19th Mar 2008 11:24
Ocean Wilsons Holdings Ld19 March 2008 Ocean Wilsons Holdings Limited Preliminary Announcement At a board meeting held on the 18 March the following announcement of theaudited results of the Company and its subsidiary companies for the year ended31 December 2007 was approved by the directors. Chairman's Statement Introduction I am pleased to report another strong performance in 2007. As reported in theChairman's interim statement, on the 30 April 2007, Ocean Wilsons HoldingsLimited, ("Ocean Wilsons" or the "Company") successfully floated Wilson SonsLimited, ("Wilson Sons") the holding company of its Brazilian business, on theSao Paulo Stock Exchange and the Luxembourg Stock Exchange. The flotationinvolved the sale of 18.7 million shares in Wilson Sons by Ocean Wilsons,resulting in net proceeds to the Company of approximately US$ 205.6 million, andthe issue of 11 million new shares by Wilson Sons, raising approximatelyUS$119.1 million for Wilson Sons. Following the flotation, Ocean Wilsons retains a 58.25% holding in Wilson Sons.The Company will continue to fully consolidate Wilson Sons in its accounts butwith a 41.75% minority interest. As at the close of business on the 17 March2008 the Wilson Sons share price was Real 20.00 resulting in a market value forthe Ocean Wilsons holding of 41,444,000 shares in Wilson Sons of approximatelyUS$482 million which is equivalent to US$13.63 per Ocean Wilsons Share. Following a review of the possible options for the use of the net proceeds fromthe sale, the Board decided as indicated in the April class one circular toinvest approximately US$183.0 million of this money in its investmentsubsidiary, Ocean Wilson Investments Limited ("Ocean Wilsons Investments") toincrease the scale and breadth of that company's investments and expand theremit to include alternative investment classes, including illiquid securities,with a particular emphasis on emerging markets. This investment strategy will bereviewed on a regular basis to ensure it is consistent with changingcircumstances in global markets. The balance will be retained in a separate investment fund to cover the OceanWilsons long term incentive plan liability as detailed below and pay the companyoperating expenses. Results Revenue for the year grew 21% to US$404.0 million compared to US$334.1 millionin 2006 although operating profit for the year decreased 5% at US$ 58.5 million(2006: US$61.4 million) principally due to reduced margins and higher payrollcosts. Investment revenues increased US$15.9 million to US$27.1 million (2006:US$11.2 million) principally due to higher interest receipts from bank deposits. Profit before tax increased US$225.7 million from US$77.7 million to US$303.4million due to the profit on the disposal of the minority interest in WilsonSons of US$213.7 million and higher investment revenue. Earnings per share based on ordinary activities after taxation and minorityinterests were 729.8 cents (2006: 158.6 cents ). Investment Portfolio Investment mangers The Group's investment portfolio is held by Ocean Wilson Investments Limited ("Company") a wholly owned subsidiary registered in Bermuda. The Company hasappointed Hanseatic Asset Management LBG a Guernsey registered and regulatedinvestment group as its Investment Manager. The investment managers receive an investment management fee based on thevaluation of the funds under management and an annual performance fee. Theinvestment management fee is an annual rate of 1% payable monthly in arrears.The performance fee is 10% of the annual performance which exceeds the benchmarkand provided that the portfolio high water mark has been exceeded. The benchmarkis derived from the one year USD LIBOR, prevailing at the commencement of eachcalendar year plus 2%. Investment strategy The Board of the company determines investment guidelines and restrictions inconjunction with the investment manager, these together with the investmentmanagers reports are reviewed at the company's board meetings. The investment strategy agreed with the Group's investment managers is tomaximise the total return on assets, by investing in a portfolio of diversifiedassets including global equities, fixed income and alternative assets with aparticular emphasis on emerging markets. Investments are intended to add valueover the medium to longer-term through a non-market correlated, conviction basedinvestment style Investment portfolio performance Funds under management (including cash) at 31 December 2007 were $274.0million(2006: $79.2million). The large increase from 2006 is principally due to theUS$183 million added to the investment portfolio during the year from theproceeds of the sale of the Wilson Sons shares. The following table showsportfolio performance compared to the portfolio benchmark and MSCI World Index.Over the last 5 years the portfolio has returned 83.90% against 72.58% for theMSCI index in the same period. 1 Year 3 Year 5 Year Portfolio Performance 15.95% 46.38% 83.90%Benchmark 7.33% 17.27% 21.20%MSCI World Index 9.04% 38.60% 72.58% Details of the individual investment holdings at 31 December 2007 andperformance are contained within the Investment Managers report included in thefinancial review. Brazil In Brazil, the macro-economic fundamentals remain positive, in spite of theuncertainty about future monetary policy. Brazilian GDP grew 5.4% in 2007,supported by rising incomes and strong private consumption. Inflation remainedin line with the government's target,4.5% despite increasing pressure fromrising food prices. The strong Real helped government contain inflation bycheapening imports and restricting opportunities for retailers to pass onwholesale price increases to consumers. Interest rates remain amongst thehighest in the world at 11.25 % p.a although this is helping to keep inflationunder control. The US$ 40 billion trade surplus in 2007 was 14% lower than 2006, although totalforeign trade grew 22% to US$ 282 billion. Exports increased 17% to US$ 161billion, while imports grew 32% to US$ 121 billion, reaching all-time highs. 2007 was an exceptional year for the Brazilian stock market "Bovespa". In total64 initial public offerings "IPO's" were conducted in the year more than doublethe 26 IPOs registered in 2006. The Bovespa Index (Ibovespa) reached 43 recordshighs during 2007 reaching a peak of 65,790 points on 6 December 2007. Exchange rates In 2007, the Brazilian Real "Real" appreciated 17.3% against the US Dollar fromR$2.14 at 1 January 2007 to R$1.77 at the year end. The appreciation of the Realagainst the US Dollar generated a net exchange gain of US$7.8 million (2006:US$5.4 million) on the Group's Real-denominated cash balances. The appreciationof the Real also had an adverse effect on our Real denominated costs whenconverted into US Dollars which effect sales margins. Dividend The Board is recommending the payment of a final dividend of 36 cents per share(2006:20 cents) to be paid on the 16 May 2008, to shareholders on the close ofbusiness on 11 April 2008 making a total dividend for the year of 40 cents pershare (2006: 22 cents per share) The dividend for the year represents the full dividend to be received fromWilson Sons relating to 2007 plus 3% of the average capital employed in theinvestment portfolio. (The US$ 8 million received in dividends from Wilsons Sonsin March 2007 prior to Wilson Sons listing is not included in the Ocean Wilsons2007 dividend calculation as this represents part of the profits earned in2006). The Company's target dividend payout in respect of each financial year is to paythe Company's full dividend to be received from Wilson Sons in the period plus apercentage of the average capital employed in the investment portfolio to bedetermined annually by the Board. Dividends will continue to be set in US Dollars and paid twice yearly.Shareholders will continue to receive dividends in Sterling by reference to theexchange rate applicable to the US Dollar on the dividend record date, exceptfor those shareholders that elect to receive dividends in US Dollars. Your Board of Directors may review and amend the dividend policy from time totime in light of our future plans and other factors. The payment of dividendscannot be guaranteed and maybe discontinued or varied at the discretion of theBoard. Long term incentive plan Ocean Wilsons implemented a cash settled phantom option scheme that was approvedby shareholders at the Special General Meeting held on 19 April 2007. The schemeis for selected senior management and the options provide for the option holderto receive on exercise the difference between the option price of US$5.66 andthe lower of US$19.98, being the market capitalisation of the Wilson Sons at thedate of the IPO per OWHL share, and the market value of Wilson Sons per OWHLshare at the time of exercise. The awards vest in four tranches from April 2009to April 2012 and expire in April 2016. No further options will be granted underthe scheme. The maximum liability under the plan is US$25.1 million based on the Wilson SonsIPO offer price. A liability equal to the portion of the services received is recognised at thecurrent fair value at each balance sheet date. An accrual of US$ 10.0 millionhas been included in the accounts at 31 December 2007 for benefits accruingunder the plan, although cash payments under the scheme will not be made beforeApril 2009. Awards under the long term incentive plan vest in four tranches fromApril 2009 to April 2012 and expire in April 2016. In April 2007, Wilson Sons implemented a Real denominated cash settled phantomoption scheme for selected senior management. The options will provide cashpayments on exercise for the option holder to receive on exercise the differencebetween the option price of R$23.74 (Wilson Sons IPO price) and the Wilson Sonsmarket value at date of exercise. An accrual of US$ 2.6 million has beenincluded in the accounts at 31 December 2007 for benefits accruing under theplan. Corporate social responsibility Ocean Wilsons is committed to the responsible management of all its activitiesand believes that corporate social and environmental responsibility is key tothe interests of all our stakeholders Employment The Group currently employees more than 4,000 staff throughout Brazil andcreated numerous employment opportunities through its suppliers andsub-contractors. Ocean Wilsons is committed to the fair and equitable treatmentof all its employees in terms and conditions of employment irrespective ofgender, sexual orientation, religious beliefs, age, colour, or racial origin.The company continues to invest in the education and professional development ofits employees. We aim to prevent accidents and ill health in all aspects of the Group'soperations through continuous improvement of our processes and practices andwherever possible reducing or eliminating health and safety risks associatedwith our activities All employees and their dependents, 10,037 people at 31 December 2007, receiveprivate medical cover at a cost of US$6.7 million (2006: US$5.2 million) to theGroup. In addition, the Group provided US$4.5 million (2006: US$3.1 million) offood assistance for employees. . Taxes In 2007 the Group paid in excess of US$78 million (2006: US$70 million) inBrazilian income, payroll and sales taxes. Charitable donations In line with our policy to support local causes the Group made contributions ofUS$138,000 (2006: US$131,000) during the year. The emphasis of the Group'sactions continues to be community based projects helping disadvantaged childrenand adolescents. The Group's principal contributions in 2007 were: Task Brasil - project to improve the lives and supports the needs of childrenand pregnant teenage girls living on the streets of Brazil. Website: www.taskbrasil.org.uk Escola de Gente - raising awareness and promoting social inclusion for all partsof the community. Instituto Reacao - operates in disadvantaged communities promoting humandevelopment and social inclusion through sport and cultural activities. Website: www.institutoreacao.org.br Instituto Anglicano - project to teach disadvantaged children in Sao Paulo. Website: www.insitutoanglicano.org.br In addition to financial support, the Group encourages employees to participatein social initiatives. In 2007 the Group created the corporate programme 'Criando Lacos" (Creating ties). The objective of this programme is to providefinancial support and promote employee involvement in social initiatives. The Group continues to invest through fiscal incentives in documenting thecultural heritage of the maritime industry in Brazil. In 2007 the Groupcontributed US$118,000 to publishing the book "Empresas mais que centenarias" Group Policy on the environment Ocean Wilsons recognises that care of the environment is a central businessconcern, and we are dedicated to operating in a manner that protects theenvironment and reduces the effects of pollution from our operations. In 2007 the Group created a management committee to implement an environmentmanagement system that would ensure that our businesses meets all regulatory andlegislative requirements and guarantees the safety of the Group's operations.The Committee through its actions will continue to: - Identify environmental risks - Develop the Group's environmental policy - Identify corrective actions to improve the Group's operating procedures - Implement preventive measures to reduce environmental risks - Further develop emergency contingency plans - Enhance the systems of internal reporting to improve the quality of data so that we may monitor our environmental performance - Communicate and train employees about the Group's environment policy Outlook The Group remains in a very good position to take advantage of the positiveBrazilian economic environment. We expect to maintain growth and invest in ourcore businesses, primarily Port Terminals, Towage and Offshore. Our capital investment programme for 2008 is focused on the completion of theTecon Rio Grande and Tecon Salvador container terminal expansions and furtherinvestment in our offshore and tugboat fleets. Following expansion of the TeconRio Grande terminal capacity will increase 60% to approximately 1.1 million TEUsper annum. The Brazilian Group started construction on a further four Platform SupplyVessels (PSVs) at our shipyard, to be chartered to Petrobras under long termservice contracts. Two of these PSVs will be delivered in 2008 with theremaining two forecast for delivery at the end of 2009. We are alsoconstructing three new tugboats as part of our ongoing tug renewal programme. The strong Brazilian currency is still a challenge facing management, however,we believe that the strong results delivered in 2007 and the continuous growthposted in the period are examples of the management ability to deal with thisadverse environment. Management and staff On behalf of your Board, I would like to thank our management and staff fortheir continuous efforts and support during the year and for delivering asuccessful performance. We will continue to invest in their future throughtraining and incentive programmes. J. F. Gouvea Vieira Chairman 17 March 2007 WILSON SONS LIMITED OPERATING REVIEW We have summarised the following highlights from the Wilson Sons 2007 EarningsReport released on the 18 March 2008. The full report is available on the WilsonSons Limited website: www.wilsonsons.com Wilson Sons, through its subsidiaries in Brazil, is one of the largestintegrated operators of port and maritime logistics in the Brazilian market,with 170 years of experience, offering a comprehensive range of services withemphasis on the port and shipping sector. The principal operating segments ofthe business are port terminals, towage, logistics, shipping agency andoffshore. Management considers that the 2007 results show the continued strength of theWilson Sons business and consider the synergy between our businesses acompetitive advantage in developing our business. The most important externalfactors affecting our business are the level of Brazilian foreign trade, theperformance of the oil and gas industry in Brazil and growth in the Brazilianeconomy. Net revenue in 2007 grew by 20.9% to US$404.0 million from US$334.1 million in2006. The principal drivers behind this improved performance were increases inour port operation, towage and logistics revenue. The following segmental operating profit figures reflect Ocean Wilson LTIPcharges not included in Wilson Sons accounts Port Operations The most important businesses in the port operations division are the containerterminals located in Rio Grande, Rio Grande do Sul and Salvador in Bahia. Wealso operate terminals to support the offshore oil and gas industry. Net revenue increased by 16.9%, from US$ 127.4 million in 2006 to US$ 149.0million in 2007 as a result of increased container volumes, improved sales mixand the positive effect of the stronger Real as approximately 48% of ourrevenues are Real denominated. Operating profit at US$40.8 million for 2007 was marginally ahead of 2006,(US$39.4 million) as margins were eroded by higher operating costs, principallyincreased headcount and labour costs (collective bargaining agreements and LTIPprovisions), higher equipment rental costs due to capacity constraints,increased provisions for civil and labour claims and the adverse foreignexchange effect on the Real denominated expenses. Towage Wilson Sons offers harbour towage, ocean towage, salvage support and maritimesupport to the offshore oil and gas industry. Towage net revenue increased by 23.6%, from US$ 118.8 million in 2006 to US$146.8 million in 2007 due to increases in the number of harbour towagemanoeuvres, the average deadweight of vessels attended and higher revenues fromoil platform support, ocean towage and salvage support work. Operating profit increased by 45%, from US$ 31.4 million in 2006 to US$ 45.4million in 2007 reflecting the improved operating margins as a result of theincrease volumes in our high margin non-harbour towage services and tax creditsrealised in the period. Logistics Wilson Sons develops and provides differentiated logistics solutions for themanagement of the supply chain of our clients and the distribution of products,including a number of logistics services, such as, storage, customs storage,distribution, highway transportation, multimodal transportation and NVOCC - NonVessel Operating Common Carrier. Net revenue from our Logistics business grew 40% from US$ 49.3 million in 2006to US$69.1 million in 2007 driven by new customers in the pulp and paper andglass industries, increase in the range of services provided to existing clientsand an increase in bonded warehouse revenue mainly as a result of higher importvolumes. As the majority of our revenue is Real denominated, revenue in USDollar terms was also positively impacted by the stronger Real. Operating profit increased by 9.5%, from US$ 4.2 million in 2006 to US$ 4.6million in 2007 although margins were adversely affected by start up costs and areduction in some higher margin business compared with 2006. Shipping agency Wilson Sons acts as the shipowners representative as well providing ship agency,commercial representation, cargo documentation and container control forshipowners. Net revenue totalled US$ 20.4 million in 2007, representing a 14.6% increaseover 2006, US$ 17.8 million. This increase resulted mainly from increases inbill of lading fees and container control fees. Operating profit decreased from US$ 8.7 million in 2006 to US$ 2.9 million in2007, mainly due to an increase in doubtful debts, US$ 1.8 million; increasedprovision for civil and labour claims, LTIP expenses accrued in the period andan adverse foreign exchange effect. As the majority of the divisions' revenue isUS Dollar denominated and costs are Real denominated, the appreciation of theReal has an adverse effect on margins. Offshore Wilson Sons operates platform supply vessels (PSVs), to transport equipment andsupplies to and from offshore oil and gas installations. Net revenue increased by 27.4%, from US$ 8.4 million in 2006 to US$ 10.7 millionin 2007 due to the commencement of our third PSV, Saveiros Fragata, in thesecond quarter of 2007. This flowed through to operating profit which was 67%higher at US$1.8 million. Non Segmental Non-segmented activities include shipyard and our joint venture dredging companyDragaport and unallocated corporate costs. Net revenue in 2007 fell from US$ 12.5 million in 2006 to R$ 8.0 million in 2007due to a reduction in dredging operations in 2007, and lower third partyShipyard revenue. The operating loss increased from US$ 21.2 million to US$ 30.4 millionprincipally due to higher personnel costs, as a result of collective wageincreases and LTIP charges and increases in the provisions for contingenciesrelating to civil and labour lawsuits OCEAN WILSONS HOLDINGS LIMITED FINANCIAL REVIEW Revenue Group revenue, as reported for the year, was US$404.0 million, up 21% on 2006(US$334.1 million) principally due to increases in the towage, port operationsand logistics businesses. Specific contributors to increased revenues wereincreases in volumes and the exchange effect of the appreciation of the Realagainst the US Dollar. As a substantial part of our tariffs are Real denominatedthe appreciation of the Real increases revenue in US Dollar terms. Operating margins and profit Operating profit for the year remained strong at US$58.5 million although lowerthan the US$ 61.4 million reported in 2006. Improved operating results from ourBrazilian business, US$72.3million (2006 US$ 64.0 million) were offset bycharges from the OWHL long term incentive plan, US$10.0 million, (2006: nil) andinvestment portfolio management costs. The improvement in Brazilian operatingprofit arose mainly from the increase in Group revenue. Group margins wereadversely impacted by the appreciation of the Real against the US Dollar andincreased labour costs, as a result of collective wage agreements and LTIPcharges. Investment revenues Investment revenue in 2007 increased by US$ 15.9 million to US$27.1 million fromUS$11.2 million in 2006, principally due to increased interest from bankdeposits and higher exchange gains on cash and cash equivalents. The increasein interest receivable resulted from higher cash balances in 2007 following thesale of the minority interest in Wilson Sons. Other gains and losses Other gains arising from the Group's portfolio of trading investments remainedbroadly unchanged at US$11.7 million (2006: US$11.4 million). Finance costs Finance costs in 2007 increased by US$1.2 million to US$7.6 million from US$6.4million in 2006. The increase was attributable to increased interest payable asa result of higher borrowings and higher other interest charges. These negativemovements were partially offset by higher exchange gains on foreign currencyborrowings. Profit before tax Group profit before tax for the year increased US$225.7 million to US$303.4million from US$77.7 million in 2006 principally due to the profit on the saleof the minority interest in Wilson Sons, US$ 213.7 million. Removing the profiton the sale of the minority interest, profit before tax in 2007 was US$ 11.9million higher at US$89.7 million. Taxation The US$25.7million tax charge (2006: US$20.8million) for the year represents aneffective tax rate for the period of 8% (2006: 27%). The corporate tax rateprevailing in Brazil is 34%. The lower effective tax rate primarily reflectsthe benefit of income arising in subsidiaries operating in jurisdictions withlower tax rates, principally the profit on the sale of the minority interest inWilson Sons. Earnings per share Basic earnings per share for the year were 729.8 cents, compared with 158.6cents in 2006 due to the higher profit attributable to shareholders as a resultof the sale of the minority interest in Wilson Sons. Cash flow During the period there was a net cash inflow of US$157.2 million (2006: US$7.4million outflow) principally due to the disposal of the minority interest inWilson Sons, (US$ 324.7 million inflow) less purchases of trading investmentsUS$207.2 million (2006 US$14.5 million). The large increase in purchases oftrading investments (principally liquid funds) results from the additionalUS$183.0 million added to the portfolio during the year. Net cash flow from operating activities in 2007 increased by US$ 19.0 million or51% to US$56.2 million from US$37.2 million in 2006 principally due to improvedworking capital movements during 2007, US$1.0 million positive movement (2006:US$12.2 million adverse movement). Capital expenditure of US$92.3 million was mainly invested in vesselconstruction and the expansion of Tecon Rio Grande. (2006: US$42.2 million).During 2007 the Group's started construction on a further two Platform SupplyVessels (PSV) and continued the tug fleet renewal programme. Significantinvestments were made in civil works for the construction of the third berth atTecon Rio Grande and purchasing equipment for Tecon Rio Grande and TeconSalvador. At 31 December 2007, the Group had US$ 227.6 million in cash and cashequivalents, (2006: US$62.6 million). Balance sheet Net equity (equity attributable to ordinary shareholders of the Company)increased from US$ 221.8 million at the beginning of the year to US$ 478.8million, due to the profit in the period after minority interests. The stronggrowth in net assets reflects the strong profit performance over the year aswell as the appreciation of the Brazilian Real. This translates into net assetsper share excluding minority interests of US$13.54 cents per share (31 December2006: US$6.27). of this trading investments of US$272.8 million equates toUS$7.72 per share. Minority interests increased from US$3.8 million at thebeginning of the year to US$ 134.3 million, principally due to the sale of a41.75% minority interest in Wilson Sons. Debt The Group's consolidated borrowings (including obligations under finance leases)increased US$ 40.0 million at 31 December 2007 to US$151.8 million, (31 December2006: - US$ 111.8 million). Additional funds were released by the BNDES tofinance Platform Supply Vessels construction. During 2007 the Group made capitalrepayments on existing loans in accordance with debt repayment schedules ofUS$16.7 million (2006: US$16.1 million). At 31 December 2007 the Company and its subsidiaries had US$227.6 million incash and cash equivalents (31 December 2006: US$62.6 million). Insurance Our underwriting subsidiary, Ascension Underwriting recorded underwritingprofits of US$ 1.2million in the period representing part of the profits fromthe 2003, 2004 and 2005 underwriting years. The last year of underwriting, the2005 year of account will close in 2008 and is forecast to make a modest profit. Investment Portfolio Hanseatic Asset Management LBG that manages the Group's Investment portfolioreports as follows: Background Following the successful floatation in April 2007 of Wilson Sons Limited on theSao Paulo Stock Exchange and Luxembourg Stock Exchange, Ocean WilsonsInvestments Limited received US$183m (of the total net proceeds of US$205.6m) inOctober 2007. The monies were initially invested, in equal proportion, in threeDollar cash Funds offering daily liquidity and competitive interest ratestogether with 'AAA' financial institutions, namely Goldman Sachs, LehmanBrothers and Morgan Stanley. As reported in the 2007 Interim Report, the additional cash will be used "toincrease the scale and breadth of that company's investments and expand theremit to include alternative investment classes, including illiquid securities,with a particular emphasis on emerging markets". Details of new investments areoutlined under the 'Portfolio Activity' section of this report. General Last year's management commentary anticipated that there would be positivereturns from equities in 2007, but not on the scale of recent years, and thatthe level of market volatility would increase markedly. In US Dollar terms, theMSCI World Index of share prices advanced by 9%. However, weakness in the Dollarundermined these returns for non-dollar investors. For instance, the Dollar fellby over 9% against the Euro and by nearly 17% against the Brazilian Real. Withinthe global equity universe, the best gains came from Asia ex Japan and EmergingMarkets generally. Once again, commodities outperformed shares with oil,precious metals and agricultural prices appreciating significantly - partly tocompensate for Dollar weakness. For the first half of the year, markets were relatively stable. Signs of aweakening housing market in the US emerged during spring with the collapse ofseveral sub-prime mortgage lenders. However, by the summer the contagion withwider credit markets triggered a repricing of credit risk. Liquidity disappearedfrom structured credit instruments such as Collateralized Debt Obligations(CDOs) and Asset Backed Securities (ABS). Commercial Banks simply refused tolend to each other. Initially equity markets took a sanguine view that Central Banks would have toinject liquidity and many Emerging Markets in particular reached new highs,notably those markets related to China. Later in the year, the realisation thatthe US economy might be heading for recession and the scale of likely write-offsin the banking sector dominated equity markets and shares retreated to close theyear well below their highest levels. What caught markets by surprise was theextent of the sub-prime mortgage implosion. The degree of repackaging andsecuritisation along with the extent to which these securities had been soldaround the world, together with seriously inaccurate assessments from the creditrating agencies, had not been properly understood by most market participants.Consequently, the scale of the problem and subsequent vulnerability throughoutthe financial sector proved shocking to markets. This realisation turnedwidespread investor complacency that the Federal Reserve would come to therescue, into investor panic about how bad the situation might get. With this asbackground, what perhaps is surprising is not that equities sold off in thefourth quarter, but how well they had done until then. With the exception of Japan all the major markets gave positive returns inexcess of cash in 2007. In the case of the overlapping asset classes MSCI FarEast ex Japan (+30.7%) and MSCI Emerging Markets (+36.5%) the returns weresignificantly in excess of that. Finally, it is worth noting the emergence ofthe agricultural sector as an investment theme in 2007. Futures contracts in anumber of agricultural commodities such as wheat (+52%) and soybeans (+54%)rallied to reach multi-year highs. Demographics, industrialisation, climaticconditions and competing land-use claims for biofuels are driving this pricecycle, which may become as profound and entrenched as the strength in oil andmetal prices. PERFORMANCE ANNUAL PERFORMANCE Since 2007 2006 2005 2004 2003 2002 2001 2000* inception - 1 Nov 2000 Fund Performance 85.58% 16.00% 18.30% 12.13% 17.74% 19.78% -11.22% -1.85% -2.15%MSCI 12.19% 9.04% 20.07% 9.49% 14.72% 19.26% -27.66% -14.56% -7.44%Performance Benchmark 34.79% 7.33% 6.84% 3.10% 4.20% -0.27% 0.17% 9.58% -0.05% Note: * in respect of period 1st November - 31st December 2000 only The portfolio produced solid returns in 2007 amidst an environment of increasingvolatility levels. The portfolio returned 16.00% over the year, comfortably inexcess of the MSCI World Index (+9.04%) and the performance benchmark (+7.33%).Over the seven years that Hanseatic Asset Management has had the mandate ofmanaging the portfolio it has increased in value by 85.51%. Over the same periodthe MSCI World Index increased by only 12.19% and the performance benchmark by34.79%. The Emerging Markets were the standout theme behind the portfolio's returns. Theportfolio also gained from its commitment to the resources sector. Returns werenegative in Japan due to market weakness. Weak investment selection in Europewas more than offset by positive selection in resources and Emerging Markets.The long-standing bias in the portfolio emphasizing Emerging Markets at theexpense of the US paid off again in 2007. The top ten performing investments in 2007 were: Security Name Returns % Merrill Lynch World Mining Trust Plc 55.4UTS Energy Corporation 40.3Close Finsbury Far East Equity Fund 38.6SR Phoenicia Class B - Carthaginian Portfolio 38.2Investec Global Strategy Fund Ltd - Global Energy Fund 37.9Lansdowne UK Equity Fund 35.4SR Global Fund - Emerging Markets 33.8SR Global Fund - Asia 30.4Aberdeen Global Asia Pacific Fund 27.9Genesis Emerging Markets Fund Ltd 27.9 The individual investments which provided the greatest contribution toperformance in 2007 were: Security Name Contribution % Lansdowne UK Equity Fund 3.3Merrill Lynch World Mining Trust Plc 3.0SR Global Fund - Emerging Markets 1.8Close Finsbury Far East Equity Fund 1.6Aberdeen Global Asia Pacific Fund 1.1SR Global Fund - Asia 1.0Lansdowne European Equity Fund 1.0Findlay Park American Smaller Companies Fund 0.9BlueBay European Credit Opportunity Fund 0.7Investec Global Strategy Fund Ltd - Global Energy Fund 0.6 As at 31st December 2007, the portfolio's largest holdings were as follows: Market Value % ofSecurity Name US$ NAV Morgan Stanley Funds Plc USD Liquidity Fund 60,556,617 22.10Lehman Brothers Liquidity Fund Plc USD 53,819,214 19.64Goldman Sachs Funds Plc USD Liquid Reserves Fund 53,334,250 19.47Lansdowne UK Equity Fund 9,324,634 3.40Merrill Lynch World Mining Trust Plc 8,005,090 2.92Lansdowne European Equity Fund 5,587,630 2.04SR Global Fund - Emerging Markets 5,185,632 1.89Findlay Park American Smaller Companies Fund 4,690,929 1.71Ashmore Emerging Markets Liquid Inv. Portfolio 4,652,782 1.70JO Hambro Japan Fund 4,393,902 1.60Close Finsbury Far East Equity Fund 4,270,413 1.56BlueBay European Credit Opportunity Fund 4,107,086 1.50Orbis Sicav - Japan Equity 3,782,058 1.38Aberdeen Global Asia Pacific Fund 3,725,086 1.36ARC Capital Holdings Ltd 3,262,537 1.19BlackRock Agriculture Fund 3,166,103 1.16SR Global Fund - Asia 3,091,116 1.13Pacific Alliance China Land Ltd 3,045,000 1.11Finsbury Growth & Income Trust Plc 2,665,243 0.97Jupiter European Opportunity Trust Plc 2,602,292 0.96Top twenty holdings 243,267,614 88.79Other holdings (30) 29,566,520 10.79Cash 1,152,283 0.42TOTAL (50) 273,986,417 100.00 ASSET CLASS ALLOCATION as at 31st December 2007 Total Portfolio (including Cash) - US$273,986,417 %Liquidity fund 56.6Hedge Funds 10.9Long Only 18.8Private Equity 7.7High Yield 3.2Real Assets 2.8 GEOGRAPHICAL DISTRIBUTION as at 31st December 2007 Total Portfolio (including Cash) - US$273,986,417 %Liquidity Funds 56.6Far East 8.6Emerging Markets 7.5United Kingdom 7.2Global 7.1Continental Europe Eu Ex Uk 5.4United States 4.0Japan 3.6 INVESTED AND COMMITTED PORTFOLIO (excluding Liquidity funds and cash) - US$118,937,074 %Far East 19.8Emerging Markets 17.3United Kingdom 16.6Global 16.4Continental Europe Eu Ex Uk 12.4United States 9.1Japan 8.4 Portfolio activity New Investments During the year, there were purchases worth approximately US$18m (excludingliquid funds). Eight new investments were made in 2007: ARC Capital HoldingsLtd, BlackRock Agriculture Fund, Pacific Alliance China Land Ltd, Prusik AsiaFund, RAB Special Situations Company Ltd, Summit Germany Ltd, Tau Capital Plcand Vietnam Opportunity Fund Ltd. An additional investment was made to thelong-term holding in Merrill Lynch World Mining Trust Plc. Details of the newinvestments are as follows: ARC Capital Holdings Ltd is an AIM-traded private equity Fund investing in theChinese consumer and retail sectors. The Fund will seek to invest, generallythrough significant minority stakes, in opportunities which have clear marketscalability and potential near term IPO activity to enhance exit options. The BlackRock Agriculture Fund invests across the spectrum of agriculturalrelated equities, soft commodity futures and agricultural property. Demographicshifts, industrialisation, and competing land-use claims for biofuels are thedrivers behind current momentum in the sector after decades of weak profits andfalling real prices. Pacific Alliance China Land Ltd is an AIM-traded Fund. The Fund will invest inChinese real estate on a nationwide basis across residential, commercial andindustrial sectors with a focus on second and third tier cities. The Prusik Asia Fund is a long-only Fund exposed to the growth economies ofAsia. The Fund takes a focused and thematic approach. Summit Germany Ltd is an AIM-traded holding company, investing primarily inoffice, industrial and other commercial properties throughout Germany. RAB Special Situations Company Ltd is an AIM-traded feeder Fund with highexposure to natural resources and managed aggressively. The Manager is anadvocate of the Commodities Super-Cycle. Tau Capital Plc is an AIM-traded Fund with a mandate to invest in listed andunlisted companies, together with special situations primarily in Kazakhstan. Vietnam Opportunity Fund Ltd is a diversified AIM-traded Fund investing inpublic and private equities, together with selective real estate investments inthe rapidly expanding economy of Vietnam. New Investment Commitments In addition and in accordance with the portfolio's new mandate, fourcommitments, totalling US$16m, were made into alternative/illiquid investmentsin 2007: Ashmore Global Special Situations Fund IV LP, CLSA MezzAsia Capital LP,Hupomone Capital Fund LP and New York Life Investment Management Jacob BallasIndia Fund III LLC. Details of the new investments are as follows: Ashmore Global Special Situations Fund IV LP (US$5m commitment) is a GuernseyLimited Partnership, investing in mainly privately sourced and structured longerterm debt, equity and hybrid investments with event-driven value. The Fund has alife of seven years. CLSA MezzAsia Capital LP (US$3m commitment) is a Cayman Islands Exempted LimitedPartnership. The Fund provides mezzanine capital to pan-Asian mid-cap companiesand financial sponsors in leveraged buyout situations. Its focus is onestablished and non-cyclical businesses with stable cash flow. The Fund has alife of ten years. Hupomone Capital Fund LP (US$3m commitment) is a Cayman Islands Exempted LimitedPartnership. The Fund provides growth capital to invest in scalable high-growth,mid-market unlisted companies in the manufacturing and service industries inChina. The Fund seeks to invest in sector leaders and will target growthindustries such as healthcare, energy, environment and technology. The Fund hasa life of eight years. New York Life Investment Management Jacob Ballas India Fund III LLC (US$5mcommitment) is a Mauritius Public Limited Liability Company. The Fund makesinvestments in privately negotiated equity or equity related investments inunlisted Indian companies, following three key themes: investment demand drivenby infrastructure and capital goods, domestic consumer spending and competitiveglobal sourcing of goods and services from India. The Fund has a life of tenyears. Outlook The early weeks of 2008 have seen some of the sharpest market falls for adecade. At the end of January 2008, the MSCI World Index was 17% below its peakin October 2007. Deleveraging and rapidly rising risk aversion together withfears that the Western World and ultimately the global economy are tipping intorecession have resulted in a very jittery stock market. As ever at times likethis, the great and the good of the investment guru industry bid to outdo eachother with their pessimism and bearishness. It seems inevitable that many keyeconomies such as the US, UK, Europe and Japan will experience slower growth in2008, and that a weaker housing market will cause consumers to retrench. It isalso true that downside risks have increased and that the potentialvulnerability of the financial system is clearly evident. Against this we must note the aggressive actions of the Federal Reserve toachieve monetary reflation. This may take time to work through the system asbanks repair battered balance sheets, but clearly shows that the US FederalReserve thinks there is room to manoeuvre. Many bearish commentators felt thatgiven the level of energy and food prices together with the weakness of theDollar, the US Federal Reserve would feel they had insufficient leeway to easepolicy. This does not appear to be the case as yet. As far as theinterconnectedness of the global economy is concerned, the market adage "whenAmerica sneezes the world catches a cold" may need revising. This isparticularly true in the case of the Emerging Markets of Asia, which have been along-standing area of emphasis for the portfolio. Reduced demand, from the USwill obviously have a major impact on Asia's export industries and growth willslow. However, domestic demand should remain more robust during this slowdown.Savings rates are high; there is little leverage in the system; and there aremassive ongoing infrastructure projects occurring throughout Asia that will notbe affected one way or the other by the US. Confidence in the long-term outlook for Asia and the Emerging Markets isreflected in the positioning of portfolio. Combined they make up over 37% of theinvested portfolio. The next largest weighting is in UK which has benefited fromsustained strong performance from the portfolio's largest holding Lansdowne UKEquity Fund. Returns in Europe have been boosted by the Euro's strength againstthe Dollar. Investing in Japan continues to be a frustrating business. Domesticpolicy in Japan appears inept to an outsider and Japan Inc. is clearly tied tothe fortunes of the world economy. While it is difficult to articulate ascenario which revitalizes the share market it is hard not to conclude that agreat deal of bad news is in the price. Valuations are lower than at any time inliving memory and dividends are creeping up and now exceed the rate on a 10-yearbond. Frustration in and of itself is not a good reason to sell shares. Relativeto the index the most striking difference in weightings is in the USA. Itaccounts for over half of the MSCI World Index, but is less than 10% of theinvested portfolio. The relative attractions of the US may be due somere-assessment, however, as a rapidly improving trade and budget account,together with a competitively priced currency and stimulative monetary policyset the scene for the next advance. The portfolio has generated an annualised rate of return in excess of 21% duringthe bull market since March 2003. This is significantly in excess of the meanlong-term return from equity investing. Reversion to the mean has a stronggravitational pull and it would be an act of folly to assume that such benignconditions would continue indefinitely for investors. After such a serioussetback in markets at the start of the year, anticipating more difficult andturbulent times ahead is an inevitable consequence. Two of the major props ofthe strong market environment of the last five years, namely an insatiable USconsumer and abundant credit, appear to have gone into hibernation. However, asever with stock market investing the most important piece of analysis isassessing what has been discounted in share prices. If history is any guide thenmarkets have already experienced three quarters of the downside of a typicalbear market. In terms of duration, however, the process is probably less thanthe half way through. Inevitably, patience will be tested. There are goodreasons though to resist the gospel of bearishness. Despite the good performanceof equities as an asset class, valuations have stayed in touch with underlyingcorporate earnings growth. Abundant credit created many asset bubbles but bluechip equities were never at the vanguard of excess. The quoted corporate balancesheet is not overleveraged and new sources of demand such as Sovereign WealthFunds are highlighting the long-term strategic value that down marketsinevitably create. Time is more important than timing in investment and the moreadverse sentiment becomes the more opportunity increases. The current weak market environment is providing many opportunities for theInvestment Manager to implement its mandate at more attractive levels than wouldhave been the case in 2007. Since year end, the Investment Manager has beenactive in exploiting the recent sell off in global markets. In 2008, as at midFebruary, the portfolio had invested in four new positions (Aberforth SmallerCompanies Trust Plc, BlackRock Middle East & North Africa Opportunities Fund,Gazprom ADR and Jupiter Financial Opportunities Fund), made one switch (fromAshmore Emerging Markets Liquid Investment Portfolio to Ashmore Local CurrencyDebt Portfolio) and made additional investments into six existing positions(BlackRock Agriculture Fund, Finsbury Growth & Income Trust Plc, Investec GlobalStrategy Fund Ltd - Global Energy Fund, Jupiter European Opportunity Trust Plc,Merrill Lynch World Mining Trust Plc and Prusik Asia Fund). Ocean Wilsons Holdings Limited Consolidated income statement for the year ended 31 December 2007 2007 2006 Notes US$'000 US$'000 Revenue 404,046 334,109 Raw materials and consumables used (40,464) (53,886) Employee benefits expense 4 (126,067) (83,225) Depreciation & amortisation expense (19,066) (15,100) Other operating expenses (164,760 (125,247 Profit on disposal of property plant and equipment 4,819 435 Profit on disposal of joint venture - 2,965 Release of surplus on acquisition of interest in - 1,433 subsidiary Share of loss of associate - (51) Operating profit 58,508 61,433 Investment revenue 5 27,101 11,196 Other gains and losses 6 11,700 11,433 Finance costs 7 (7,566) (6,414) Profit on sale of minority interest 11 213,667 - Profit before tax 303,410 77,648 Income tax expense 8 (25,723) (20,765) Profit for the year 277,687 56,883 Attributable to: Equity holders of parent 258,065 56,077 Minority interests 19,622 806 277,687 56,883 Earnings per share Basic and diluted 10 729.8c 158.6c Ocean Wilsons Holdings Limited Consolidated balance sheet as at 31 December 2007 2007 2006 US$'000 US$'000 Non-current assets Goodwill 13,132 13,132 Other intangible assets 2,042 2,053 Property, plant and equipment 252,113 175,785 Deferred tax assets 12,713 8,289 Available for sale investment - 5,346 Other non-current assets 11,121 7,809 291,121 212,414 Current assets Available for sale investment 6,466 - Inventories 7,379 7,061 Trading investments 272,834 73,192 Trade and other receivables 69,301 54,413 Cash and cash equivalents 227,641 62,599 583,621 197,265 Total assets 874,742 409,679 Current liabilities Trade and other payables (85,625) (54,223) Current tax liabilities (766) (1,944) Obligations under finance leases (869) (581) Bank overdrafts and loans (14,720) (14,945) Derivative financial instruments - (782) (101,980) (72,475) Net current assets 481,641 124,790 Non-current liabilities Bank loans (134,744) (95,216) Deferred tax liabilities (11,035) (9,336) Provisions (12,484) (5,913) Obligations under finance leases (1,441) (1,098) (159,704) (111,563) Total liabilities (261,684) (184,038) Net assets 613,058 225,641 Capital and reserves Share capital 11,390 11,390 Retained earnings 419,080 173,305 Capital reserves 29,779 25,973 Investment revaluation reserve 2,341 2,381 Translation reserve 16,217 8,762 Equity attributable to equity holders of the parent 478,807 221,811 Minority interests 134,251 3,830 Total equity 613,058 225,641 Ocean Wilsons Holdings Limited Statement of changes in Equity as at 31 December 2007 Attributable Investment to equity Share Retained Capital revaluation Translation holders of Minority Total capital earnings reserves reserve reserve the parent interests equity US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Balance at 1 January 2006 11,390 126,331 23,942 1,856 6,538 170,057 1,313 171,370Gains on available for - - - 525 - 525 - 525sale investment Currency translation - - - - 2,224 2,224 187 2,411adjustment Profit for the period - 56,077 - - - 56,077 806 56,883Total income and expense - 56,077 - 525 2,224 58,826 993 59,819for the period Dividends - (7,072) - - - (7,072) - (7,072)Acquisition of minority - - - - - 1,524 1,524interest Transfer to capital - (2,031) 2,031 - - - - -reserves Balance at 1 January 2007 11,390 173,305 25,973 2,381 8,762 221,811 3,830 225,641Gains on available for - - - (40) - (40) - (40)sale investment Currency translation - - - - 7,455 7,455 655 8,110adjustment Profit for the period - 258,065 - - - 258,065 19,622 277,687Total income and expense - 258,065 - (40) 7,455 265,480 20,277 285,757for the period Dividends - (8,484) - - - (8,484) (877) (9,361)Disposal of minority - - - - - - 111,021 111,021interest Transfer to capital - (3,806) 3,806 - - - - -reserves Balance at 31 December 11,390 419,080 29,779 2,341 16,217 478,807 134,251 613,0582007 Ocean Wilsons Holdings Limited Cash flow statement for the year ended 31 December 2007 2007 2006 Note US$'000 US$'000 Net cash inflow from operating activities 12 56,222 37,239 Investing activitiesInterest received 16,896 5,922Dividends received from associate - 327Dividends received from trading investments 1,186 915Proceeds on disposal of trading investments 19,229 17,280Income from underwriting activities 2,072 -Proceeds on disposal of property, plant and equipment 8,700 2,144Purchases of property, plant and equipment (92,349) (42,231)Proceeds on investment in an associate - 49Net cash inflow arising from acquisition of subsidiary - 1,723Purchases of trading investments (207,171) (14,476)Net cash inflow arising on disposal of minority interest 11 324,688 -Net cash inflow arising on disposal of joint venture - 3,464Net cash used from/(in) investing activities 73,251 (24,883) Financing activitiesDividends paid 9 (8,484) (7,072)Dividends paid to minority shareholders in subsidiary (612) -Repayments of borrowings (16,663) (16,099)Repayments of obligations under finance leases (633) (3,421)New bank loans raised 54,882 20,955(Decrease)/increase in bank overdrafts (766) 640Net cash from/(used) in financing activities 27,724 (4,997) Net increase in cash and cash equivalents 157,197 7,359 Cash and cash equivalents at beginning of year 62,599 50,881 Effect of foreign exchange rate changes 7,845 4,359 Cash and cash equivalents at end of year 227,641 62,599 Ocean Wilsons Holdings LimitedPreliminary Announcement Notes to the Preliminary Announcement 1. Basis of Accounting The financial statements have been prepared on the historical cost basis, exceptfor the revaluation of financial instruments. The accounting policies appliedare consistent with those set out in the Group's 2006 Annual Report. 2. Basis of Preparation The financial information set out in this announcement does not constitute theGroup's statutory financial statements for the years ended 31 December 2007 or2006, but is derived from those accounts. The auditors have reported on thoseaccounts and their reports were unqualified. Whilst the financial information included in this preliminary announcement hasbeen prepared in accordance with International Financial Reporting Standards(IFRSs), this announcement does not itself contain sufficient information tocomply with IFRSs. 3 Business and geographical segments Business segments For management purposes, the Group is currently organised into seven operating activities; towage, port terminals, ship agency, offshore logistics, investment and non-segmented activities. These divisions are the basis on which the Group reports its primary segment information. Segment information relating to these businesses is presented below. 2007 Non Port segmented Towage terminals Ship Offshore Logistics Investment activities Elimination Consolidated agency Year Year Year Year Year Year ended Year ended Year ended Year ended ended ended ended ended ended 2007 2007 2007 2007 2007 2007 2007 2007 2007 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Revenue 146,838 148,995 20,392 10,710 69,052 - 8,059 - 404,046 Intersegment - - - - - - 66,949 (66,949) - sales 146,838 148,995 20,392 10,710 69,052 - 75,008 (66,949) 404,046 Result Segment result 45,388 40,825 2,946 1,840 4,568 (2,596) (34,463) - 58,508 Intersegment - - - - - - 4,033 (4,033) - result 45,388 40,825 2,946 1,840 4,568 (2,596) (30,430) (4,033) 58,508 Investment - - - - - 2,603 24,498 - 27,101 revenue Other gains - - - - - 11,700 - - 11,700 and losses Finance costs (2,752) (2,464) (23) (1,313) (412) - (602) - (7,566) Profit on sale - - - - - - 213,667 - 213,667 of minority interest Profit before 42,636 38,361 2,923 527 4,156 11,707 207,133 - 303,410 tax Tax (25,723) Profit after 277,687 tax Other information Capital (21,082) (26,266) (849) (41,965) (1,582) - (840) - (92,584) additions Depreciation (6,480) (6,724) (348) (2,618) (714) - (2,182) - (19,066) and amortisation Balance Sheet Assets Segment assets 121,422 171,027 5,682 77,417 18,289 275,907 204,998 - 874,742 Liabilities Segment (73,886) (59,454) (7,983) (73,904) (9,307) (1,967) (35,183) - (261,684) liabilities 2006 Non Port segmented Towage terminals Ship Offshore Logistics Investment activities Elimination Consolidated agency Year ended Year ended Year Year Year Year ended Year ended Year ended activities ended ended ended 2006 2006 2006 2006 2006 2006 2006 2006 2006 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Revenue 118,817 127,436 17,778 8,356 49,250 - 12,472 - 334,109Intersegment - - - - - - 18,489 (18,489) -sales 118,817 127,436 17,778 8,356 49,250 - 30,961 (18,489) 334,109Result Segment 31,363 39,391 8,743 1,102 4,186 (2,131) (21,170) - 61,484result Share of - - (51) - - - - - (51)results of associates Intersegment - - - - - - 313 (313) -result Operating 31,363 39,391 8,692 1,102 4,186 (2,131) (20,857) -313 61,433profit Investment - - - - - 882 10,314 - 11,196income Other gains - - - - - 11,433 - - 11,433and losses Finance (2,346) (1,970) - (919) (200) - (979) - (6,414)costs Profit 29,017 37,421 8,692 183 3,986 10,184 (11,522) - 77,648before tax Tax (20,765)Profit after 56,883tax Other information Capital (7,848) (14,221) (519) (15,680) (1,143) - (3,462) - (42,873)additions Depreciation (5,498) (5,430) (573) (2,138) (715) - (746) - (15,100)and amortisation Balance Sheet Assets Segment 103,133 132,893 8,216 43,063 11,173 82,392 28,809 - 409,679assets Interest in - - - - - - - - -associates Consolidated 409,679total assets Liabilities Segment (64,095) (46,268) (7,667) (42,039) (3,548) (2,374) (18,047) (184,038)liabilities Finance costs and associated liabilities have been allocated to reporting segments where interest costs arise from loansused to finance the construction of fixed assets in that segment. Investment revenues arising on bank balances held in Brazilian operating segments, including foreign exchange on cash, has not been allocated to the business segment as cash management is performed centrally by the corporate function. In 2006 the profit on disposal of the Groups interest in WR Operadores Portuarias Ltda and the release of surplus on acquisition of Brasco was recognised in port operations. Non-segmented activities include Shipyard, Dredges, and unallocated corporate costs, assets and liabilities. Geographical Segments The Group's operations are located in Brazil, Bermuda, United Kingdom and Guernsey. All 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, analysed by the geographicalarea in which the assets are located. Additions to Carrying amount of property, plant and equipment segment assets and intangible assets Year ended Year ended 2007 2006 2007 2006 US$'000 US$'000 US$'000 US$'000 Brazil 449,174 326,730 92,584 42,873 Bermuda 422,435 80,884 - - Other 3,133 2,065 - - 874,742 409,679 92,584 42,873 4 2007 2006 Employee benefits expense US$'000 US$'000 Aggregate remuneration comprised Wages and salaries 90,050 64,473 Share based payment expense 12,611 212 Social security costs 21,677 17,704 Other pension costs 1,729 836 126,067 83,225 5 Investment income 2007 2006 US$'000 US$'000 Interest on bank deposits 16,896 5,922 Exchange gains on cash 7,845 4,359 Dividends from equity investments 1,186 915 Investment revenues from underwriting activities 1,174 - 27,101 11,196 6 Other gains and losses 2007 2006 US$'000 US$'000 Increase in fair value of trading investments held at year end 11,639 8,335 Profit on disposal of trading investments 61 3,098 11,700 11,433 7 Finance costs 2007 2006 US$'000 US$'000 Interest on bank overdrafts and loans 6,416 5,467 Exchange gain on foreign currency borrowings (1,075) (792) Interest on obligations under finance leases 313 489 Total borrowing costs 5,654 5,164 Derivative costs 412 1,225 Other interest 1,500 25 7,566 6,414 Derivative costs represent the settlement of derivative contracts and the movement in the fair value of derivativesduring the year. 8 Taxation 2007 2006 US$'000 US$'000 Current Brazilian taxation Corporation tax 21,018 14,689 Social contribution 8,055 5,970 Total Brazilian current tax 29,073 20,659 UK corporation tax 240 - Total current tax 29,313 20,659 Deferred tax Charge for the year in respect of deferred tax liabilities 11,760 2,382 Credit for the year in respect of deferred tax assets (15,350) (2,276) Total deferred tax (3,590) 106 Total taxation 25,723 20,765 9 Dividends 2007 2006 US$'000 US$'000 Amounts recognised as distributions to equity holders in the period: Final dividend paid for the year ended 31 December 2006 of 20.0c (2005: 18.0 c) 7,072 6,365 per share Interim dividend paid for the year ended 31 December 2007 of 4.0c (2006: 2.0c) 1,412 707 per share 8,484 7,072 Proposed final dividend for the year ended 31 December 2007 of 36.0c (2006: 12,731 7,072 20.0c) per share The proposed final dividend of 36.0 cents per share will be paid on the 16 May 2008, to shareholders on the register at close of business on 11 April 2008 If approved by shareholders at the annual general meeting to be held on 30 April 2008. 10 Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: 2007 2006 Earnings US$'000 US$'000 Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent. 258,065 56,077 Number of shares Weighted average number of ordinary shares for the purposes of basic and 35,363,040 35,363,040 diluted earnings per share 11 Disposal of minority interest On 30 April 2007, the Group sold a 37.11% minority interest in Wilson Sons Limited as part of the initial public offering of that company. On 31 May 2007, the Group sold a further 4.64% minority interest. The cash consideration after transaction costs received for the total 41.75% minority interest in Wilson Sons Limited was US$ 324.7 million. Gross proceeds 348,678 Less costs of disposal (23,990) Net proceeds 324,688 Net proceeds received by Ocean Wilsons Holdings Limited 205,615 Net proceeds received by Wilsons Sons Limited 119,073 Total 324,688 Net assets sold Book value US$'000 Goodwill 4,873 Property, plant and equipment 69,579 Available for sale investments 1,974 Other non-current assets 4,110 Inventories 3,092 Trade and other receivables 23,540 Cash and cash equivalents 64,472 Trade and other payables (26,960) Bank overdrafts and loans (42,740) Other liabilities (3,496) Net assets disposed of at 30 April 2007 (proportional 98,444 37.11%) Net assets disposed of at 31 May 2007 (proportional 12,577 4.64%) Total net assets disposed of (proportional 41.75%) 111,021 Total consideration satisfied by cash 324,688 Gain on disposal 213,667 12 Year to Year to Notes to the cash flow statement 31 December 31 December 2007 2006 Reconciliation from profit before tax to net cash from operating US$'000 US$'000 activities Profit before tax 303,410 77,648 Less: investment revenues (27,101) (11,196) Less: other gains and losses (11,700) (11,433) Add: finance costs 7,566 6,414 Operating profit 272,175 61,433 Adjustments for: Depreciation of property, plant and equipment 18,751 14,822 Amortisation of intangible assets 315 278 Share based payment expense 12,611 - Gain on disposal of property, plant and equipment (4,819) (435) Profit on disposal of minority interest (213,667) - Profit on disposal of joint venture and associate - (2,965) Release of surplus on acquisition of interest in subsidiary - (1,433) Share of loss of associate - 51 Increase in provisions 6,571 1,596 Operating cash flows before movements in working capital 91,937 73,347 Increase in inventories (318) (392) Increase in receivables (13,915) (9,589) Increase/(decrease) in payables 18,556 (43) Increase in other non-current assets (3,312) (2,152) Cash generated by operations 92,948 61,171 Income taxes paid (30,081) (17,508) Interest paid (6,645) (6,424) Net cash from operating activities 56,222 37,239 13. Other information Additional copies of this announcement can be obtained from the Company'sregistered office, Clarendon House, Church Street, Hamilton, Bermuda or from theCompany's UK transfer agent, Capita Registrars Group Plc, The Registry 34Beckenham Road, Beckenham, Kent BR3 4TU. Address for dividend currency election Ocean Wilsons Dividend election Capita RegistrarsThe Registry34 Beckenham RoadBeckenhamKent, BR3 4TU This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ocean Wilsons