocean Wilsons share. 

Adding together the market value of Wilsons Sons and the investment portfolio results in a net asset value per Ocean Wilsons Holdings Limited share of approximately US$21.43 (GBP13.44). The Ocean Wilsons Holdings Limited share price of GBP 10.63 at 5 November 2013 represents an implied discount of 21%.

Outlook

Trading continues to be in line with performance in the year to date and historical seasonal trends.

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