Financial Results
Group revenue for the three months ended 31 March 2017 was 16% higher at US$117.8 million, compared with US$101.7 million in 2016, principally due to a lower average US Dollar “USD”/Brazilian Real “BRL” exchange rate for the period and solid operational results. The average USD/BRL exchange rate in the first quarter at 3.15 was 20% lower than the comparative period in 2016, 3.91. A lower average exchange rate benefits BRL denominated revenues and adversely affects BRL denominated costs when converted into our USD reporting currency. Port terminal and logistics revenue increased 34% in the period to US$60.4 million (2016: US$44.9 million) reflecting the stronger average BRL in the period and higher container volumes. Container volumes in the period were 5% higher at 248,800 TEUs (2016: 237,500 TEUs) with increased volumes at both Tecon Rio Grande and Tecon Salvador. Both towage and ship agency revenue for the quarter of US$51.1 million and shipyard revenue of US$6.2 million were in line with the comparative period in 2016 (US$51.9 million and US$4.9 million respectively). Harbour towage manoeuvres were 6% higher at 14,742, (2016: 13,868)
Wilson Sons Limited's (“Wilson Sons”) EBITDA for the first quarter at US$35.5 million was 3.3% higher than 2016 (US$34.4 million).
Wilson Sons net income for the first quarter of US$14.9 million was US$7.1 million lower than 2016 (US$22.0 million) principally due to lower exchange gains. During the first quarter the BRL appreciated 3% from R$3.26 at 1 January 2017 to R$3.17 at period end. In the first quarter of 2016 the BRL appreciated 11%.
At 31 March 2017, Wilson Sons had US$118.0 million in cash equivalents and short term investments (2016: US$112.4 million).
In April 2017 the Federal Government of Brazil (União), Nacional Waterways Transport Agency (Antaq), Bahia port authority (CODEBA) and Tecon Salvador S.A. were officially notified by a Federal Court of an injunction determining the suspension of the works for expansion of Tecon Salvador. On 11 May 2017 the court ruled in favour of the appeal against the injunction. The Company continues to take all necessary measures to overturn the suspension and ensure expansion of the terminal planned between the end of 2017 and 2019.
The CEO of Wilson Sons Limited operations in Brazil, Cezar Baião, stated:
“Wilson Sons 1Q17 proforma EBITDA of US$35.5M was up 3.3% with solid results in the Towage and Terminals businesses. The highlight in container terminals was the 10.0% growth in operating volumes for Tecon Salvador and higher import volumes contributing to a better sales mix across both Rio Grande and Salvador. New terminal equipment delivered in February should further improve productivity at both Rio Grande and Salvador in the quarters to come.
The Towage division produced robust results with increased harbour manoeuvres offsetting a reduction in special operations. Our Offshore Support Vessels business benefitted from the two new long-term vessel contracts started in 2016, although we continue to believe it will be difficult to find employment for the four vessels that are currently offhire until market conditions improve.
Once more we are very grateful for the efforts of all our staff to achieve their contribution to this solid result despite a continuing weak Brazilian macroeconomic scenario and stress throughout the oil and gas services market. In particular I would like to thank all for their efforts in improving workplace safety. In February 2017 the Group reached a new mark exceeding 5 million work hours without registering any lost time accidents.”