17th Aug 2015 07:34
LONDON (Alliance News) - Ocean Wilsons Holdings Ltd on Monday warned that earnings face a hit if weakness in the Brazilian Real continues, as the company reported lower profit in the first half.
"If the continued weakness in the BRL is maintained at year end this will again negatively impact our bottom line earnings in the year," Ocean Wilsons said in a statement.
The real has depreciated about 8% against the dollar since June 30, the end of the first half of Ocean Wilsons' financial year.
The Bermuda-based investment company, which operates a maritime services company in Brazil through a subsidiary, said it made a USD38.9 million pretax profit in the first half, compared with USD57.6 million in the corresponding period the prior year.
Revenue was 10% lower at USD269.4 million, mainly due to lower port terminal and logistics revenue as a result of the value of the dollar against the real. Revenue was also hurt by a reduction in vessel turnarounds at the company's offshore oil and gas support base, Brasco, and the effect of its withdrawal from lower margin logistic contracts.
The company said it paid USD22.3 million in dividend to shareholders in the period, compared with USD21.2 million in the corresponding half the prior year. It stopped paying an interim dividend from 2013.
"Although the short-term outlook for the Brazilian economy continues to disappoint, we remain confident in the fundamental strengths and quality of our Brazilian business. The BRL has depreciated approximately 8% against the USD since the period end," the company said.
The real depreciated 17% in the period against the dollar.
Ocean Wilsons shares were down 0.4% at 832 pence on Monday morning.
By Samuel Agini; [email protected]; @samuelagini
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