Preliminary Announcement

Ocean Wilsons Holdings Limited

Preliminary Announcement

Chairman's Interim Statement

Overview

Ocean Wilsons Holdings Limited ("Ocean Wilsons" or the "Company") is a Bermuda based investment holding company and through its subsidiaries operates a maritime services company in Brazil and holds a portfolio of international investments. The Company is listed on both the Bermuda and London Stock Exchanges. It has two principal subsidiaries: Wilson Sons Limited and Ocean Wilsons Investments Limited.

Wilson Sons Limited ("Wilson Sons") is an autonomous Bermuda Company listed on the Sao Paulo Stock Exchange (BOVESPA) and Luxembourg Stock Exchange. Ocean Wilsons holds a 58.25% interest in Wilson Sons, which is fully consolidated in the Group accounts with a 41.75% non-controlling interest. Wilson Sons is one of the largest providers of maritime services in Brazil. Wilson Sons activities include harbour and ocean towage, container terminal operation, offshore support services, logistics, vessel construction and ship agency.

Ocean Wilsons Investments Limited is a wholly owned Bermuda investment company. The company holds a portfolio of international investments.

Results

The first half of 2011 has been a challenging period for the Group. Revenue for the six months ended June 2012 at US$311.2 million was 8% lower than the comparative period in 2011 (US$338.9 million) although revenue in Brazilian Real ("Real") terms for the period was higher than the comparative period in 2011. The principal cause of the decline in revenue in US Dollars is the average US Dollar/Real exchange rate in the period (which is used to convert the income statement) which at 1.87 was 15% higher than the comparative period in 2011 (1.63). Approximately two thirds of the Group's revenue is denominated in Real.

In addition to the adverse currency effect, revenue at our port terminal business was impacted by reduced cabotage and transhipment volumes at Tecon Rio Grande and the end of the Brasco public port operation for Petrobras. Towage revenue increased 7% in US dollar terms benefitting from improved pricing. Additionally towage revenue in US Dollars terms is impacted less than our other businesses by movements in the US Dollar/Real exchange rate as approximately 75% of towage pricing is denominated in US Dollars. Offshore revenue increased reflecting the benefits of our expanded fleet and higher average daily rates due to new contracts and price renegotiations on some existing contracts in 2011. Logistics revenue declined due to the termination of some low margin operations and the impact of the weaker Real. Shipyard revenue in the period was marginally lower than the comparative period in 2011.

Operating profit for the period at US$23.6 million was US$19.2 million lower than the comparative period in 2011 (US$42.8million) with operating margins for the period falling to 7.6% versus 12.6% for the comparative period in 2011. Operating margins were adversely impacted by lower revenue at some businesses, increased employee expenses and depreciation and amortisation expense. Depreciation and amortisation in the period increased 18% to US$31.6 million from US$26.8 million in 2011 reflecting the investment undertaken by the Group in recent years in expanding our businesses. The majority of the Group's depreciation charge is denominated in US Dollars and not affected by movements in the average US Dollar/Real exchange rate.

Although the higher average exchange rate has a beneficial effect on our Real denominated costs when converted into US Dollars, employee expenses for the period increased US$6.0 million from US$121.9 million to US$127.9 million driven by higher headcount, collective labour agreements and an increased share based payment expense. Headcount rose at our towage and offshore businesses to crew our expanded fleet while shipyard and logistics headcount grew in preparation for the opening of our new shipyard in Guarujá and logistics centre in Sao Paulo. Collective labour agreements have been ahead of inflation driven by low unemployment and strong demand for skilled labour in Brazil. These factors combined with the fall in revenue in some business lines means employee expenses (excluding share based payment expense) as a percentage of revenue represented 39.9% in the period compared with 35.7% for the comparative period in 2011. The share based payment expense at US$3.7 million was US$2.9 million higher than 2011(US$0.8 million) due to the increase in the Wilson Sons share price.

Other operating expenses in the period decreased US$20.4 million (an 18% fall) to US$90.5 million (2011 US$110.9 million) principally due to the impact of the stronger average US Dollar.

Investment revenues in the period were US$1.2 million loss (2011 US$12.3 million gain). Higher interest on bank deposits of US$8.1 million (2011 US$5.3 million) was offset by exchange losses on cash and cash equivalents of US$10.9 million (2011 US$5.0 million gain) arising mainly from Real denominated cash balances due to the depreciation of the Real against the US Dollar in the period.

Other gains of US$1.8 million (2011 US$0.7 million loss) arise from the Group's portfolio of trading investments and reflect the profit realised on the disposal of trading investments in the period less the decrease in the fair value of trading investments held at period end.

Finance costs increased US$0.9 million to US$7.8 million for the period (2011 US$6.9 million) as a result of higher interest payments on increased borrowings used to fund capital expenditure.

Profit before tax of US$16.4 million is 66% lower compared to the first half 2011 (US$48.9 million) principally due to the decrease in operating profit and investment revenues.

The tax charge for the period at US$14.1 million was US$2.4 million lower than the comparative period in 2011, US$16.5 million. The effective tax rate in the period of 86% is higher than the comparative period in 2011 (34%) principally due to costs not deductible for Brazilian tax (share based payment expense US$3.7 million and exchange losses on cash and cash equivalents of US$10.9 million). Current tax in Brazil in the period fell by US$4.6 million to US$15.6 million (2011 US$20.2 million) due to lower taxable profits. There was a US$1.5 million deferred tax credit in the period (2011 US$3.7million credit). The deferred tax charge arising on the retranslation of non-current asset values caused by the depreciation of the Real against the US Dollar in the period was offset by deferred taxes credits arising from exchange losses on loans and unused tax losses. The Group recognised a deferred tax asset in the period of US$8.6 million in respect of unused tax losses from prior periods as there is now associated foreseeable future taxable profit streams.

Basic earnings per share for the period were 4.0 cents (2011 51.7 cents).

Depreciation

As part of the continuing review of the economic useful life of vessels, during the period the Group concluded a review on the remaining economic useful life of its fleet of tugboats and Platform Supply Vessels. Following the review the Group increased the economic life of our vessels from 20 years to be 25 years for all vessels built since 1986. Vessels built prior to 1986 which have received new motors are depreciated over periods from 30 to 35 years. As a result of these changes, the depreciation expense for the period is US$1.4 million lower at US$ 29.7 million. Had the change not occurred the depreciation charge would have been US$31.1 million.

Long term incentive plan

The final tranche of options issued under the Ocean Wilsons Holdings Limited scheme vested in April 2012. During the period all outstanding options under the scheme were exercised and the scheme has now terminated. The Wilson Sons Limited scheme remains in operation and at period end there were 3,800,260 outstanding phantom stock options. An accrual of US$17.5 million (2011 US$14.4 million) has been included in the accounts for benefits accruing under the plan.

Dividend

The Board has declared an interim dividend of 4.0 cents per share (2011: 4.0 cents per share) to be paid on 5 October 2012 to shareholders on the register at close of business on 7 September 2012.

Cash flow and debt

Cash flow from operations remains strong with net cash inflow from operating activities for the period up US$12.1 million to US$39.8 million compared with US$27.7million in the same period last year benefitting from positive inflows from working capital effects.

Capital expenditure in the period was U$24.6 million lower at US$78.8 million than the comparative period in 2011, ($103.4 million). This was mainly invested in the expansion of Tecon Salvador, the new shipyard in Guarujá and towage and offshore vessel construction. New loans raised in the period to finance capital expenditure were US$49.6 million and repayments on existing loans of US$14.6 million.

The Group's consolidated borrowings (including obligations under finance leases) at 30 June 2012 were US$528.5 million (31 December 2011 US$491.1 million). At 30 June 2012 the Group had US$125.8 million in cash and cash equivalents (31 December 2011 US$119.3 million).

Balance sheet

Equity attributable to equity holders of the parent decreased from US$506.2 million at 31 December 2011 to US$493.0 million at 30 June 2012 due to a negative currency translation adjustment of US$4.3 million and dividends paid in the period of US$10.3 million. Equity attributable to shareholders of US$506.2 million is the equivalent of US$13.94 per share (31 December 2011: US$14.31).

Investment Portfolio

The investment portfolio including cash under management, at 30 June 2012 amounted to US$223.2 million, a decrease of US$6.2 million since year end, principally due to a US$8.5 million capital redemption paid to the parent company Ocean Wilsons Holdings Limited in the period.

Wilson Sons

At the close of business on the 3 August 2012, the Wilson Sons share price was Real 30.50 resulting in a market value for the Ocean Wilsons holding of 41,444,000 shares (58.25% of Wilson Sons) of approximately US$622.7 million which is the equivalent to US$17.31 per Ocean Wilsons Holdings Limited share.

Exchange rates

The Group reports in US Dollars and has revenue, costs, assets and liabilities in both Brazilian Real and US Dollars. Therefore movements in the US Dollar/Real exchange rate can impact the Group both positively and negatively from period to period. In the six months to 30 June 2012, the Real depreciated 7% against the US Dollar from 1.88 at 1 January 2012 to 2.02 at the period end.

The main impacts from the appreciation of the Real against the US Dollar at period end were a net exchange loss of US$10.8 million (2011 US$4.7 million gain) on the Group's Real-denominated cash balances included in the income statement and a currency translation adjustment loss to net equity of US$7.5 million (2011 US$6.6 million gain). The average US Dollar/Real exchange rate in the period at 1.87 was 7% higher than the comparative period in 2011 (1.63).

Outlook

The Company's first half income has been negatively affected by a combination of depreciation of the Real against the US dollar, constrained cabotage and transshipment volumes, the end of the Petrobras public port operation in Rio de Janeiro, increased depreciation (which is US dollar denominated) and increased employee expenses from headcount for pre-operational hiring and share based payment expenses. In addition, the expansion of the Salvador container terminal and additional capacity at our shipyard in Guarujá previously forecast to be completed in the beginning of the second half of 2012 are now expected to be delivered in the fourth quarter of this year.

Historically the second half of the year is stronger in terms of performance and results for our Brazilian businesses. However, the uncertain economic environment and currency movements may still adversely impact the Group's full year results. These factors, combined with the Group's first half performance, means that it is likely that the outcome in terms of profit for the full year may fall significantly short of current market forecasts.

WILSON SONS LIMITED OPERATING REVIEW

We have summarised the following highlights from the Wilson Sons 2nd quarter 2012 earnings results released on 14 August 2012. References to "the Company" relate to its operations and consolidated financial position and performance. The full report is available on the Wilson Sons Limited website: www.wilsonsons.com:

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- Depreciation of the Brazilian Real in the quarter has negatively impacted net income

- Cabotage and transhipment Container terminal volumes constrained

- Offshore Vessel volumes higher on consistent Oil and Gas demand growth

Cezar Baião, CEO of Operations in Brazil stated;

"Wilson Sons has seen a challenging 2012 so far with a net loss of US$4.6 million for the quarter and year to date net income of US$1.9 million, negatively impacted by currency depreciation and the subsequent impact on deferred tax and monetary items.

Historically the second half of the year is stronger in terms of performance. However, the uncertain economic environment and currency movements may still adversely impact the Group's full year results. Against the backdrop of these challenges we continue our commitment to creating and sustaining value for all our stakeholders through our long term business model which includes projects such as the expansion of our Tecon Salvador container terminal and Guarujá II shipyard. With these and other important projects becoming operational at the end of the second half of 2012 our focus remains on expanding our capacity to service demand in International Trade and Oil & Gas. It is this long term focus combined with constant revision, adjustment and fine tuning that will allow us to overcome the challenges and continually improve efficiency and project deliverables. To this end, we are pleased to report increased cash generated by operations in the half year.

Despite an uncertain world economic backdrop, our experience in the Ports and Maritime services helps us to maintain a positive view on future market prospects as we continue to focus on delivering our Long Term Investment Plan."

Net Revenues

Revenues totalled US$311.2 million for the half year, 8.2% lower than the comparative period of 2011. The main impact is the devaluation of the Real against the US Dollar as approximately 65% of Wilson Sons' revenues are Real denominated. The Company´s costs and expenses were also lower as the company seeks a natural operating cash flow hedge by balancing total Real denominated revenues against total Real denominated costs. Currently approximately 90% of the Company's operating costs (excluding depreciation) are denominated in Real.

Port Terminals largely Real denominated revenues were negatively impacted by the depreciation of the Real, reduced cabotage in Rio Grande due to a fall in rice volumes, lower deep sea reefer volumes were affected by temporary interruptions to client production, reduction in Tecon Rio Grande transhipment volume as some ship-owners are now using their own terminals for this service. The end of the Brasco public port contract with Petrobras also negatively impacted total port terminals income.

Towage revenues are mostly originated in US Dollars (approximately 73%), and therefore are less affected by the devaluation of the Real. Revenues were up 1.7% when compared with 2Q11, and up 6% year to date against the comparative. Demand and differentiated prices for services to increasingly larger ships helped the revenues increase in this business segment.

Offshore Vessel volumes were higher on Oil and Gas demand, generating year to date revenue growth of 23.3% respectively.

Shipyard revenues are predominantly Real denominated (approximately 63%), which contributed to the 7.1% decline for the year to date against the comparative. Reduced raw materials processing also contributed to shipyard results in the quarter.

Logistics revenues are roughly 10% down due to the discontinuation of certain low-margin operations between 4Q11 and 2Q12.

Costs and expenses

Costs and expenses were lower than the previous year for both the quarter and year to date. Currently approximately 90% of the Company's costs (excluding depreciation) are denominated in Real, which in turn are positively impacted by the currency devaluation.

Personnel Expenses benefitted from the Real devaluation, however, the following events impacted the Quarter and year to date costs: Average headcount increase from 6,029 in 2Q11 to 6,464 in 2Q12, mostly due to growth in Towage, Offshore Vessels, and to pre-operational hiring of staff for the new Logistics Centre in Itapevi and Guarujá II shipyard. An increase in the provision for the Long-Term Incentive Plan ("LTIP") of US$ 3.1 million at period end.

Year to date towage costs were impacted by a one-off US$1.7 million charge due to a change in the accounting treatment for Towage fuel inventory.

Higher depreciation and amortisation costs are a direct result of a larger asset base in the Towage and Offshore fleets. During the period following expert internal appraisal and external benchmarking the useful life of the company´s Towage and Offshore vessel fleets changed from 20 years to a new policy of 25 years for all new vessels built post 1986, with assets prior to this date depreciated over periods of 30 to 35 years depending on specification and factors such as remotorisation. This change generated a positive impact of US$1.4 million for the depreciation charge in the period.

EBITDA, Adjusted EBITDA, and Operating Profit

Quarterly and year to date EBITDA were lower by 12.2% and 21.0% respectively, mainly due to the following events. Weaker Container Terminal results with Rio Grande Cabotage and Transhipment volumes down. End of the Petrobras public port operation in Rio de Janeiro, which represented 30% of Brasco's EBITDA in the first half of first half 2011. US$ 3.1million negative impact in the Long Term Incentive Plan which directly affects Personnel Expenses across the Company's businesses. One-time costs related to the discontinuation of certain low-margin logistics operations.

Capital expenditure

Tecon Salvador's expansion, the new Guarujá II shipyard, and new Offshore and Towage vessels are the major contributors to the year to date capital expenditure.

Total capital expenditure of US$87.7 million is 16.3% lower against the comparative period due to the following: The weaker Real exchange rate reducing the value of Real investments when converted to US Dollars, lower investment in new towage vessels as a large proportion of the renewal program has been completed, the timing of major expenditure items in the Guarujá II shipyard and Tecon Salvador expansion projects, and lower Logistics' capital expenditure as the comparative period included relevant investments for client in-house operations.

Debt and Cash Profiles

92.1% of total debt is long-term and 92.5% is denominated in US Dollars. 73.1% of borrowings are provided through the BNDES and Banco do Brasil, as agents for the Fundo da Marinha Mercante (FMM), to support the Offshore, Towage and Shipyard businesses. At period end, the Company's weighted average cost of debt was 3.7% per year.

Net debt totalled US$406.2 million, with debt service ratios benefitting from low average interest costs and long amortisation periods. The trailing twelve month Net Debt to EBITDA was 2.7x.

Cash, cash-equivalents, and short-term investments increased from the previous quarter to US$119.8 million. At the end of the quarter, 95% of this was Real denominated. Subsequent to the period end, US$20 million of Real denominated cash was converted and invested in US Dollars.

Corporate Costs

The Company's Corporate activities include head-office and group support functions together with costs not allocated to the individual business operations.

There was a slight improvement in the Company's Corporate Costs in the year to date. This was mostly due to the Real devaluation, as these expenses are predominantly denominated in Brazilian currency. End of period Corporate headcount fellas a number of internal projects were delivered during the period as scheduled.

Business Highlights

Container Terminals

Revenues were lower as a result of a devaluation of the Real since most terminal revenue is denominated in Real.

Container Terminal revenues of US$ 90.5 million year to date are down 18.8%, negatively impacted by falls in volumes.

EBITDA was similarly affected. Tecon Rio Grande's year to date cabotage full volumes are down 17.6% against the comparative with some particular constraint in rice volumes that have, subsequent to the quarter, shown signs of recovery. High stock levels in the destination of the Northeast contributed to the fall in the rice cabotage volumes. Lower rice prices also contributed to producers delaying sales Tecon Rio Grande's 2Q12 deep-sea volumes were affected by frozen chicken exports with temporary production interruptions within a client's operations.

Civil works related to the Tecon Salvador expansion continue to constrain growth of both:

storage revenues and secondary quay movement, with a negative impact on general cargo and cabotage volume that showed only marginal increase in the period.

Transhipment volumes fell as ship-owners have been migrating these lower-value cargo services to their own terminals since the middle of 2011.The more important higher-yielding import volumes remained strong at both terminals with increases in the year to date deep-sea full TEU movement.

Tecon Rio Grande and Tecon Salvador deep-sea volumes both benefited from a growth in exports. Tecon Rio Grande year to date deep-sea export and import full volumes were higher compared to 2011. Import volume in the first half included cargo highlights of steel, plastic, glass, rubber parts and accessories. During the quarter, Tecon Rio Grande broke its individual ship service productivity record, exceeding 121 movements/hour. 

Brasco

The end of the Petrobras operation in the public port of Rio de Janeiro in October 2011 was responsible for the drop in Brasco's revenues which contributed approximately 30% of Brasco EBITDA in the comparative period in 2011. The closing of the Briclog acquisition remains forecast for the final quarter of the year, as previously disclosed in April 2012.

Logistics

Logistics year to date EBITDA was hindered by one-time costs related to the discontinuation of certain low-margin operations at the end of 2011 and beginning of 2012. The focus remains concentrated on more profitable operations, such as our bonded-warehousing and logistics centres with the Itapevi (Sao Paulo) operation starting in July 2012. Itapevi achieved close to 30% capacity utilisation in its first month of operation. EADI Santo André continues to show positive growth. The new logistics centre in Suape (Pernambuco) is in the later stages of construction and expected to be operational by the end of the year.

Towage

Despite a slight drop in harbour manoeuvre volumes, revenues increased 7% Year to date as a result of differentiated pricing for larger ships with heavier average dead-weights. The towage business has faced minor challenges this year after heavy rainfall limited the promising grain season from arriving for export in ports across Brazil. EBITDA was 3.7% lower in the first half of 2012 mainly as a result of the US$1.7 million one-off inventory charge at the beginning of the year due to changes in the accounting treatment for fuel inventory.

Personnel expenses were also higher as a result of an 8% increase in Headcount in the year to date comparison, and the Long Term Incentive Plan ("LTIP).

Offshore Vessels

Year to date revenue improved 23.3% over the comparative period in 2011 as result of a larger fleet and higher average daily rates. Year to date EBITDA improved 66.6% benefiting from higher daily rates on new 4 year contracts for the vessels Albatroz and Gaivota as well as the start of operations for the vessel, Sterna. Three foreign-flagged AHTS (Anchor handling tug supply) vessels have been used to supplement the domestic fleet to provide general support to clients in Brazil with flag cover contracts.

Shipyard

Year to date revenues are down compared to 2011 mainly due to the weaker exchange rate as approximately 63% of the business' revenues are Real denominated. Year to date EBITDA is down due to margin efficiency in the comparative period and pre-operational expenses in the year relating to the Guarujá II shipyard.

PSV-Sterna was delivered in the period and PSV-Batuíra is expected to be launched in August 2012. By the end of 2013, another 4 PSVs are forecast to be delivered to WSUT. The Fugro contracted ROVSV is scheduled for completion in early 2014.

Shipping Agency

Revenues are up 27% as a result of higher overall volumes and a better average pricing.

EBITDA has shown healthy growth due to greater demand for agency services across the country. One highlight for the business in 2012 is a cargo management project to bring a cement plant from China to Brazil.

INVESTMENT PORTFOLIO

Hanseatic Asset Management LBG that manages the Groups investment portfolio reports at the period end as follows:

Market background

The second quarter of 2012 saw a reversal of much of the gains experienced in global equity markets during the first quarter. Within Developed Markets, the MSCI World (Developed) Index was +5.9% for the six months to 30 June, having fallen by 6.0% from its peak earlier in the year. North America was a notable strong performer, with the S&P 500 and the NASDAQ gaining 9.5% and 12.7% respectively. Over the first half, the European debt crisis continued to deteriorate with the MSCI Europe ex UK ending the period +1.9%, having fallen 11.7% from its 2012 peak. During the period, it became clear that the effects of the crisis could no longer be confined to Europe and the threat of contagion fuelled fears of a global slowdown, which impacted heavily on Emerging Markets. The MSCI Emerging Markets Index fell 12.0% from its 2012 peak, ending the period +3.9%. Within Emerging Markets, weak economic data in China triggered a sharp sell-off in Chinese equities and China related.

Several factors contributed to relative the relative resilience of the US economy, including a fall in the oil price which benefitted the consumer, strong US corporate earnings and a stabilisinghousing market. Telecommunication Services and Utilities outperformed as investors favoured economically defensive sectors. However, during the second quarter, economic data was much lessfavourable than the beginning of the year, with the last two job reports falling below expectations. In an attempt to sustain growth and supress long-term interest rates, the US government announced plans to extend "Operation Twist" in June, whereby $267bn of short-term Treasuries would be sold and the subsequent proceeds would be used to buy longer-dated paper.

Concerns over the viability of the Euro intensified with the failure of Greek politicians to form a coalition government in May. This led to concerns over whether a second election in June would result in a new government that would reject existing bailout agreements and subsequently lead to a disorderly Greek exit from the Euro. Spain has recently become the focal point of the crisis, following its inability to comply with stated deficit reduction targets. The cost of government borrowing soared by 18% during the quarter and has recently exceeded 7.5%. The deterioration of the Spanish banking sector was reflected in the downgrading of 28 Spanish banks by Moody's rating agency. Spanish unemployment hit record highs at 24%, making it the highest unemployment rate within the EU. The IBEX 35 of Spain was the worst performing Index out of the Developed Market indices, falling 19.1% over the first half of the year. Tension in the Eurozone eased slightly on 17 June, following an election victory for pro-austerity parties in Greece, which somewhat mitigated concerns of an imminent Euro break-up.

Despite the relative resilience of the German economy seen at the start of the year, the DAX lost 12.4% over the quarter, ending the first half of the year +6.2%. The CAC Index of France gained 2.2% over the period, having lost 8.5% over the second quarter. The decline was in part a result of Françoise Hollande's victory in the Presidential Elections and the perceived policy impact of France's first Socialist President in 17 years.

Within Emerging Markets, particular attention was cast on China which exhibited signs of faltering growth. The manufacturing PMI survey fell to a seven month low, whilst housing starts saw a 30% contraction. Import volumes failed to grow for the first time since the 2009 recession, raising fears of a "hard landing", which was reflected in weak commodity prices. These factors weighed heavily on Brazil which was the weakest performer of the BRICs in the first half of the year, with the Bovespa Index posting losses of 11.1%. India reported its slowest growth in a decade and the BSE Sensex Index fell 8.1% in the second quarter, ending the first half of the year +7.9%. The Rupee fell to an all-time low against the US Dollar in May on the back of significant net foreign outflows and was the worst performing currency amongst its Emerging Market peers. The RTS Index fell 2.3% over the period, with a 17.5% loss experienced in the second quarter, largely as a result of falling energy prices.

Much of the commodity spectrum experienced significant losses during the second quarter, following a strong first three months of the year. The European Brent Oil Index fell 9.8% over the first half, hitting its lowest point since February 2010. The Oil price ended the period at $104/barrel, down 22.8% since its 2012 peak. Gold posted modest gains of 2.2% to close the period at $1,597/ounce, 10.5% below its 2012 high of $1,785. Copper gained 1.1%, down 12.6% from its 2012 peak.

In a "flight to safety", government bond yields in many countries fell to multi-decade lows, further supported by a fear of global deflation. The ten year US treasury yield decreased from 1.9% to 1.6% and the UK ten year gilt yield fell from 2.0% to 1.7%. The Barclays Global Aggregate Corporate Bond Index posted a gain of 4.2% and the Barclays Global High Yield Index gained 7.7%. Overall, the US Dollar generally performed well against most freely traded currencies.

Note: All Index performance numbers are in US dollar terms, unless specifically stated in local currency terms.

Portfolio construction

The portfolio's net asset value at the first half of 2012 was $223.2m, which is comprised of four 'sub-portfolios':

i. Global Equities

ii. Private Assets (Fixed Life / Illiquid)

iii. Market Neutral Funds

iv. Bonds / Other

'Global Equities' $124.6m (55.8% of NAV) is comprised of holdings that are sensitive to stock market movements and may take the form of investments in open-ended funds, closed-ended listed funds (such as Investment Trusts), UCITS funds, long / short directional hedge funds as well as direct quoted equities. Global Equities also includes investments in 'Listed Real Assets' (e.g. property and natural resources) which are quoted on a stock market.

'Private Assets' $42.3m (19.0% of NAV) contains fixed life investments typically with lives of approximately ten years and often structured through commitments to Limited Partnership vehicles that make investments in private equity, private real assets (such as property and natural resources) and private debt (such as distressed debt and mezzanine financing). These investments offer access to longer cycle plays, often with lower correlation to public security markets. They also provide access to businesses at potentially lower valuations than in public markets and access to high quality management teams often not available through more liquid vehicles. Furthermore, phased drawdown of capital helps to eliminate market timing risk. The first commitment to Private Assets was made in 2007. 17 commitments (totalling $79.1m) have been made as at 30 June 2012. $49.4m has been drawn down, indicating that these investments are (collectively) at an immature stage of value realisation.

'Market Neutral Funds' $37.8 (16.9% of NAV) contains generally 'lower volatility' holdings in funds that engage in a variety of trading strategies across asset classes. Each market neutral fund has a different investment mandate and it is expected that their collective performance will not be dependent on the direction of global security markets. What they have in common is a focus on seeking to generate positive absolute returns and good downside protection in volatile markets. In addition, Market Neutral Funds act as a secondary backstop to cash in covering long term capital commitments - thus helping to avoid excessive cash drag (especially in the current environment of near-zero interest rates). They provide a better risk/reward allocation than other 'lower risk' investments such as investment grade bonds (where the current risk/reward offers an unattractive investment proposition).

'Bonds / Other' $18.5m (8.3% of NAV) - 'Bonds' are comprised of two constituents: (i) High Yield Bonds and (ii) Investment Grade Bonds. Returns may be generated from an increased capital value, coupons as well as currency exposure. High Yield Bonds $17.7m (7.9% of NAV) contains investments in Emerging Market (sovereign and corporate debt) and other Developed Market high yield corporate debt. Investment Grade Bonds (0% of NAV) contains investments in sovereign (government) bonds as well as corporate bonds with high credit ratings (typically at least 'BBB' as defined by Standard & Poor's). 'Other' is comprised of cash valued at $0.8m (0.4% of NAV).

Portfolio Performance

The portfolio generated a time weighted return of 1.6% in the first half of 2012, in line with the performance benchmark (2% in excess of the one year US Dollar LIBOR rate) with a c56% allocation to global equities.

In Developed Markets, relative performance was strongest in Europe (including UK) led by Jupiter European Opportunities Trust Plc +19.2%, whereas the EuroStoxx was down 1.7% over the period.

In Emerging Markets, relative performance was strongest in Latin America through holdings such as Findlay Park Latin American Fund +8.6%, against a negative backdrop of the Bovespa Index (of Brazilian equities) recording a loss of 11.1%. In Emerging Asia, there were a number of strong performances including from: VinaCapital Vietnam Opportunity Fund Ltd +16.7%, Prusik Asian Smaller Companies Fund +15.9%, Jupiter India Select Fund +8.2% and Aberdeen Global Asia Pacific Fund +8.2%. At the other end, holdings in China and Russia were affected by a negative environment for Chinese 'H' Shares and the RTS Index.

In terms of contribution to the overall portfolio performance, the top five contributors were:

PORTFOLIO ACTIVITY - for the Half Year to 30 June 2012

During the first half of 2012, there were total purchases of $26.8m and total sales of $36.7m.

Purchases

Instinct Dark Horse - is a long/short Japanese equities hedge fund utilising a fundamental trading strategy with a focus on catalysts and special situations.

CCI Technology Partners II - is a long/short technology hedge fund, investing across the technology sector, with a focus on North America.

NTAsian Discovery Fund - invests in Asian small and mid-cap equities with a particular focus on 'ASEAN' countries (e.g. Indonesia, Malaysia, Philippines, Singapore and Thailand).

BlackRock Mining Opportunities Fund - invests in a portfolio of mining equities with focus on mid-caps and companies in the exploration and development phase.

Equinox Russian Opportunities Fund - invests in a concentrated portfolio of thematic 'value' Russian equities. The manager may opportunistically raise cash to high levels.

BlueBay EM Corporate Alpha Fund - is a long/short credit hedge fund investing in (predominantly USD denominated) Emerging Market corporate debt.

VinaCapital Vietnam Opportunity Fund - an opportunistic addition to the existing holding on the back of improvements in the macroeconomic environment, purchased at a discount to net asset value in excess of 30%.

Prince Street Opportunities Fund - the position was increased following a rare redemption by another investor, which created a small amount of additional capacity in this hard-closed Fund.

Sales

There were sales totalling $36.7m during the first half of 2012.

Private Assets - Commitments

There were no new commitments to fixed life alternative assets in the first half of 2012.

Analysis of private assets (Fixed life / Illiquid)

Outstanding commitments of $29.0m are well covered by cash and investments in market neutral funds ($0.8m and $37.8m respectively).

MARKET OUTLOOK

In recent months, Developed Market government bond yields (with the exception of Southern Europe), commodities and equities have moved lower in lockstep, with fears of deflation and political uncertainty enabling investors to justify holding 'risk free' assets despite negative real interest rates. Leading economic indicators suggest that growth is likely to slow, with nine out of the G10 countries currently registering industrial PMI scores below the key 50 threshold. In particular, markets are yet to see any credible resolution to the concerns surrounding the European debt crisis, China's possible hard-landing and the US fiscal cliff.

In Europe, policy makers appear set to prolong their 'kicking the can down the road' strategy rather than facing up to the fundamental changes necessary to solve the innate structural deficiencies with the Eurozone. Recent partial bailouts in Spain have done little to solve these underlying issues. The European banking system remains paralysed, with lending to both business and consumers at exceptionally low levels.

Over the past months, indicators on the US economy have continued to point to a weaker pace of recovery than implied at the start of the year, with both GDP growth and unemployment disappointing at 1.9% and 8.1% respectively. Politics is likely to dominate newsflow over the next 12 months, with the upcoming Presidential elections in November and the rapidly approaching 'fiscal cliff' in January 2013. The fiscal cliff, if unaddressed, will see automatic tax increases and spending cuts which together are forecast to reduce GDP by 3-4%. The bipartisan cooperation required to create a sustainable solution appears highly doubtful, given the environment of heightened political hostility. However, the US should benefit from falling gasoline prices (having fallen 22% since the first quarter), which will be supportive of both household spending and business investment. The housing market appears to have stabilised and there are signs that banks are showing an increasing willingness to extend credit once more. Moreover, the US economy currently exhibits a number of positive characteristics including falling labour costs and a huge potential boost from unconventional natural resource extraction techniques, together with global leadership in technology and innovation led industries, which should enable the generally financially robust corporate sector to continue creating strong earnings growth.

In China, markets remain fearful of a potential economic 'hard landing', further exacerbated by a lack of clarity regarding the future policy direction in light of the upcoming leadership transition. However, despite evidence of a slowdown, China retains significant firepower with which to boost the economy through both monetary and fiscal stimulus with the People's Bank of China having eased in June, cutting the official one year borrowing rate by 25bps to 6.3%, its first cut since 2008. The slowing of growth from the unsustainable levels of recent years to a more controlled 6-8% p.a. could potentially be more accommodative to equity market performance, with fears of inflation and asset price bubbles becoming less prevalent. Several other Emerging Markets are confronting similar concerns from international investors, due to their slowing growth profiles and the perception of domestic economic uncertainty.

Overall, capital markets are demonstrating elevated levels of risk aversion with bond markets pricing in deflation and anaemic growth across much of the world economy. Despite this discouraging backdrop, many companies continue to pay dividends much higher than the fixed rates of returns available to investors, while providing leverage to economic recovery as and when it occurs. Equity market valuations are undemanding, with high quality companies generating strong cashflows in sectors and geographies with attractive growth prospects. In the near-term, however, volatility is likely to remain heightened until policy makers are able to persuade investors that they have sustainable and viable solutions to address the significant structural issues facing both developed and emerging economies.

Hanseatic Asset Management LBG August 2012

Going concern

The Group closely monitors and manages its liquidity risk. The Group has considerable financial resources including US$125.8 million in cash and cash equivalents and the Groups borrowings have a long maturity profile. The Groups business activities together with the factors likely to affect its future development and performance are set out in Chairman's statement, operating review and investment managers report. The financial position, cash flows and borrowings of the Group are also set out in the Chairman's statement. Details of the Group's borrowings are set out in note 15. Based on the Group's cash forecasts and sensitivities run, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.

Responsibility statement

The Directors confirm that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R; and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8R

By order of the Board

Jose Francisco Gouvea Vieira

14 August 2012

Ocean Wilsons Holdings Limited

Condensed consolidated statement of comprehensive income

for the six months ended 30 June 2012

Ocean Wilsons Holdings Limited

Condensed consolidated statement of financial position

as at 30 June 2012

Ocean Wilsons Holdings Limited

Condensed consolidated statements of changes in equity

as at 30 June 2012

Share capital

The Group has one class of ordinary share which carries no right to fixed income.

Capital reserves

The capital reserves arise principally from transfers from revenue to capital reserves made in the Brazilian subsidiaries arising in the following circumstances

(a) profits of the Brazilian subsidiaries and Brazilian holding company which in prior periods were required by law to be transferred to capital reserves and other profits not available for distribution; and

(b) Wilson Sons Limited byelaws require the company to credit an amount equal to 5% of the company's net profit to a retained earnings account to be called legal reserve until such amount equals 20% of the Wilson Sons Limited share capital.

Translation reserve

The translation reserve arises from exchange differences on the translation of operations with a functional currency other than US Dollars.

Amounts in the statement of changes of equity are stated net of tax where applicable

Ocean Wilsons Holdings Limited

Condensed consolidated cash flow statement

for the six months ended 30 June 2011

Ocean Wilsons Holdings Limited

Notes to the Accounts

The investment segment holds a portfolio of international investments.

Segment information relating to these businesses is presented below.