27th Oct 2005 13:57
Ocean Wilsons Holdings Ld27 October 2005 Chairman's Interim Statement for Ocean Wilsons Holdings Limited Accounts and results The first half of the year has seen good revenue growth compared to the sameperiod last year. Revenue increased by 32% to US$ 123.8 million (2004: US$93.8million) with increases in most key businesses. As a result of changes inthe sales mix and the appreciation of the $Real, operating margins were slightlydown. Nevertheless Group operating profit improved 23% to US$19.0 million (2004:US$ 15.4 million). The towage business continued to perform strongly. Towage revenue increased 14%in US Dollar terms driven by an increase in the number of vessels attended andtowage support for salvage operations although operating margins were adverselyaffected by the appreciation of the $Real against the US Dollar. The shipyardgenerated significant revenue in the period, with work continuing on themodernisation and conversion of the platform supply vessels for Delba Maritimaand Companhia Brasileira de Offshore (CBO). The Tugboats Haris and Cetus werecompleted at our shipyard as part of our ongoing tug fleet renewal programme. The ship agency division's turnover increased 26% in US Dollar terms compared tothe same period last year due to higher volumes and pricing adjustments. In Tecon Rio Grande volumes were up 11% at 311,901TEUs (Twenty foot equivalentunits), (2004: 280,015 TEUs). The expansion of Tecon Rio Grande commenced inFebruary with the signing of a contract to deliver two new super post panamaxcranes in March 2006; construction of the new berth is forecast to begin inearly 2006. Project finance of US$16.2 million for the project is being providedby the International Finance Corporation (IFC), a member of the World Bank. Revenue at Tecon Salvador grew 54% over first half 2004, influenced by growth inhigher priced ocean going traffic, the appreciation of the $Real and increasedvolumes. Investment revenues in the first half of 2005 were US$ 11.3 million, comparedwith US$ 4.2 million in the first half of 2004. Higher investment revenueresulted mainly from increases in the fair value of the investment portfolio,exchange gains on cash and trading investments and improved income from ourunderwriting subsidiary at Lloyds. Investment revenue will remain sensitive tomovements in the US Dollar /$Real exchange rate. Finance costs amounted to US$3.1 million (2004: US$4.3 million) benefiting fromexchange gains on the US Dollar borrowings held by $Real functional currencybusinesses, principally Tecon Salvador and Dragaport. Profit before taxation was US$27.8. million (2004: US$17.2 million) reflectingthe higher operating profit and investment revenues. Earnings per share based onordinary activities after taxation and minority interests were 54.1cents (2004:27.0cents). Exchange rates The $Real appreciated 12% against the US Dollar from 2.66 at 1 January 2005 to2.35 at the period end. Strategic review In September 2005 the Board of Ocean Wilsons Holdings Limited announced that ithad concluded the review of its strategic options in relation to the Company'sBrazilian operations and had decided to continue to remain focused on itscurrent operations and to invest in their future development. The acquisition of a further 33% equity interest in Tecon Rio Grande S.A.announced in August 2005 for $Real 55.5 million, approximately US$23.7 millionis consistent with the Board's strategy and strengthens the Company's positionin the growing container terminal market in Brazil. For the six months ended 30June 2005 Tecon Rio Grande was consolidated 100% with a 33% minority interest. The Board believes that the strength of our Brazilian business continues topresent exciting opportunities for future growth and remains committed tocreating long term value for shareholders. Dividend The board has resolved that an interim dividend of 2.00cents per share (2004:2.00 cents per share) be paid on 30 November 2005 to shareholders on theregister at close of business on 11 November 2005. As previously stated futuredividend payments will be determined by the Board taking into consideration allaspects of the Group's business, but primarily profitability and free cash flow. Cash flow and capital expenditure Net cash inflow from operating activities was US$10.2 million in the first sixmonths of 2005 compared with US$ 7.4 million in the same period last year,reflecting the improved operating result and normal working capital movements.Capital expenditure in the period amounted to US$18.9 million (2004: US$ 6.6million), the major elements being expenditure on tug construction and equipmentfor the expansion of Tecon Rio Grande. At 30 June 2005 Group debt was US$99.6million (31 December 2004: - US$ 99.7 million). Investment Portfolio At 31 August 2005 the investment portfolio (including cash under management ofUS$3.1 million) held outside Brazil was approximately US$65.1 million, a gain of4.7% since year end. Balance sheet Equity increased from US$ 147.4 million at the beginning of the year to US$167.3 million mainly due to the profit in the period less the dividend inrespect of 2004 which was approved and paid in the first half of 2005. At 30June 2005, the Group's net assets amounted to US$ 167.3 million (31 December2004: - US$ 147.4 million). This is the equivalent of $4.73 per share (31December 2004: - $4.17). Net assets located in Brazil account for $3.13 (31December 2004: - $2.64) and net assets outside Brazil $1.60 (31 December 2004: -$1.53 cents). International Financial Reporting Standards The financial information contained in this interim report, including allcomparatives, has been prepared in accordance with International FinancialReporting Standards ("IFRS") in place of UK GAAP. Further details are given inthe IAS interim restatement available on the Company's website and released tothe London and Bermuda stock exchanges. The Group also published financialinformation in accordance with IFRS for the year ended 31 December 2004 on the11 October 2005. IFRS have had and will continue to have a significant impact on the Group'saccounts and I encourage all shareholders to read the details contained in thesenews releases. Future Prospects The operating results for the third quarter are marginally down on the sameperiod in 2004 although we remain positive. The Groups results remain sensitiveto movements in the $Real exchange rate. J F Gouvea Vieira26 October 2005 Ocean Wilsons Holdings Limited Preliminary Announcement At the board meeting held today the following announcement of the unauditedresults of the Company and its subsidiary companies for the six months ended 30June 2005 was approved by the directors. Consolidated Income Statement for the six months ended 30 June 2005 Unaudited Unaudited Audited six months six months year to to 30 June to 30 June 31 December 2004 2005 2004 US$'000 US$'000 US$'000 Notes Revenue 123,849 93,762 217,713 Raw materials and consumables used (16,924) (8,819) (27,027)Employee benefits expense (31,237) (23,636) (56,501)Depreciation & amortisation expense (6,363) (5,523) (11,523)Other operating expenses (50,368) (40,425) (89,056)Operating profit 18,957 15,359 33,606 Share of profit of associate 201 - 515Investment revenues 11,295 4,209 18,931Finance Costs (3,117) (4,331) (6,499)Profit on disposals of fixed assets 515 1,960 1,635 Profit before tax 27,851 17,197 48,188 Income tax expense 2 (6,697) (7,031) (13,926) Profit for the period 21,154 10,166 34,262 Attributable to:Equity holders of parent 19,116 9,546 31,599Minority Interests 2,038 620 2,663 21,154 10,166 34,262 Earnings per share Basic and diluted 54.1c 27.0c 89.4c Ocean Wilsons Holdings Limited Consolidated Balance Sheet as at 30 June 2005 Unaudited Unaudited Audited as at as at as at 30 June 2005 30 June 2004 31 December 2004 US$'000 US$'000 US$'000Non Current Assets Intangible assets 2,470 1,084 2,314 Property, plant and equipment 138,834 112,665 123,829 Deferred tax assets 17,503 8,616 12,598 Investments in associates 880 10 568 Available for sale investments 4,272 4,272 4,272 163,959 126,647 143,581Current Assets Inventories 5,492 4,218 5,031 Investments held for trading 59,015 50,952 57,938 Trade and other receivables 52,080 39,840 51,086 Cash and cash equivalents 64,463 55,061 70,915 181,050 150,071 184,970 Total Assets 345,009 276,718 328,551 Current liabilities Trade and other payables (45,551) (32,685) (49,283) Current tax liabilities (6,862) (5,093) (10,504) Obligations under finance leases (3,553) (3,224) (3,034) Bank overdrafts and loans (14,947) (14,716) (13,502) (70,913) (55,718) (76,323) Net current assets 110,137 94,353 108,647 Non-current liabilities Bank loans (84,638) (84,120) (86,171) Deferred tax liabilities (18,462) (10,477) (13,765) Provisions (1,716) (1,444) (1,733) Obligations under finance leases (2,014) (3,742) (3,132) (106,830) (99,783) (104,801) Total liabilities (177,743) (155,501) (181,124) Net assets 167,266 121,217 147,427 Capital and reserves Share capital 11,390 11,390 11,390 Retained earnings 120,933 80,248 101,137 Capital reserves 16,077 22,665 23,122 Revaluation reserve 1,353 1,353 1,353 Hedging and translation reserve 6,329 (1,382) 1,406 Equity attributable to equity holders of the parent 156,082 114,274 138,408 Minority interests 11,184 6,943 9,019 Total equity 167,266 121,217 147,427 Ocean Wilsons Holdings Limited Consolidated Cash Flow Statement for the six months ended 30 June 2005 Unaudited Unaudited Audited six months to six months to year to 30 June 2005 30 June 2004 31 December 2004 US$'000 US$'000 US$'000 Net cash inflow from operating activities 10,165 7,430 29,142 Investing Activities Interest received 5,931 2,389 11,095 Dividends received from trading investments 381 314 597 Proceeds on disposal of trading investments 4,615 5,328 9,171 Income from underwriting activities 1,289 - 324 Proceeds on disposal of property, plant and 1,090 3,849 3,873 equipment Purchases of property, plant and equipment (18,943) (6,575) (20,190) Acquisition of investment in an associate - - (17) Purchases of trading investments (4,888) (11,587) (15,669) Acquisition of subsidiary - - (1,174) Net cash used in investing activities (10,525) (6,282) (12,000) Financing Activities Dividends paid (6,365) (5,658) (6,365) Repayments of borrowings (5,844) (5,267) (11,024) Repayments of obligations under finance leases (599) (527) (1,097) New bank loans raised 5,750 3,885 9,413 (Decrease)/increase in bank overdrafts (318) 10 289 Net cash used in financing activities (7,376) (7,557) (8,784) Net (decrease)/increase in cash and cash equivalents (7,736) (6,409) 8,358 Cash and cash equivalents at beginning of period 70,915 61,734 61,734 Effect of foreign exchange rate changes 1,284 (264) 823 Cash and cash equivalents at end of period 64,463 55,061 70,915 Exchange rates used Period EndBrazilian $Real to US Dollar 2.35 3.10 2.66Sterling to US Dollar 0.56 0.55 0.52 Ocean Wilsons Holdings Limited Consolidated Statement of Changes in Equity For the six months ended 30 June 2005 Transfer Total to Currency recognised Balance at Balance at retained translation Income for the 1 January earnings adjustment period Dividends 30 June 2005 2005 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Share Capital 11,390 11,390Retained earnings 101,137 7,045 19,116 (6,365) 120,933Capital reserve 23,122 (7,045) 16,077Investment revaluation reserve 1,353 1,353Hedging and translation reserve 1,406 4,923 6,329Attributable to equity holders of the 138,408 4,923 19,116 (6,365) 156,082parentMinority interests 9,019 127 2,038 11,184 Total 147,427 - 5,050 21,154 (6,365) 167,266 For the year ended 31 December 2004 Total Currency recognised Balance at Transfer translation Income for the Balance at 1 January to 31 December 2004 reserves adjustment period Dividends 2004 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Share Capital 11,390 11,390Retained earnings 76,360 (457) 31,599 (6,365) 101,137Capital reserve 22,665 457 23,122Investment revaluation reserve 1,353 1,353Hedging and translation reserve - 1,406 1,406Attributable to equity holders of the 111,768 1,406 31,599 (6,365) 138,408parentMinority interests 6,306 50 2,663 9,019 Total 118,074 - 1,456 34,262 (6,365) 147,427 For the six months ended 30 June 2004 Total Balance at Transfer Currency recognised Balance at 1 January to translation Income for the 30 June 2004 reserves adjustment period Dividends 2004 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Share Capital 11,390 11,390Retained earnings 76,360 9,546 (5,658) 80,248Capital reserve 22,665 22,665Investment revaluation reserve 1,353 1,353Hedging and translation reserve - (1,382) (1,382)Attributable to equity holders of the 111,768 (1,382) 9,546 (5,658) 114,274parentMinority interests 6,306 17 620 6,943 Total 118,074 - (1,365) 10,166 (5,658) 121,217 Notes to the Interim Accounts 1 In respect of the six monthly results, which are based on unaudited reports for management purposes. (a) The figures are not the Company's statutory accounts. (b) The auditors of the Company have not made any report thereon under section90(2) of the Bermuda Companies Act. (c) For accounting periods beginning on or after 1 January 2005, the Group isrequired to prepare consolidated financial statements in accordance withInternational Financial Reporting Standards ("IFRS") in place of UK GAAP. Forthese purposes, IFRSs comprise the Standards and Interpretations issued by theInternational Accounting Standards Board ("IASB") and Interpretations issued bythe International Financial Reporting Interpretations Committee ("IFRIC") thathave been, or are expected to be, endorsed by the European Union by 31 December2005. These interim financial statements, including all comparatives, havebeen prepared using the accounting policies consistent with all IFRS Standardsand Interpretations published by 31 December 2004 which are mandatory foraccounting periods beginning on or after 1 January 2005. These interim financialstatements are covered by IFRS 1"First time adoption of International FinancialReporting Standards" because they form part of the period included in theGroup's first IFRS financial statements for the year ended 31 December 2005. TheGroup has applied the exemption not to comply fully with InternationalAccounting Standard 34 "Interim Financial Reporting". The accounting policies used in the preparation of these interimfinancial statements are those set out in the news release "Restatement of 2004Results under International Financial Reporting Standards" published by thecompany on the 11 October 2005 and available on the Company's website. Thefigures to 31 December 2004 have been extracted from the "Restatement of 2004Results under International Financial Reporting Standards" and were subject to aprivate audit opinion. 2 Taxation Unaudited Unaudited Audited six months to six months to year to 30 June 30 June 31 December 2005 2004 2004 US$'000 US$'000 US$'000 UK tax 392 - -Overseas tax 6,305 7,031 13,926 6,697 7,031 13,926 3 Dividends The interim dividend of 2.00 cents per share will be paid on the 30 November2005, to shareholders on the register at close of business on 11 November 2005. 4 Reconciliation between UK GAAP and IFRS Reconciliation of profit under UK GAAP to profit under IFRS Unaudited Audited six months year to to 30 June 31 December 2004 2004 US$'000 US$'000 Profit under UK GAAP 7,996 25,583Unrealised gains taken to the Income Statement 1,492 6,351Adjustments to finance leases capitalised 666 1,826Change in functional currency 337 822Pre-operating expenses capitalised now expensed 73 131Borrowing costs previously capitalised now expensed (133) (62)Dry-docking expenditure capitalised (70) (80)Reclassification of subsidiary as joint venture (195) (309)Profit under IFRS 10,166 34.262 Reconciliation of shareholders equity under UK GAAP to shareholders equity underIFRS Unaudited Audited six months year to to 30 June 31 December 2004 2004 US$'000 US$'000 Total equity under UK GAAP 118,627 147,747 Dividend not recognised as liability until declared 707 6,365Adjustments to finance leases capitalised 1,261 2,630Dry-docking expenditure capitalised 1,412 1,403Fair value of available for sale investment 1,550 1,100Pre-operating expenses capitalised now expensed (297) (239)Reclassification of subsidiary as joint venture (488) (691)Borrowing costs previously capitalised now expensed (5,044) (4,973)Change of functional currency 3,487 (5,916) Total equity under IFRS 121,216 147,426 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, The Registry, 34 Beckenham Road,Kent BR3 4TU. 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