13th Nov 2007 15:49
Ocean Wilsons Holdings Ld13 November 2007 Ocean Wilsons Holdings Limited Today our principal operating subsidiary, Wilson Sons Limited announced to theBrazilian and Luxembourg Stock Exchanges the results of the Company and itssubsidiary companies for the nine months ending 30 September 2007. November 12, 2007 - Wilson Sons Limited (Bovespa: WSON11), through itssubsidiaries in Brazil, is one of the largest integrated operators of port andmaritime logistics in the Brazilian market, with 170 years of experience,offering a comprehensive line of services to participants in the internationalcommerce area, particularly in the port and shipping sector, with activitiesdivided into six operating segments: port terminals, towage, logistics, shippingagency, offshore and non-segmented activities - discloses the results of thethird quarter of 2007 (3Q07). The interim financial and operating information below, except as otherwiseindicated, is presented on a consolidated basis and in US dollars, in accordancewith the International Accounting Standards number 34 (IAS 34) related to theInterim Financial Information. Operating and Financial Highlights Net revenue of US$ 104.3 million in the 3Q07, an increase of 12.3% as comparedto the US$ 92.9 million recorded in the 3Q06; Operating Profit of US$ 26.3 million, 26.5% above the US$ 20.8 million in the3Q06; EBITDA of US$ 30.8 million in the 3Q07, 28.9% above the US$ 23.9 millionrecorded in the 3Q06; Net income of US$ 19.2 million, 36.9% above the US$ 14.0 million in the 3Q06; The full announcement is available on the Wilson Sons website(www.wilsonsons.com.br) and the Brazilian and Luxembourg Stock Exchangewebsites. Wilson Sons Limited and Subsidiaries Condensed Consolidated Financial Statements for the Nine-Month Periodsended September 30, 2007 and 2006 and Report of Independent Auditors Deloitte Touche Tohmatsu Auditores Independentes AUDITORS' REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS To Shareholders and ManagementWilson Sons Limited and SubsidiariesHamilton, Bermuda Introduction We have reviewed the accompanying condensed consolidated balance sheet of WilsonSons Limited and subsidiaries ("the Group") as of September 30, 2007 and therelated condensed consolidated income statement for the three-month andnine-month periods ended September 30, 2007 and 2006, as well as the relatedcondensed and consolidated statements of changes in equity and cash flows forthe nine-month periods then ended, all expressed in United States Dollars.Management is responsible for the preparation and presentation of this interimfinancial information in accordance with International Accounting Standard No.34 ("IAS 34"), Interim Financial Reporting. Our responsibility is to express aconclusion on this interim financial information based on our reviews. Scope of Review We conducted our reviews in accordance with International Standard on ReviewEngagements 2410, Review of Interim Financial Information Performed by theIndependent Auditor of the Entity. A review of interim financial informationconsists of making inquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing and consequently does not enable us toobtain assurance that we would become aware of all significant matters thatmight be identified in an audit. Accordingly, we do not express an auditopinion. Conclusion Based on our reviews nothing has come to our attention that causes us to believethat the accompanying interim financial information is not prepared, in allmaterial respects, in accordance with International Accounting Standard No. 34(IAS 34), Interim Financial Reporting. We have previously audited the consolidated balance sheet of Wilson Sons Limitedand subsidiaries for the year ended 31 December 2006, presented here incondensed format for comparative purposes, and based on our audit, we issued anunqualified opinion thereon, dated March 5, 2007. Wilson Sons Limited and subsidiaries 2 Our reviews also comprehended the convenience translation of the presentationcurrency amounts (United States dollar) into Brazilian real amounts and, basedon our reviews nothing has come to our attention that causes us to believe thatsuch convenience translation has not been made in conformity with the basisstated in Note 2. The translation of the consolidated financial informationamounts into the Brazilian real has been made solely for the convenience ofreaders in Brazil. International Financial Reporting Standards vary in certain significant respectsfrom Brazilian accounting practices established by Brazilian Corporate Law andstandards issued by the Brazilian Securities Commission ("CVM"). The applicationof the latter would have affected the determination of stockholders' equity andfinancial position as of September 30, 2007 and December 31, 2006 and thedetermination of net income for the nine-month periods ended September 30, 2007and 2006 to the extent summarized in Note 23. DELOITTE TOUCHE TOHMATSUAuditores Independentes Rio de Janeiro, Brazil12 November 2007 WILSON SONS LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THENINE-MONTH PERIODS ENDED SEPTEMBER 30, 2007 AND 2006 (Amounts expressed in thousands, unless otherwise noted - Brazilian real amountsare the result of a Convenience Translation: See Notes 1 and 2) (UNAUDITED) 1. GENERAL INFORMATION Wilson Sons Limited (the "Group") is a Company incorporated in Bermuda under theCompanies Act 1981. The address of the register office is Clarendon House, 2Church Street, Hamilton, HM11, Bermuda. The Group is one of the largestproviders of integrated port and maritime logistics and supply chain solutionsin the Brazilian market. Throughout our 170 years operating in Brazil, we havedeveloped an extensive national network and provided a variety of servicesrelated to international trade, particularly in the port and maritime sectors.Our principal activities are divided into the following segments: operation ofports terminals, towage services, logistics, shipping assistance and support tooffshore oil and natural gas platforms. These condensed financial statements are presented in United States Dollarsbecause that is the currency of the primary economic environment in which theGroup operates. Amounts are also presented in the Brazilian real for theconvenience of readers, computed as disclosed in Note 2. 2. ACCOUNTING POLICIES The accounting policies and most significant judgments adopted by the Group'smanagement were not modified in relation to those presented in the consolidatedfinancial statements for the year ended December 31, 2006, disclosed on 26th ofApril 2007 in the Final Prospectus of the Public Offering for the Primary andSecondary Distribution of Certificates of Deposit representative of CommonShares of Wilson Sons Limited. Convenience translation The condensed financial statements, originally prepared in US Dollars, were alsotranslated to Brazilian Reais. For purposes of this translation, the PTAXexchange rates were used as of the closing dates of the consolidated financialstatements, as published by the Brazilian Central Bank. On September 30, 2007,December 31, 2006 and September 30, 2006, the applicable exchange rates wereR$1.8389, R$2.1380 e R$2.1742, respectively. The difference in these exchangerates, between each of the referred closing dates, generates translationvariances on the beginning balances of the amounts reported in the condensedfinancial statements as of the subsequent period end. The effect of suchdifferences was disclosed in the Condensed Consolidated Statement of Changes inEquity and respective notes as "Currency translation adjustment". Thistranslation was carried out with the sole purpose of providing the user of thecondensed financial statements with a view of the reported amounts expressed inthe currency of the country where the Group carries out its operations. 3. BUSINESS SEGMENTS Business segments For management purposes, the Group is separated currently into six operatingactivities; Towage, Port Terminals, Ship Agency, Offshore Support to the Oil &Gas industry, Logistics and Non-Segmented activities. These divisions are thebasis on which the Group reports its primary segment information. Segment information relating to these businesses is presented as follow: Port Ship Non segmentedSeptember 30, 2007 Towage terminals agency Offshore Logistics activities Elimination Consolidated(Three-month period US$ US$ US$ US$ US$ US$ US$ US$ending) Income statement Revenue 41,019 40,215 5,407 3,021 18,035 (3,338) 104,359 Inter-segment sales - - - - - 27,355 (27,355) - 41,019 40,215 5,407 3,021 18,035 24,017 (27,355) 104,359 Operating profit 14,697 11,936 2,417 623 1,153 (4,553) - 26,273Financial income - - - - - 2,232 - 2,232Financial expenses (921) (1,002) (1) (162) (12) (112) - (2,210) Income before taxes 13,776 10,934 2,416 461 1,141 (2,433) - 26,295Taxes - - - - - (7,083) - (7,083)Net income for the 13,776 10,934 2,416 461 1,141 (9,516) - 19,212quarter Other information: Acquisition of fixed (2,719) (5,312) (196) (15,856) (1,022) (111) - (25,216) assets Depreciation and (1,737) (1,908) (162) (599) (435) (258) - (5,099) amortization September 30, 2006(three-month periodending) Income statementRevenue 33,333 36,831 4,069 1,927 13,372 3,352 - 92,884Inter-segment sales - - - - - 11,467 (11,467) - 33,333 36,831 4,069 1,927 13,372 14,819 (11,467) 92,884 Operating profit 8,503 11,159 3,267 513 1,188 (3,860) - 20,770Financial income - - - - - (154) - (154)Financial expenses (317) (577) (4) (221) (421) (100) - (1,640)Income before taxes 8,186 10,582 3,263 292 767 (4,114) - 18,976Taxes - - - - - (4,947) - (4,947)Net income for the 8,186 10,582 3,263 292 767 (9,061) - 14,029quarter Other information: Acquisition of fixed (3,212) (984) (2) (6,528) (133) (1,536) - (12,395) assets Depreciation and (1,628) (1,475) (144) (595) (113) (488) - (4,443) amortization Non Port Ship segmentedSeptember 30, 2007 Towage terminals agency Offshore Logistics activities Elimination Consolidated(Nine-month period US$ US$ US$ US$ US$ US$ US$ US$ending) Income statementRevenue 105,657 107,124 15,176 7,636 47,321 4,116 287,030Inter-segment sales - - - - - 45,881 (45,881) - 105,657 107,124 15,176 7,636 47,321 49,997 (45,881) 287,030 Operating profit 32,583 30,231 5,552 1,004 2,927 (19,012) 53,285Financial income - - - - - 10,357 10,357Financial expenses (2,192) (2,357) (1) (628) (218) (222) - (5,618)Income before taxes 30,391 27,874 5,551 376 2,709 (8,877) 58,024Taxes - - - - - (17,588) - (17,588) Net income for the 30,391 27,874 5,551 376 2,709 (26,465) - 40,436period Other information:Acquisition of fixed (10,653) (13,990) (638) (25,088) (1,428) (578) (52,375)assetsDepreciation and (4,846) (4,731) (486) (1,914) (716) (694) (13,387)amortization September 30, 2006(Nine-month periodending) Income statementRevenue 85,912 89,843 14,633 6,684 35,506 10,572 - 243,150Inter-segment sales - - - - - 29,111 (29,111) - 85,912 89,843 14,633 6,684 35,506 39,683 (29,111) 243,150 Operating profit 21,774 22,947 6,097 776 2,394 (9,073) - 44,915Financial income - - - - - 7,421 - 7,421Loss on investment - - - - - (2,822) - (2,822)disposalFinancial expenses (1,493) (1,093) (8) (677) (574) (2,022) - (5,867) Income before taxes 20,281 21,854 6,089 99 1,820 (6,496) - 43,647Taxes - - - - - (12,621) - (12,621) Net income for the 20,281 21,854 6,089 99 1,820 (19,117) - 31,026period Other information:Acquisition of fixed (5,351) (8,849) (246) (14,660) (225) (1,740) (31,071)assetsDepreciation and (4,994) (4,136) (426) (1,387) (352) (686) (11,981)amortization September 30, 2007 Balance sheetAssetsSegment assets 111,587 142,643 7,002 64,610 13,543 180,899 - 520,284LiabilitiesSegment liabilities (75,606) (41,527) 914 (59,157) (5,785) (34,265) - (215,426) December 31, 2006Balance sheetAssetsSegment assets 103,133 132,893 8,158 43,063 11,173 28,465 - 326,885LiabilitiesSegment liabilities (63,886) (46,268) (7,434) (42,039) (3,548) (18,710) - (181,885) Non Port Ship segmented Towage terminals Agency Offshore Logistics activities Elimination Consolidated R$ R$ R$ R$ R$ R$ R$ R$September 30, 2007(Three-month periodending)Income statementRevenue 75,431 73,952 9,943 5,555 33,165 (6,140) - 191,906Inter-segment sales - - - - - 50,303 (50,303) - 75,431 73,952 9,943 5,555 33,165 44,163 (50,303) 191,906 Operating profit 27,025 21,948 4,446 1,147 2,120 (8,373) - 48,313Financial income - - - - - 4,104 4,104Financial expenses (1,693) (1,843) (2) (298) (22) (206) - (4,064)Income before taxes 25,332 20,105 4,444 849 2,098 (4,475) 48,353Taxes - - - - - (13,025) - (13,025)Net income for the 25,332 20,105 4,444 849 2,098 (17,500) - 35,328quarter Other information:Acquisition of fixed (5,000) (9,768) (360) (29,158) (1,879) (204) (46,369)assetsDepreciation and (3,194) (3,509) (298) (1,102) (800) (474) (9,377)amortization September 30, 2006(Three-month periodending) Income statementRevenue 72,473 80,078 8,847 4,190 29,073 7,288 - 201,949Inter-segment sales - - - - - 24,932 (24,932) - 72,473 80,078 8,847 4,190 29,073 32,220 (24,932) 201,949 Operating profit 18,488 24,261 7,104 1,115 2,583 (8,393) - 45,158Financial income - - - - - (335) - (335)Financial expenses (689) (1,255) (9) (480) (915) (218) - (3.566)Income before taxes 17,799 23,006 7,095 635 1,668 (8,946) - 41,257Taxes - - - - - (10,756) - (10,756)Net income for the 17,799 23,006 7,095 635 1,668 (19,702) - 30,501quarter Other information:Acquisition of fixed (6,984) (2,139) (4) (14,193) (289) (3,340) - (26,949)assetsDepreciation and (3,539) (3,207) (313) (1,294) (246) (1,061) - (9,660)amortization Non Port Ship segmentedSeptember 30, 2007 Towage terminals Agency Offshore Logistics activities Elimination Consolidated(Nine-month period R$ R$ R$ R$ R$ R$ R$ R$ending) Income StatementRevenue 194,295 196,991 27,907 14,042 87,017 7,567 - 527,819Inter-segment sales - - - - - 84,371 (84,371) - 194,295 196,991 27,907 14,042 87,017 91,938 (84,371) 527,819 Operating Profit 59,917 55,592 10,210 1,846 5,382 (34,961) - 97,986Financial income - - - - - 19,045 - 19,045Financial expenses (4,030) (4,335) (2) (1,155) (401) (408) - (10,331)Income before taxes 55,887 51,257 10,208 691 4,981 (16,324) - 106,700Taxes - - - - - (32,343) - (32,343)Net income for the 55,887 51,257 10,208 691 4,981 (48,667) - 74,357period Other Information:Acquisition of fixed (19,591) (25,726) (1,173) (46,134) (2,626) (1,063) - (96,313)assetsDepreciation and (8,910) (8,700) (894) (3,520) (1,317) (1,276) - (24,617)amortization Non Port Ship segmentedSeptember 30, 2006 Towage terminals Agency Offshore Logistics activities Elimination Consolidated(Nine-month period R$ R$ R$ R$ R$ R$ R$ R$ending) Income statementRevenue 186,790 195,337 31,815 14,532 77,197 22,986 - 528,657Inter-segment sales - - - - - 63,293 (63,293) - 186,790 195,337 31,815 14,532 77,197 86,279 (63,293) 528,657 Operating profit 47,341 49,892 13,257 1,687 5,205 (19,727) - 97,654Financial income - - - - - 16,135 - 16,135Loss on investment - - - - - (6,136) - (6,136)disposalFinancial expenses (3,246) (2,377) (17) (1,472) (1,248) (4,396) (12,756) -Income before taxes 44,095 47,515 13,240 215 3,957 (14,124) - 94,897Taxes - - - - - (27,441) - (27,441) Net income for the 44,095 47,515 13,240 215 3,957 (41,565) - 67,457period Other information:Acquisition of fixed (11,635) (19,239) (535) (31,874) (490) (3,783) - (67,556)assetsDepreciation and (10,858) (8,992) (926) (3,016) (765) (1,492) - (26,049)amortization September 30, 2007 Balance sheetAssetsSegment assets 205,198 262,306 12,876 118,811 24,904 332,655 - 956,750LiabilitiesSegment liabilities (139,032) (76,364) 1,681 (108,784) (10,638) (63,010) - (396,147) December 31, 2006 Balance sheetAssetsSegment assets 220,499 284,125 17,442 92,069 23,888 60,857 - 698,880LiabilitiesSegment liabilities (136,588) (98,921) (15,894) (89,879) (7,586) (40,001) - (388,869) Financial expenses and respective liabilities were allocated to reportingsegments where interest arises from loans used to finance the construction offixed assets in that segment. Financial income arising from bank balances held in Brazilian operatingsegments, including foreign exchange variation on such balances, were notallocated to the business segments as cash management is performed centrally bythe corporate function. 4. PERSONNEL EXPENSES Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ US$ US$ Salaries and charges (22,122) (15,572) (63,222) (46,983)Benefits (5,598) (5,131) (14,743) (13,725)Pension costs (491) (220) (1,127) (665)Long term incentive plan (778) - (1,473) - (28,989) (20,923) (80,565) (61,373) Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 R$ R$ R$ R$ Salaries and charges (40,680) (33,857) (116,259) (102,150)Benefits (10,294) (11,156) (27,111) (29,841)Pension costs (903) (478) (2,072) (1,446)Long term incentive plan (1,431) - (2,709) - (53,308) (45,491) (148,151) (133,437) 5. OTHER OPERATING EXPENSES The breakdown of other operating expenses is as follows: Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ US$ US$ Service cost (12,493) (14,183) (33,072) (38,250)Rent of tugs (1,977) (1,971) (19,253) (17,414)Freight (6,855) (2,139) (18,978) (5,271)Other rentals (2,969) (2,339) (8,654) (6,648)Utilities (2,327) (2,288) (7,018) (6,218)Container movement (2,239) (1,980) (5,876) (5,750)Insurance (872) (970) (3,693) (3,679)Maintenance (1,793) (1,833) (4,630) (4,927)Other expenses (3,125) (5,269) (7,346) (4,016) (34,650) (32,972) (108,520) (92,173) Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 R$ R$ R$ R$ Service cost (22,973) (30,837) (60,816) (83,163)Rent of tugs (3,636) (4,285) (35,404) (37,862)Freight (12,606) (4,651) (34,899) (11,460)Other rentals (5,460) (5,085) (15,914) (14,454)Utilities (4,279) (4,975) (12,905) (13,519)Container movement (4,117) (4,305) (10,805) (12,502)Insurance (1,604) (2,109) (6,791) (7,999)Maintenance (3,297) (3,985) (8,514) (10,712)Other expenses (5,746) (11,456) (13,509) (8,732) (63,718) (71,688) (199,557) (200,403) 6. LOSS ON INVESTMENT DISPOSAL The loss disposal of investments in the amount of US$2,822 (R$6,136) relates tothe write-off in the first quarter of 2006 of an accounts receivable by WilsonSons Limited from Ocean Wilsons Investments Limited. 7. INVESTMENT AND FINANCE COSTS Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ US$ US$ Interest on investments 1,940 (131) 9,470 6,721 Other 292 (23) 887 700 2,232 (154) 10,357 7,421 Interest on bank loans and (1,687) (1,587) (4,789) (5,020) overdrafts Interest on obligations under (120) 88 (243) (422) finance leases Total borrowing costs (1,807) (1,499) (5,032) (5,442) Derivative costs (403) (141) (586) (425) (2,210) (1,640) (5,618) (5,867) Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 R$ R$ R$ R$ Interest on investments 3,567 (285) 17,414 14,613 Exchange gain on loans 537 (50) 1,631 1,522 4,104 (335) 19,045 16,135 Interest on bank loans and (3,104) (3,450) (8,806) (10,914) overdrafts Interest on obligations under (219) 191 (447) (918) finance leases Total borrowing costs (3,323) (3,259) (9,253) (11,832) Derivative costs (741) (307) (1,078) (924) (4,064) (3,566) (10,331) (12,756) 8. INCOME TAX AND SOCIAL CONTRIBUTION Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ US$ US$ Current tax Income tax and social (6,699) (5,817) (20,055) (12,771) contribution Deferred tax Income tax and social (384) 870 2,467 150 contribution Total Income tax and social (7,083) (4,947) (17,588) (12,621) contribution Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 R$ R$ R$ R$ Current tax Income tax and social (12,319) (12,648) (36,880) (27,767) contribution Deferred tax Income tax and social (706) 1,892 4,537 326 contribution Total Income tax and social (13,025) (10,756) (32,343) (27,441) contribution The reconciliation of the combined statutory income tax and social contributionrates with the effective income tax expense for the periods is as follows: Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ US$ US$ Profit before tax 26,295 18,976 58,024 43,647Tax at the standard Brazilian tax rate of 34% 8,940 6,452 19,728 14,840Effect of permanently non-chargeable income (1,176) (2,302) (850) (3,943)and non-deductible expensesEffect of differing tax rates of subsidiaries (681) 797 (1,290) 1,724that operate in other jurisdictionsIncome tax expense 7,083 4,947 17,588 12,621Effective tax rate 27% 26% 30% 29% Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 R$ R$ R$ R$ Profit before tax 48,353 41,255 106,700 94,898Tax at the standard Brazilian tax rate of 34% 16,440 14,027 36,278 32,265Effect of permanently non-chargeable income and non-deductible expenses (2,163) (5,005) (1,563) (8,574)Effect of differing tax rates of subsidiaries that operate in other jurisdictions (1,252) 1,734 (2,372) 3,750Income tax expense 13,025 10,756 32,343 27,441Effective tax rate 27% 26% 30% 29% The Group earns its taxable income primarily in Brazil. Therefore the tax rateused for tax on income on usual activities is the Brazilian standard rate of34%, consisting of income tax of 25% and social contribution of 9%. 9. EARNINGS PER SHARE The calculation of the basic income diluted per share is based as follows: Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30,2007 Sept 30, 2006 US$ US$ US$ US$ Dividends - 7,068 8,000 7,068Undistributed earnings 18,859 6,741 31,422 23,429Net income for the period 18,859 13,809 39,422 30,497 Weighted average number of shares 71,144,000 5,012,000 55,145,763 5,012,000 Earnings per share 0,27 2,76 0,71 6,08 Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30,2007 Sept 30, 2006 R$ R$ R$ R$ Dividends - 15,367 14,711 15,367Undistributed earnings 34,680 14,657 57,782 50,940Net income for the period 34,680 30,024 72,493 66,307 Weighted average number of shares 71,144,000 5,012,000 55,145,763 5,012,000 Earnings per share 0,49 5,99 1,31 13,23 10. PROPERTY, PLANT AND EQUIPMENT September 30, 2007 December 31, 2006 Cost Depreciation Net value Cost Depreciation Net value accumulated accumulated US$ US$ US$ US$ US$ US$ Land and buildings 61,632 (15,813) 45,819 42,982 (9,492) 33,490Floating craft 153,398 (65,982) 87,416 126,359 (58,065) 68,294Vehicles, plant and equipment 91,838 (32,407) 59,431 86,742 (30,068) 56,674Assets under construction 28,611 - 28,611 17,327 - 17,327Total 335,479 (114,202) 221,277 273,410 (97,625) 175,785 September 30, 2007 December 31, 2006 Cost Depreciation Net value Cost Depreciation Net value accumulated accumulated R$ R$ R$ R$ R$ R$ Land and buildings 113,335 (29,079) 84,256 91,895 (20,294) 71,601Floating craft 282,083 (121,334) 160,749 270,156 (124,143) 146,013Vehicles, plant and equipment 168,881 (59,593) 109,288 185,454 (64,285) 121,169Assets under construction 52,613 - 52,613 37,045 - 37,045Total 616,912 (210,006) 406,906 584,550 (208,722) 375,828 Assets under construction and floating craft: The decrease in assets under construction and consequent increase in the balanceof floating craft refers, mainly to construction conclusion of the PlatformSupplier Vessel ("PSV") by the Group shipyard in the second quarter of 2007. Guarantees: Lands and buildings with a book value of US$304 (R$559) (December 31, 2006:US$294 (R$629)) and tugs with a book value of US$3,340 (R$6,142) (December 31,2006: US$3,500 (R$7,484)), were given in guarantee of several law suits. The Group has pledged assets at the carrying amount of approximately US$39.3million, (approximately R$72.3 million) (December 31, 2006: approximatelyUS$40.6 million (approximately R$86.8 million), to secure loans granted to theGroup. 11. SUBSIDIARIES Place of Proportion of Method used incorporation ownership to record and operation interest the investment WILSON SONS DE ADMINISTRACAO E COMERCIO LTDA. Brazil 100% Consolidation Holding companySAVEIROS CAMUYRANO SERVICOS MARITIMOS S.A. Brazil 100% Consolidation Tug operatorWILSON, SONS S.A. COMERCIO, INDUSTRIA, E AGENCIA DE NAVEGACAO Brazil 100% Consolidation ShipyardWILSON SONS AGENCIA MARITIMA LTDA. Brazil 100% Consolidation Ship agentsSOBRARE-SERVEMAR S.A. Brazil 100% Consolidation Tug operatorWILPORT OPERADORES PORTUARIOS LTDA. Brazil 100% Consolidation StevedoringCOMPANHIA DE NAVEGACAO DAS LAGOAS LTDA. Brazil 100% Consolidation Tug operatorCOMPANHIA DE NAVEGACAO DAS LAGOAS NORTE LTDA. Brazil 100% Consolidation Tug operatorWILSON, SONS LOGISTICA LTDA. Brazil 100% Consolidation LogisticsWILSON, SONS TERMINAIS DE CARGAS LTDA. Brazil 100% Consolidation Transport servicesEADI SANTO ANDRE TERMINAL DE CARGA LTDA. Brazil 100% Consolidation Bonded warehousingVIS LIMITED Guernsey 100% Consolidation Holding companyTECON RIO GRANDE S.A. Brazil 100% Consolidation Port terminalTECON SALVADOR S.A. Brazil 90% Consolidation Port terminalBRASCO LOGISTICA OFFSHORE LTDA. Brazil 75% Consolidation Port operator 40% of Brasco Logistica Offshore Ltda. was proportionally consolidated as ajoint venture, until it was acquired as a subsidiary in March of 2006 (see Note19). 12. JOINT VENTURES The following amounts are included in the Group's financial statements as aresult of proportionally consolidation of joint ventures. Sept 30, 2007 Dec 31, 2006 Sept 30, 2007 Dec 31, 2006 US$ US$ R$ R$ Current assets 4,479 3,880 8,236 8,295 Non-current assets 6,426 5,226 11,817 11,173 Current liabilities (6,274) (4,023) (11,537) (8,601) Non-current liabilities (1,353) (1,760) (2,488) (3,763) Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ US$ US$ Revenues 5,082 10,313 17,123 22,354 Expenses (5,755) (4,217) (17,607) (16,069) Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 R$ R$ R$ R$ Revenues 9,346 22,422 31,488 48,602 Expenses (10,583) (9,170) (32,378) (34,938) The Group has the following interests in joint ventures: Place of Proportion of Method used incorporation ownership to record and operation interest the investment Consorcio de Rebocadores Baia de Sao Marcos Brazil 50% Proportional Tug operator consolidationAllink Transportes Internacionais Limitada Brazil 50% Proportional Non-vessel operating common carrier consolidationConsorcio de Rebocadores Barra de Coqueiros Brazil 50% Proportional Tug operator consolidationDragaport Limitada Brazil 33% Proportional Dredge operator consolidationDragaport Engenharia Brazil 33% Proportional Dredge operator consolidation On April 7, 2006 the Group disposed of its 50% of interests in WR OperadoresPortuarios, a stevedoring and port operator. 13. TRADE AND OTHER RECEIVABLES Sept 30, 2007 Dec 31, 2006 Sept 30, 2007 Dec 31, 2006 US$ US$ R$ R$ Accounts receivable for services 43,523 28,614 80,035 61,177 renderedTaxation recoverable 2,317 1,304 4,261 2,788Prepayments and recoverable 27,995 23,827 51,480 50,942 taxesProvision for doubtful (1,059) (933) (1,948) (1,995) receivables 72,776 52,812 133,828 112,912 14. BANK OVERDRAFTS AND LOANS Sept 30, 2007 Dec 31, 2006 Sept 30, 2007 Dec 31, 2006 Rate - % US$ US$ R$ R$ Bank overdrafts 1,432 809 2,633 1,730 Santander CDI + 0,16% p.m. 1,432 809 2,633 1,730 Bank loans 124,223 109,352 228,434 233,794 BNDES 1,5% to 6% p.y. 101,107 78,417 185,926 167,655 IFC 5,33% to 9,48% p.y. 23,116 30,935 42,508 66,139 125,655 110,161 231,067 235,524 The breakdown of bank overdrafts and loans by maturity is as follows: Within one year 15,901 14,945 29,240 31,952In the second year 14,730 14,216 27,088 30,394In the third year to fifth years 30,890 32,170 56,803 68,779inclusiveAfter five years 64,133 48,830 117,936 104,399Total 125,654 110,161 231,067 235,524 Total current 15,901 14,945 29,240 31,952Total non-current 109,753 95,216 201,827 203,572 The breakdown of bank overdrafts and loans by currency is as follows: $Real $Real linked to linked to $Real US Dollars US Dollars Total $Real US Dollars US Dollars TotalSeptember 30, 2007 US$ US$ US$ US$ R$ R$ R$ R$ Bank overdrafts 1,432 - - 1,432 2,633 - - 2,633Bank loans - 101,107 23,116 124,223 - 185,926 42,508 228,434 Total 1,432 101,107 23,116 125,655 2,633 185,926 42,508 231,067 December 31, 2006 Bank overdrafts 809 - - 809 1,730 - - 1,730Bank loans - 78,417 30,935 109,352 - 167,655 66,139 233,794Total 809 78,417 30,935 110,161 1,730 167,655 66,139 235,524 In the third quarter of 2007, the Group obtained new loans from the BNDES forfinancing the construction of new vessels (platform supplier vessels. The other main characteristics of the Group's loans are as follows: The principal on the loans in Reais linked to US Dollars are subject to exchangevariance on the changes in the US Dollar/Real exchange rate and bear interestbetween 1.5% and 6.0% per year on the US Dollar amounts. These loans are tofinance the building of new tugs, platform supply vessels and the refurbishmentof dredges. They are guaranteed by mortgage on the assets financed. The amountsoutstanding at September 30, 2007 are repayable over periods varying up to 18years. The loans in US Dollars bear interest at rates between six-month LIBOR plus 3.5%per year and six-month LIBOR plus 4.15% per year. The majority of these loansare to fund the expansion of the container terminal at Tecon Rio Grande and haveno recourse to other companies in the Group. The amounts outstanding atSeptember 30, 2007 are repayable over periods varying up 8 years. The fair value of debt is as follows: Sept 30, 2007 Dec 31, 2006 Sept 30, 2007 Dec 31, 2006 US$ US$ R$ R$ Bank overdrafts 1,432 809 2,633 1,730 Bank loans 123,046 109,304 226,269 233,691 BNDES 101,107 78,417 185,926 167,655 IFC 21,939 30,887 40,343 66,036 Total 124,478 110,113 228,901 235,421 15. FINANCIAL INSTRUMENTS AND RISK ASSESSMENT a) Foreign exchange risk management (Forwards and Swaps) The Group engages in forward and swap operations to mitigate and manage theexposure to change in foreign exchange rates of loan agreements denominated inforeign currency (in US Dollars and in Reais linked to US Dollars). Contracts are denominated in Reais at the notional value of US$676 (R$1,243)(December 31, 2006: US$2,038 (R$4,293)). The fair value of forward and swap operations at 30 September 2007 is US$51(R$94) (December 31, 2006: US$782 (R$1,673)) reported under liabilities asDerivative Financial Instruments. The results of transactions with derivativesterminated in the reporting periods and still in force as of each period end isreported under Finance Costs (Note 7). b) Fair value of financial instruments The Group's financial instruments are recorded in balance sheet accounts atSeptember 30, 2007 and December 31, 2006 at amounts compatible with thosepracticed in the market at those dates. These instruments are managed thoughoperating strategies aimed to obtain liquidity, profitability and security. Thecontrol policy consists of an ongoing monitoring of rates agreed versus those inforce in the market and confirmation as to whether its short-term financialinvestments are being properly marked to market by the institutions dealing withits funds. The Group does not make speculative investments in derivatives or any other riskassets. The determination of estimated realization values of Company's financial assetsand liabilities relies on information available in the market and relevantassessment methodologies. Nevertheless, a considerable judgment was requiredwhen interpreting market data to derive the most adequate estimated realizationvalue. Eventually, the following estimates do not necessarily indicate theamounts that can be realized in the present foreign exchange market. c) Criteria, assumptions and limitations used when computing market values Cash and cash equivalents The market values of the bank current account balances are consistent with bookbalances. The market value of short-term financial investments was calculatedbased on market quotations. Investments classified as "available for sale" The investment available for sale is in Barcas S.A. Transportes Maritimos. Suchcompany does not have any market quotation, and its fair value is calculated inaccordance with criteria and assumptions set by Group management. Intercompany loans receivable/payable Because of the lack of similar financial instruments in the present market, therelated amounts involved are shown at book balances. Trade accounts receivable and others/Suppliers and other payables In the Group management's view, the book balance of trade and other accountsreceivable and suppliers and other payables approximates fair value. Investments Market values of Group investments are identical to book balances, since they donot have any market quotation. Bank Overdrafts and Loans Market values of loans arrangements were calculated at their present valuedetermined by future cash flows and at interest rates applicable to instrumentsof similar nature, terms and risks or at market quotations of these securities. Market value of BNDES/FINAME financing arrangements is identical to bookbalances since there are no similar instruments, with comparable maturity datesand interest rates. As regards the loan arrangement with the IFC, fair value was obtained at therate of the latest loan arrangement using the Libor rate at September 30, 2007. Derivatives The Company engages in derivatives operations ("swaps" and "forwards") to hedgeagainst the effects from changes in foreign currency-denominated exposure.Market value is determined at quotations reported by the financial institutionsissuing the instruments. d) Credit Risk The Group's credit risk can be attributed mainly to balances such as cash andcash equivalents, investments classified as "trading" and trade accountsreceivable. The accounts receivable in the balance sheet are shown net of the provision fordoubtful receivables. The valuation provision is established whenever a loss isdetected, which, based on past experience, evidences impaired possibility ofrecovering cash flows. The Group's sales policy is subordinated to the credit sales rules set byManagement, which seeks to mitigate any loss from customers' delinquency. 16. TRADE AND OTHER PAYABLES Sept 30, 2007 Dec 31, 2006 Sept 30, 2007 Dec 31, 2006 US$ US$ R$ R$ Suppliers 53,589 39,785 98,545 85,060Other taxes 7,896 6,723 14,519 14,373Accruals and other payables 8,608 5,997 15,830 12,823 70,093 52,505 128,894 112,256 The Group has financial risk management policies in place to ensure thatpayables are paid within the credit timeframe. 17. CONTINGENT LIABILITIES The legal situation of the Group includes labor, civil and tax processes.Management, based on the opinion of its external legal counsel, understands thatlegal procedures in each situation are sufficient to preserve the equity of theGroup, there being no need to recognize loss provisions in addition to thoseentered at September 30, 2007 in the amount of US$5,665 (R$10,417), (December31, 2006: US$5,913 (R$12,640)). Additionally, there were no significantmodifications in the legal situation of the Group subsequent to that describedin the consolidated financial statements for the year ended December 31, 2006,as well as in the Final Prospectus of the Public Offering for the Primary andSecondary Distribution of Certificates of Deposit representative of CommonShares of Wilson Sons Limited, both reported on April 26, 2007. 18. SHARE CAPITAL Sept 30, 2007 Dec 31, 2006 Sept 30, 2007 Dec 31, 2006 US$ US$ R$ R$ Issued and fully paid 60,144,000 ordinary shares of 8 1/3 p each 9,905 8,072 18,214 17,258 On February 2007, the Group performed a twelve for one share split increasingthe number of shares from 5,012,000 to 60,144,000 and more 11,000,000 shares, onApril 19, 2007, totalizing 71,144,000 shares. 19. ACQUISITION AND DISPOSAL OF SUBSIDIARY AND JOINT VENTURE Acquisition of subsidiary In March 2006, the Group acquired from third parties the outstanding 60%shareholding of its 40% owned affiliated onshore base manager and logisticsbusiness Brasco Logistica Offshore Ltda. The consideration paid was US$1,2million (R$2,6 million). Immediately following this acquisition, the Group soldan interest of 25% in this Company for US$0,5 million (R$1,1 million). Thesurplus on acquisition of US$1,4 million (R$3,1 million) was recognized in theincome statement, Prior to this reorganization the Group's interest in theacquired entity had been proportionately consolidated. Disposal of joint venture On April 7, 2006, the Group sold its 50% shareholding in WR OperadoresPortuarios for US$4,2 million (R$8,1 million). 20. NOTES TO THE CASH FLOW STATEMENT Three-month period ending Nine-month period ending Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006 US$ US$ R$ R$ Operating profit 53,285 44,915 97,986 97,654Adjustments for:Depreciation of property, plant and 13,186 11,770 24,248 25,590equipmentAmortization of intangible assets 201 211 370 459Income on disposal of property, plant and (507) 75 (932) 163equipmentGain on disposal of joint venture - (2,965) - (6,447)Income on disposal of investment in - (1,433) - (3,116)subsidiaryIncrease (decrease) of provisions (248) (994) (456) (2,161)Operating cash flow before changes in working capital 65,917 51,579 121,216 112,142 Increase in inventories (5,123) 880 (9,421) 1,913Increase in receivables (19,135) (3,678) (35,187) (7,997)Increase in payables 16,674 8,766 30,661 19,059Increase in other assets non-current (2,513) (2,010) (4,621) (4,370)Cash generated by operations 55,820 55,537 102,648 120,747Taxes paid (18,981) (13,663) (34,904) (29,706)Interest paid (4,209) (4,466) (7,740) (9,710)Net cash from operating activities 32,630 37,408 60,004 81,331 21. RELATED PARTY TRANSACTIONS Transactions between the Company and its subsidiaries, which are relatedparties, have been eliminated on consolidation and are not disclosed in thisnote. Transactions between the Group and its associates are disclosed asfollows. Current Non-current Current Non-current Revenues Expenses assets assets liabilities liabilities US$ US$ US$ US$ US$ US$ Associates: Escritorio de Advocacia Gouvea - - - - - 21 VieiraJoint ventures: Allink Transportes - - - - 224 1Internacionais Ltda. Consorcio de Rebocadores Barra - - - 281 24 - de Coqueiros Consorcio de Rebocadores Baia - - - 2,997 1,463 4,444 de Sao Marcos Dragaport Ltda - - - 26 300 - Dragaport Engenharia Ltda - - - - - 426Others Porto Campinas Ltda. 6 566 - - - - International Finance - - - 28,689 - 1,171Corporation Ocean Wilson Holding Limited - - - - - - September 30, 2007 6 566 - 31,993 2,011 6,063 Three-month period ended - - - - 4,867 1,035 September 30, 2007 Year ended December 31, 2006 2,118 1,953 September 30, 2006 3,548 729 Three-month period ended 4,120 1,218 1,609 30,935 - - September 30, 2006 Current Non-current Current Non-current Revenues Expenses assets assets liabilities liabilities R$ R$ R$ R$ R$ R$Associates Escritorio de Advocacia - - - - - 38Gouvea VieiraJoint ventures Allink Transportes - 1 - - 411 1Internacionais tda. Consorcio de Rebocadores - - - 321 44Barra de Coqueiros Consorcio de Rebocadores Baia - - - 5,511 2,691 8,172 de Sao MarcosDragaport Ltda. - - - 48 552Dragaport Engenharia Ltda. - - - - - 784Others Porto Campinas Ltda. 11 1,041 - - - - International Finance - - - - - -Corporation Ocean Wilson Holding Limited - - - 52,757 - 2,153 September 30, 2007 11 1,042 - 58,637 3,698 11,148 Three-month period ended - - - - 10,534 2,241 September 30, 2007 Year ended December 31, 2006 3,894 3,591 September 30, 2006 7,679 1,577 Three-month period ended 8,809 2,604 3,440 66.139 - - September 30, 2006 22. INITIAL PUBLIC OFFERING OF SHARES (IPO) On June 1, 2007, Wilson Sons Limited and its controlling shareholder, OceanWilsons Holdings Limited (the "Company" and the "Selling Shareholder",respectively) concluded the Initial Public Offering consisting of a primary andsecondary offering of Brazilian Depositary Receipts (the "BDRs"), representingcommon shares issued by the Company in accordance with the regulations of theBrazilian Securities Commission (the "CVM") with sales effort to internationalinvestors as defined by international regulations applied to such operation. The Initial Public Offering has been duly approved by the Company and theSelling Shareholder as per the respective corporate approvals dated April 9,2007. Each BDR represents one common share issued by the Company and/or held by theSelling Shareholder. The BDRs have been issued by Banco Itau S.A., asdepositary. The Company has applied to list and trade its BDRs on the SaoPaulo Stock Exchange (the "Bovespa") under the type Patrocinado Nivel III andunder the symbol "WSON11". The shares represented by the BDRs are deposited with The Bank of New York(Luxembourg) S.A., as custodian and has been listed to trading on the EURO MTFmarket, the exchange regulated market operated by the Luxembourg Stock Exchange. Under the primary offering 11.000.000 BDRs issued by the Company have beentraded under the offering price of US$11.74/BDR (R$23,77/BDR). The net amountreceived by the Company with regard the primary offering was approximatelyUS$122,289 (R$251,011). 23. SUMMARY OF DIFFERENCES BETWEEN INTERNATIONAL ACCOUNTING STANDARD No, 34(IAS 34), INTERIM FINANCIAL REPORTING, AND ACCOUNTING PRACTICES ADOPTED INBRAZIL ("BR GAAP") The consolidated financial statements were prepared in accordance withInternational Accounting Standard No. 34, Interim Financial Reporting, ("IFRS"),which differs significantly from accounting practices adopted in Brazil: a) Reconciliation of differences between net equity reported under IFRS andnet equity reported under BR GAAP: Sept 30, 2007 Dec 31, 2006 R$ R$ Equity reported under IFRS 560,603 310,011Adjustments for differences between the accounting practices:Update of available investment for sale (8,121) (8,121) Reversal of negative goodwill (4,475) (4,475) Accumulated amortization of goodwill (3,875) (1,615) Financial lease: Fixed assets: Costs (24,227) (21,067) Accumulated depreciation 10,803 7,944 Liabilities of lease 4,301 3,642Capitalized financial result: Fixed assets Cost 20,838 24,655 Accumulated amortization (8,001) (5,873)Conversion effects 130,565 84,372Others (366) (7,508)Deferred income tax and social contribution on the (39,930) (30,546) amounts of the differencesEquity reported under BR GAAP 638,115 351,419 b) Reconciliation of differences between net income reported under IFRSand net income reported under BR GAAP: Accumulated Sept 30, 2007 Sept 30, 2006 R$ R$ Net income reported under IFRS 74,358 67,457Adjustments for differences between the accounting practices: Goodwill amortization (2,683) - Financial lease 175 (3,029) Capitalized interest and exchange variation (5,779) (1,541) Conversion and exchange rate effects 10,641 (6,548) Cost of subscription to capital - IPO (6,128) - Others 717 298 Deferred income tax and social contribution (1,039) 3,678Net income reported under BR GAAP 72,340 60,317 24. SUBSEQUENT EVENTS On October 1, 2007, with the objective of simplifying the Group's organizationalstructure, Companhia de Navegacao das Lagoas and Companhia de Navegacaodas Lagoas do Norte, subsidiaries of Wilson Sons Limited, were merged intoSaveiros, Camuyrano Servicos Maritimos S/A, also a subsidiary of Wilson SonsLimited. This merger does not alter the shareholding in Saveiros, Camuyrano ServicosMaritimos S/A and will not affect any shareholder rights or the rights ofbearers of Brazilian Depositary Receipts in Wilson Sons Limited. On October 19, 2007, a memorandum of understanding was signed with Great LakesDredge & Dock Company, LLC for the disposal of the dredges which are fixedassets of Dragaport Ltda., a Company in which the Company has a shareholding of33.33%. This transaction is expected to be concluded before the end of 2007 andis intended to meet the strategic objective of optimizing the operations of theGroup. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ocean Wilsons