Ocean Wilsons Regulatory News (OCN)

Ocean Wilsons Holdings Limited

Quarterly Update

Ocean Wilsons Holdings Limited (LSE:OCN) today announces its 3rd quarter update. 

Our Operations

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

The CEO of Wilson Sons Limited operations in Brazil, Cezar Baiao stated:

"The fragile macroeconomic environment which has existed during the current year has been characterised by exchange rate fluctuations, inflationary pressure and low GDP growth. Such a backdrop has required us to be both focussed and prudent in our approach.

The overall operating performance in the quarter has been strong and is testament to our robust business model, although our balance sheet position weakened due to the adverse impact of a weakening Brazilian Real. Highlights in the period include the growth of container terminal volumes arising from stronger demand, increased towage manoeuvres derived from the start of operations in the state of Pará and strong offshore vessel business performance.

Wilson Sons has a very long history and it is with this experience that we will build upon going forward. Our operating results once again reinforce the strength of the Company and gives us the belief that we continue to develop in the right direction."

Financial Results

All the Group's sales are derived from the operations of Wilson Sons Limited. Revenue for the third quarter increased by approximately 5% to US$177.2 million compared to the same period in 2013 (US$169.1 million). The improvement was principally due to the shipyard and towage businesses. Shipyard revenue for the quarter increased by US$14.9 million to US$38.2 million (2013: US$23.3 million) from increased third party activity. Towage and ship agency revenue of US$58.4 million saw a marginal improvement on the comparative period in 2013 (US$57.6 million), which was attributable to increased revenue from harbour towage offset by lower special operations and ship agency revenue. Harbour towage revenue increased due to a higher number of manoeuvres performed and a higher average deadweight of vessels attended. Port terminal and logistics revenue decreased by 9% to US$80.7 million (2013: US$88.2 million) with increased revenue from container terminals offset by lower logistics and Brasco revenue. Container terminal revenues increased mainly due to improvements in cabotage and exports in the period. Brasco revenue fell due to the ending of two support and exploration contracts in Salvador, state of Bahia. Revenue for the nine months ended 30 September 2014 of US$477.1 million was in line with the comparative period in 2013 (US$475.5 million).

Wilson Sons Limited's operating profit for the quarter of US$35.9 million was in line with 2013 (US$35.1 million). Raw material costs have increased by U$15.4 million to US$34.7 million (2013: US$19.3 million) which was primarily as a result of the increased third party vessel construction at our shipyard. Other operating expenses were US$9.4 million lower with less freight, rentals and outsourced services which was mainly due to the discontinuation of in-house logistics operations for clients, plus tax credits received in the period by the towage, shipyard and port terminals of US$4.6 million.

Employee expenses of US$50.4 million were comparable to 2013 (US$51.2 million) while depreciation and amortisation for the period of US$16.5 million was US$2.0 million higher than the comparative period in 2013 (US$14.5 million) due to the capital investment as stated below undertaken by the Group in recent years.

EBITDA for the third quarter of Wilson Sons Limited was US$52.4 million (2013: US$49.7 million).

Wilson Sons Limited's profit for the period was adversely impacted by the depreciation of the Brazilian Real against the US Dollar resulting in a net loss for the quarter of US$8.2 million (2013: US$19.7 million profit). The principal impacts on the income statement were a net exchange loss on monetary items of US$17.6 million (2013: US$5.7 million), exchange loss on foreign currency borrowings of US$7.2 million (2013: US$0.4 million) and net exchange loss on deferred tax of US$8.8 million (2013: US$0.7 million gain)

Capital expenditure for the nine months to 30 September 2014 was US$10.0 million higher than prior year of US$85.8 million (2013: US$75.8 million). Capital expenditure was mainly invested in the expansion of the Brasco-Caju oil and gas terminal, tugboat construction and civil works at Tecon Salvador to expand warehouse capacity. At 30 September 2014 Wilson Sons Limited borrowings (including obligations under finance leases) were US$388.7 million (31 December 2013: US$378.8 million) of which US$336.2 million are non-current. This does not include the Group's share of borrowings in the offshore joint venture of US$247.3 million (2013: US$250.9 million).

Wilson Sons Limited announced today to the São Paulo Stock exchange its results for the third quarter ended 30 September 2014. Their full announcement is available on the Wilson Sons website (www.wilsonsons.com.br) and at the Brazilian stock exchange website.

Investment Portfolio

At 31 October 2014 the investment portfolio including cash under management amounted to US$249.4 million (2013: US$249.0 million). The investment portfolio represents US$7.05 (£4.41) per Ocean Wilsons share.

Wilson Sons Limited valuation

At the close of business on 13 November 2014 the Wilsons Sons Limited share price was 33.50 Brazilian Reais, resulting in a market value for the Ocean Wilsons 58.25% holding in Wilson Sons Limited of approximately US$539.8 million, which is equivalent to US$15.26 (£9.72) per Ocean Wilsons share. 

Shareholders should be aware that in addition to Wilson Sons Limited and the investment portfolio, the Group has other assets and liabilities on its balance sheet. In the opinion of the Directors, the net impact of these items does not have a material effect on the valuation of the business.

Outlook

Trading continues to be in line with performance in the year to date and historical seasonal trends. Currency movements may still adversely impact the Group's year-end balance sheet and profit for the year.

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