16th May 2007 11:19
Ocean Wilsons Holdings Ld16 May 2007 Ocean Wilsons holdings limited Today our principal operating subsidiary, Wilson Sons Limited announced to theBrazilian and Luxembourg Stock Exchanges the results of the Company and itssubsidiary companies for the three months ending 31 March 2007. Wilson SonsLimited reported as follows: WILSON SONS REPORTS 1Q07 RESULTS Rio de Janeiro, May 15, 2007 - Wilson Sons Limited (Bovespa: WSON11), one of thelargest integrated operators of port and maritime logistics and supply-chainsolutions in the Brazilian market, with 170 years of experience, a nationwidenetwork and offering a full range of services to participants in the area ofinternational trade, in particular the port and maritime industry, withactivities spread across six segments of operation - port terminals, towage,logistics, ship agency, offshore and non-segmented activities - announces hereinits results for the first quarter of 2007 (1Q07). Except where stated otherwise, the interim financial and operating datapresented are based on condensed and consolidated data in U.S. dollars, inaccordance with International Accounting Standards no. 34 (IAS 34) related toInterim Financial Statements. Operating and Financial Highlights - Conclusion of the IPO process of Wilson Sons at a price of R$23.77/BDR; - Revenues of US$ 82.6 million in 1Q07, up 7.1% from the US$ 77.2 million posted in 1Q06; - Operating Profit of US$ 15.0 million, 11.2% higher than the US$ 13.5 million in 1Q06; - EBITDA of US$ 19.2 million in the quarter, an increase of 26.9% from the US$ 15.1 million posted in 1Q06; - Profit for the period of US$ 12.0 million, 46.5% higher than the US$ 8.2 million earned in 1Q06; Highlights 1Q07 1Q06 Chg. (%) Revenues (US$ MM) 82.6 77.2 7.1 EBITDA (US$ MM) 19.2 15.1 26.9 EBITDA Margin (%) 23.2% 19.6% 3.6p.p. Profit for the Period (US$ 12.0 8.2 46.5 MM) Net Margin (%) 14.5% 10.6% 3.9p.p. # of TEUs 195,347 197,035 -0.9 # of Manoeuvres 14,305 14,498 -1.3 # of Vessel Calls 1,434 1,618 -11.4 Management's Comments The year 2007 will be recorded in the history of Wilson Sons as the year of thecompany's IPO process. 26,400,000 Brazilian Depositary Receipts (BDRs) wereplaced in the offering, comprising a primary offering of 11,000,000 shares and asecondary offering of 15,400,000 shares. The offering price was R$ 23.77/BDR andthe total value of the issue exceeded R$ 627 million. In the first quarter of 2007 the company posted growth of 26.9% in EBITDA, 11.2%in Operating Profit, and 7.1% in Revenues. These numbers demonstrate the powerof the company's market position and the improvement in its operationalefficiency, while also reflecting the favorable environment in terms of Brazil'strade flows. Brazil's trade flows (the country's total exports plus its total imports) postedgrowth of 19.5%, rising from US$ 49.5 billion in the first quarter of 2006 toUS$ 59.1 billion in the first quarter of 2007. This quarter we added another Platform Supply Vessel (PSV) to our fleet thatsupports the oil and natural gas exploration and production activities. The PSVSaveiros Fragata is the first PSV vessel, built in Brazil with a diesel-electricpropulsion system, with length of 72.6 meters and Deadweight (DWT) capacity of3,100 tonnes. PSV Fragata was built in Wilson Son's shipyard and will bechartered to Petrobras, building on the company's strategy of fostering growthin its Offshore segment. Wilson Sons continually seeks integration and synergies among its varioussegments of operation, which - together with its extensive knowledge of themarket in which it operates, superior infrastructure and nationwide reach -constitute fundamental factors for the growth and strengthening of its financialand operational performance. Port Terminals Wilson Sons operates in the Port Terminals segment through (a) container portterminals (Tecon Rio Grande and Tecon Salvador), (b) terminal support for theoil industry, (c) to a lesser extent, in public ports. The main servicesprovided in our terminals consist of loading and unloading of vessels andstorage of cargo and auxiliary services. Port Terminals 1Q07 1Q06 Chg. (%) Revenue (US$ MM) 30.0 26.3 14.1 Operating Profit (US$ MM) 8.1 5.9 37.3 Operating Margin (%) 26.9% 22.4% 4.5p.p. EBITDA (US$ MM) 9.5 7.4 28.0 EBITDA Margin (%) 31.6% 28.2% 3.4p.p. # of TEUs 195,347 197,035 -0.9 Revenue Revenue in the Port Terminal segment rose by 14.1%, from US$ 26.3 million in1Q06 to US$ 30.0 million in 1Q07, due to the improvement in the Deep Sea/Cabotage and Full/Empty Container ratios. The improvement in container handlingmix resulted in increased average unit revenue. Despite a drop of 0.9% in thetotal number of TEUs handled as a result of the decline in the handling of emptycontainers and transshipment caused by the change in the calls of someshipowners (Tecon Salvador: Alianca and Mercosul Line; Tecon Rio Grande:Maersk), there was growth of approximately 18% in Deep Sea full-containervolumes, which indicates an upward trend in the main driver of terminal handlingand terminal revenue. The devaluation of the U.S. dollar in relation to the Brazilian real increasedimport flows and consequently the level of storage revenue. There was alsoincreased supplementary revenue from the supply of energy and the monitoring ofreefer containers, due to the recovery of frozen chicken exports at Rio Grande,which had been adversely impacted by the outbreak of avian flu in 2006. In thesupplementary services, Salvador recovered prices. The Port Terminal dedicated to provide services to platform supply vessels(PSV), operating in the offshore oil and gas industry also presented asignificant improvement in revenues compared to the 1Q06. Operating Profit Operating profit in the Port Terminals segment rose 37.3%, from US$ 5.9 millionin 1Q06 to US$ 8.1 million in 1Q07. The increase was due to a number of factorsthat impacted revenue, mainly the resetting of prices, increase in higher marginDeep Sea and full container movement and growth in storage operations. EBITDA EBITDA in the segment in 1Q07 was US$ 9.5 million, an increase of 28.0% from theUS$ 7.4 million posted in 1Q06. Towage Wilson Sons offers the following services related to towing: (i) port towing,(ii) maritime towing, (iii) salvage support, and (iv) support for operations inthe offshore industry. Towage 1Q07 1Q06 Chg. (%) Revenue (US$ MM) 29.3 25.7 13.8 Operating Profit (US$ MM) 8.3 7.6 9.9 Operating Margin (%) 28.5% 29.5% -1.0p.p. EBITDA (US$ MM) 10.3 9.7 6.5 EBITDA Margin (%) 35.3% 37.7% -2.4p.p. # of Manoeuvres 14,305 14,498 -1.3 Revenue Revenue from this segment rose 13.8%, from US$ 25.7 million in 1Q06 to US$ 29.3million in 1Q07. The increase was due to: (i) ocean towage operations, specialsalvage operations and oil exploration and production platform attendance; and(ii) an increase in average unit revenue due to price renegotiation to recovertariffs. Operating Profit Operating profit increased by 9.9%, from US$ 7.6 million in 1Q06 to US$ 8.3million in 1Q07. EBITDA EBITDA in 1Q07 was US$ 10.3 million, up 6.5% from the US$ 9.7 million reportedin 1Q06. Logistics Wilson Sons develops and provides differentiated logistics solutions for itscostumers' supply chains and distribution of their products, including a numberof logistic services, such as (i) storage, (ii) customs storage, (iii)distribution, (iv) road transportation, (v) multimodal transportation, and (vi)Non Vessel Operating Common Carrier ("NVOCC"). Logistics 1Q07 1Q06 Chg. (%) Revenue (US$ MM) 14.8 10.8 36.7 Operating Profit (US$ MM) 1.0 0.8 26.9 Operating Margin (%) 6.7% 7.2% -0.5p.p. EBITDA (US$ MM) 1.1 0.9 22.4 EBITDA Margin (%) 7.4% 8.3% -0.9p.p. Revenue Revenue in the Logistics segment rose 36.7%, from US$ 10.8mn in 1Q06 to US$ 14.8million in 1Q07. The main factors behind this increase were: (i) operations withnew large clients and an expansion in the scope of services provided to currentclients, and (ii) an increase in the volume of transport operations from new andexisting clients, mainly in the South of the country. In Santo Andre (Sao Paulostate), where our Bonded Warehouse and General Warehouse operations are located,we experienced high growth in revenue due to the addition of new clients and arecovery in retail client prices. Operating Profit Operating profit in the segment rose 26.9%, from US$ 0.8 million in 1Q06 to US$1.0 million in 1Q07. The main reason for this upturn was the increase in revenuedue to the improved client portfolio. EBITDA EBITDA in 1Q07 was US$ 1.1 million, posting growth of 22.4% from the US$ 0.9million posted in 1Q06. Ship agency In the ship agency segment, Wilson Sons Operates as attorneys-in-fact of theship owners and offer the following services: (i) sales offices, (ii)documentation services, (iii) container control, (iv) demurrage control, and (v)provision of service to vessels in the ports. +----------------------------+------------+------------+------------+ |Ship Agency | 1Q07 | 1Q06 | Chg. (%) | +----------------------------+------------+------------+------------+ |Revenue (US$ MM) | 4.5| 4.3| 5.2| +----------------------------+------------+------------+------------+ |Operating Profit (US$ MM) | 1.4| 1.2| 21.9| +----------------------------+------------+------------+------------+ |Operating Margin (%) | 31.4%| 27.1%| 4.3p.p.| +----------------------------+------------+------------+------------+ |EBITDA (US$ MM) | 1.6| 1.3| 20.4| +----------------------------+------------+------------+------------+ |EBITDA Margin (%) | 34.7%| 30.3%| 4.4p.p.| +----------------------------+------------+------------+------------+ |# of Vessel Calls | 1,434| 1,618| -11.4| +----------------------------+------------+------------+------------+ Revenue The ship agency segment posted Revenue of US$ 4.5 million in 1Q07, up 5.2% fromUS$ 4.3 million in 1Q06. This was mainly explained by a 5.3% increase in thenumber of bill of ladings issued and 16.2% more containers controlled, whichcompensated for the 11.4% drop in the number of vessel calls served. The fall invessel calls occurred because some Wilson Sons' clients decided to open theirown agencies. Operating Profit The operating profit in 1Q07, US$ 1.4 million, is 21.9% higher than theoperating profit in 1Q06, US$ 1.2 million, mainly due to savings in the maincost and expense items in the segment, such as personnel and communication. EBITDA EBITDA in the Ship agency segment in 1Q07 was US$ 1.6 million, an increase of20.4% from the US$ 1.3 million reported in 1Q06. Offshore This segment renders support services for the exploration and production of oiland gas through the operation of Platform Supply Vessels (PSVs) that transportequipment, driling sludge, tubes, food, cement and any other required materials,to and from the offshore platform to the operating base. +---------------------------+-----------+-------------+----------+ |Offshore | 1Q07 | 1Q06 | Chg. (%) | +---------------------------+-----------+-------------+----------+ |Revenue (US$ MM) | 1.8| 2.8| -35.8| +---------------------------+-----------+-------------+----------+ |Operating Profit (US$ MM) | 0.4| 0.2| 152.3| +---------------------------+-----------+-------------+----------+ |Operating Margin (%) | 23.4%| 5.9%| 17.4p.p.| +---------------------------+-----------+-------------+----------+ |EBITDA (US$ MM) | 0.8| 0.6| 45.4| +---------------------------+-----------+-------------+----------+ |EBITDA Margin (%) | 45.2%| 19.9%| 25.3p.p.| +---------------------------+-----------+-------------+----------+ |PSVs | 2| 2| 0.0| +---------------------------+-----------+-------------+----------+ Revenue Revenue earned from this segment fell 35.8%, from US$ 2.8 million in 1Q06 to US$1.8 million in 1Q07. The drop was mainly due to a spot service provided by oneof our tugs to the offshore industry in 2006. Revenues are from the operation oftwo PSVs, since the Company's third PSV, PSV Fragata, started to operate inmid-April. Operating Profit Despite the downward movement in this segment's revenue, Operating profit rosefrom US$ 0.2 million in 1Q06 to US$ 0.4 million in 1Q07. The increase was mainlydue to a reduction in maintenance costs. EBITDA EBITDA in 1Q07 was US$ 0.8 million, rising 45.4% from the US$ 0.6 million postedin 1Q06. Non-Segmented Activities This segment combines the services rendered by Wilson Sons' shipyard for thirdparty, Wilson Sons' 33.3% interest in the dredging company Dragaport, and thecompany's management costs, applicable to all segments. +--------------------------+-------------+------------+-----------+ |Non-segmented | 1Q07 | 1Q06 | Chg. (%) | +--------------------------+-------------+------------+-----------+ |Revenue (US$ MM) | 2.2| 7.2| -69.7| +--------------------------+-------------+------------+-----------+ |Operating Profit (US$ MM) | -4.2| -2.1| 103.7| +--------------------------+-------------+------------+-----------+ |Operating Margin (%) | -| -| -| +--------------------------+-------------+------------+-----------+ |EBITDA (US$ MM) | -4.1| -4.8| -13.4| +--------------------------+-------------+------------+-----------+ |EBITDA Margin (%) | -| -| -| +--------------------------+-------------+------------+-----------+ Revenue Revenue declined by 69.7%, from US$ 7.2 million in 1Q06 to US$ 2.2 million in1Q07, mainly due to: (i) reductions of the dredging operations in 1Q07 atDragaport, a joint venture of Wilson Sons (ii) the shipyard sales to thirdparties in 1Q06, which did not occur in 1Q07. Operating Profit The segment's losses increased from US$ 2.1 million in 1Q06 to a loss of US$ 4.2million in 1Q07, mainly due to: (i) reductions of the dredging operations in1Q07 at Dragaport, a joint venture of Wilson Sons and (ii) the shipyard sales tothird parties in 1Q06, which did not occur in 1Q07. EBITDA EBITDA in 1Q07 posted a loss of US$ 4.1 million, 13.4% down from the EBITDA lossof US$ 4.8 million reported in 1Q06. CONSOLIDATED Revenue Consolidated Revenue rose 7.1%, from US$ 77.2 million in 1Q06 to US$ 82.6million in 1Q07. This increase of US$ 5.4 million was mainly due to: (i)additional services in Towage, (ii) New clients in Logistics, (iii) Increase inPort Terminals operations to the oil and gas industry, and (iv) Improvement incontainer handling mix and increase in supplementary services provided by PortTerminals. Revenue (US$ MM) 1Q07 1Q06 Chg. (%) Port Terminals 30.0 26.3 14.1 Towage 29.3 25.7 13.8 Logistics 14.8 10.8 36.7 Ship Agency 4.5 4.3 5.2 Offshore 1.8 2.8 -35.8 Non-segmented Activities 2.2 7.2 -69.7 Total 82.6 77.2 7.1 Raw Material and Consumable Used Costs of raw materials and consumables used increased 10,8% from US$10.0 millionin 1Q06 to US$11.1 million in 1Q07, mainly due to: (i) increases in ouroperations, specifically in Towage, Logistics and Port Terminals, and (ii)Exchange rate variations, since our costs of raw material and consumables aremainly linked to the Real. Personnel Expenses Our personnel expenses rose by 15.5%, from US$ 18.7 million in 1Q06 to US$ 21.5million in 1Q07. The increase was due to: (i) an increase in the number ofemployees, especially in the Logistics (new operations) and Port Terminalsegments, (ii) annual increases related to collective bargain agreements, and(iii) exchange rate impact. Other Operating Expenses Other operating expenses fell by 2.3% from US$32.1 million, in 1Q06, to US$31.4million in 1Q07. No material changes to be reported. Operating Profit Operating profit posted growth of 11.2%, from US$ 13.5 million in 1Q06 to US$15.0 million in 1Q07. The increase in operating profit of US$ 1.5 million wasmainly due to the increases in the Port Terminal and Towage segments. Operating Profit 1Q07 1Q06 Chg. (%) Port Terminals (US$ MM) 8.1 5.9 37.3 Towage 8.3 7.6 9.9 Logistics 1.0 0.8 26.9 Ship Agency (US$ MM) 1.4 1.2 21.9 Offshore 0.4 0.2 152.3 Non-segmented Activities -4.2 -2.1 103.7 Total 15,0 13,5 11,2 EBITDA EBITDA in 1Q07 was US$ 19.2 million, posting an increase of 26.9% in relation tothe EBITDA of US$ 15.1 million reported in 1Q06. The increase in EBITDA of US$4.1 million was mainly due increases in Port Terminal and Towage. EBITDA (US$ MM) 1Q07 1Q06 Chg. (%) Port Terminals 9.5 7.4 28.0 Towage 10.3 9.7 6.5 Logistics 1.1 0.9 22.4 Ship Agency 1.6 1.3 20.4 Offshore 0.8 0.6 45.4 Non-segmented Activities -4.1 -4.8 -13.4 Total 19.2 15.1 26.9 Financial Income and Expenses Net financial income fell by 4,5% from US$ 1.8 million in 1Q06 to US$ 1.7million in 1Q07, due to the decline in the annualized CDI rate from 16.9% in1Q06 to 12.7% in 1Q07. Profit for the Period Net income increased by 46.5%, from US$ 8.2 million in 1Q06 to US$ 12.0 millionin 1Q07, highlighting that a non-recurring Loss on disposal of investment (US$2,8 million) occurred in 1Q06. Investments Investments in 1Q07 totaled US$ 13.0 million, up 71.7% from the US$ 7.6 millioninvested in 1Q06, due to the construction of the third berth at Tecon Rio Grandeand the program to renew the towage fleet. CAPEX (US$ MM) 1Q07 1Q06 Chg. (%) Port Terminals 4.8 4.3 13.0 Towage 2.4 1.5 63.2 Logistics 0.0 0.1 -36.4 Ship Agency 0.1 0.1 -38.6 Offshore 5.4 1.5 251.7 Non-segmented Activities 0.2 0.1 133.3 Total 13.0 7.6 71.7 Indebtedness Although the Company's total debt remained virtually flat (0.8% in 1Q07 over1Q06), net debt increased by 10.4%, from US$55.6 million to US$61.3 million, ascash and cash equivalents fell 9% in the period. As for the debt profile, there was no change in the balance between short andlong-term. Of the total debt, 86% is long-term. Similarly, US$ denominated debt in 1Q07 represented 99.0%. Net Debt (US$ MM) 1Q07 1Q06 Chg. (%) Short Term 15.5 14.9 3.9 Long Term 95.5 95.2 0.3 Total Debt 111.0 110.2 0.8 (-) Cash & Equivalents -49.7 -54.6 -9.0 (=) Net Debt 61.3 55.6 10.4 Total Debt (US$ MM) 1Q07 1Q06 R$ Denominated 1.1 0.8 US$ Denominated 109.9 109.9 Total Debt 111.0 110.2 * The data and information presented in this press earnings announcement werenot reviewed or audited by independent auditors. 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