Coronavirus Update

Ocean Wilsons Holdings- Preliminary Results

This content has been sourced from: https://www.investegate.co.uk/ocean-wilsons-hldgs-...

Highlights

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Profit after tax for the year of US$48.0 million which is US$13.0 million lower than the prior year (2019: US$61.0 million) principally due to the impact of foreign exchange losses and increased income tax.

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The investment portfolio (including cash under management) increased US$25.0 million to US$310.3 million (2019: US$285.3 million).

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Operating profit decreased 2.9% to US$66.9 million (2019: US$68.9 million) mainly due to foreign exchange losses of $7.6 million (2019: $0.1 million) driven by a weaker Brazilian Real ("BRL") against the US$ and there being no impairment charge in the current year (2019: US $13.0 million). Overall expenses were lower year over year. Raw materials costs were 23.8% lower reflecting lower shipyard activity and other operating expenses declined reflecting the reduction of operational activity as a result of Covid-19.

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Group revenue for the year was 13.1% lower at US$352.8 million (2019: US$406.1 million) principally due to the impact of the weaker BRL and lower revenues at the offshore bases due to the impact of Covid-19 on the oil industry.

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Net cash inflow from operating activities for the year was US$105.7 million (2019: US$106.3 million).

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Proposed dividend unchanged at US 70 cents per share (2019: US 70 cents per share).

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Earnings per share for the year down US 23 cents per share to US 109.5 cents (2019: US 132.5 cents per share).

 

About Ocean Wilsons Holdings Limited

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

Wilson Sons Limited ("Wilson Sons") is a Bermuda company listed on the São Paulo Stock Exchange (BOVESPA) and Luxembourg Stock Exchange. At 31 December 2020 Ocean Wilsons holds a 57.77% interest in Wilson Sons which is fully consolidated in the Group accounts with a 42.23% non-controlling interest. Wilson Sons is one of the largest providers of maritime services in Brazil with over three thousand employees and activities including towage, container terminals, offshore oil and gas support services, small vessel construction, logistics and ship agency.

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

Objective

Ocean Wilsons focuses on long-term performance and value creation. This approach applies to both the investment portfolio and our investment in Wilson Sons. The long-term strategy, managed by the Board, enables Wilson Sons' investments to grow and develop sustainable results with less pressure to produce short-term performance at the expense of longer-term value creation. This same view allows our Investment Manager to make investment decisions to achieve long-term capital growth.

Chairman's Statement

Introduction

While this year has presented the most challenging economic and operational environment for businesses globally due to the Covid-19 pandemic, it is important to remember that our business has been through other challenges in the past that have had a significant impact on our results in Wilson Sons and our investment portfolio, including the world financial crisis in 2008 and 2009 and the Brazilian market crash of 2015 and 2016. For most economies and industries, the longer-term financial and social impacts from this pandemic are likely to be far more significant than those two events combined. The economic uncertainty in the earlier days of the pandemic were demonstrated by the global financial market crash and significant terminal activity decline in the operations of Wilson Sons. As the year progressed, markets recovered beyond most forecasters expectations and Wilson Sons' results proved to be more resilient than originally feared.

Wilson Sons' container terminal operations have been negatively impacted by the Covid-19 pandemic resulting in lower import volumes. However, towage volumes improved in the fourth quarter, and Wilson Sons' fourth quarter after tax profit increased and their liquidity remains strong as the Brazilian economy works toward recovery and the new normal.

The investment portfolio performed well while markets recovered from the initial Covid-19 market crash in March. Driven by rising equity markets, the investment portfolio rose 10.9% on a time-weighted net return basis over the year to US$310.3 million (2019: US$285.3 million), outperforming its benchmark of 4.4%.

Growth in the Brazilian economy has been a struggle since the 2015-2016 crash and is now exacerbated with the uncertainty of the economic impact of the Covid-19 pandemic. Real GDP growth in 2019 was 1.1%, compared to negative 4.0% real GDP in 2020. Additionally, the BRL fell 28.9% against the US$. Notwithstanding these economic headwinds, Wilson Sons reported better than expected trade linked volumes in its container terminal business and increased days in operation of its Offshore Vessels.

These key operational indicators at our container terminals and towage businesses declined only slightly by year end against the 2019 comparative, as trade volumes increased in the second half of the year both domestically and internationally.

Operating volumes

2020

2019

% Change

Container Terminals (container movements in TEU '000s) *

1,017.6

1,027.3

(1.0%)

Towage (number of harbour manoeuvres performed)

52,873

53,088

(0.4%)

Offshore Vessels (days in operation)

5,356

5,128

4.4%

*TEUs stands for "twenty-foot equivalent units".