REG - Ocean Wilsons Hldgs - Preliminary results for the period end 30 Jun 2024
09/08/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240809:nRSI7990Za&default-theme=true
RNS Number : 7990Z Ocean Wilsons Holdings Ltd 09 August 2024
Ocean Wilsons Holdings Limited
Preliminary results for the period ended 30 June 2024
About Ocean Wilsons Holdings Limited
Ocean Wilsons Holdings Limited ("Ocean Wilsons" or the "Company") is a Bermuda
investment holding company which, through its subsidiaries, holds a portfolio
of international investments and operates a maritime services company in
Brazil. The Company is listed on both the London Stock Exchange and the
Bermuda Stock Exchange.
Principal Activities
The Company's principal activities are the management of a diverse global
investment portfolio and the provision of maritime and logistics services in
Brazil.
Ocean Wilsons has two operating subsidiaries: Ocean Wilsons (Investments)
Limited ("OWIL") and Wilson Sons S.A. ("Wilson Sons") (together with the
Company and their subsidiaries, the "Group").
The Company owns 100% of OWIL and 57% of Wilson Sons which is fully
consolidated in the financial statements with a 43% non-controlling interest.
Wilson Sons is one of the largest providers of maritime services in Brazil
with activities including towage, container terminals, offshore oil and gas
support services, small vessel construction, logistics and ship agency.
Objective
The Company's objective is to focus on long-term value creation through both
the investment portfolio and the investment in Wilson Sons. This longer-term
view directs an OWIL investment strategy of a balanced thematic portfolio of
funds leveraging our long-standing investment market relationships and through
detailed insights and analysis. The Wilson Sons strategy focuses on providing
best in class or innovative solutions in a rapidly growing maritime logistics
market.
Data Highlights
KEY DATA (in US$ millions)
6 months ended 6 months ended Change
30 June 2024 30 June 2023
Revenue 262.4 229.7 +32.7 (+14.2%)
Operating profit 68.4 55.9 +12.5 (+22.4%)
Profit after tax 38.4 47.9 -9.5 (-19.8%)
Investment portfolio net return 10.7 11.2 -0.5 (-4.5%)
Net cash inflow from operating activities 90.5 45.5 +45.0 (+98.9%)
At 30 June 2024 At 31 December 2023 Change
Investment portfolio assets 319.6 310.9 +8.7 (+2.8%)
Net assets 789.8 815.8 -26.0 (-3.2%)
Net debt 436.7 479.1 -42.4 (-8.8%)
SHARE DATA
6 months ended 6 months ended Change
30 June 2024 30 June 2023
Dividend paid per share (USD) 85 cents 70 cents +15 cents (+21.4%)
Earnings per share (USD) 71.1 cents 86.2 cents -15.1 cents (-17.5%)
12 months ended
31 December 2023
Earnings per share (USD) 189.6 cents
At 30 June 2024 At 31 December 2023 Change
Share price (GBP) 12.90 12.00 +0.90 (+7.5%)
Chair's Statement
I am pleased to report that Ocean Wilsons Holdings Limited has delivered a
robust performance for the first half of 2024, underscored by the strong
operating results from Wilson Sons driven by its strategic growth initiatives
and operational resilience.
Wilson Sons has delivered a 14.2% growth in revenues period on period, with a
particular highlight being the addition of a new feeder route in South America
and two new direct services connecting Asia to both Rio Grande and Salvador.
These developments have significantly boosted container volumes, offsetting
the temporary slowdown from the severe floods in the southern region of
Brazil. Wilson Sons' growth strategy for its container terminals has proven to
be highly successful and its other business lines are also continuing to
produce solid results, leading to strong cash generation. More details are
provided in the Wilson Sons' management report.
Our investment portfolio delivered a 3.9% gross return for the six-month
period which was in line with the absolute benchmark return and significantly
ahead of the equal weighted 60:40 comparable benchmark. As shareholders are
aware, our investment strategy is intentionally designed to have a balanced
portfolio of assets generating sustainable but less volatile returns over the
long term. We remain confident in our investment approach which combines
exposure to both public and private markets as well as a defensive allocation
to assets providing uncorrelated returns and our focus remains on sustainable,
long-term growth. A key strength of our investment manager is its preferred
access to individual funds in both public and private markets due to the
strength of its long-term relationships. Private markets have performed
exceptionally well over the long term, albeit they are lagging public markets
at present, with the latter driven by the "Magnificent Seven". Typically these
lags in performance are temporary affairs. The portfolio commentary in this
document provides more specifics. We believe that the ever more uncertain
geopolitical backdrop at present is likely to drive longer-term asset returns,
reinforcing the resilience of this strategy, particularly as interest rates
are expected to decline through 2025.
Strategic Review
Our strategic review of our investment in Wilson Sons continues, albeit not as
swiftly as we had initially anticipated. However, we remain on track to
announce the outcome of this review before the end of 2024. Both external
factors and the excellent performance of Wilson Sons are playing into these
considerations. The Board compliments the Wilson Sons management team for its
steadfast commitment and focus on delivering its strategy without distraction
during this review period. This measured strategic review remains focused on
ensuring that we continue to align both of our sectors with our long-term
objectives and deliver value to our shareholders.
Wilson Sons has generated significant cash during the period and has
distributed dividends in excess of those in previous periods and to an earlier
timeframe. Currently our own dividend policy remains unchanged and will be
reviewed in conjunction with the completion of the strategic review.
In summary, the first half of 2024 has been a period of strong operational
performance for Ocean Wilsons Holdings Limited, primarily driven by the
resilience and strategic advancements of Wilson Sons, supported by an
investment return benchmarked to the market with a lower risk profile. We
remain committed to our growth strategy and investment strategy and are
optimistic about the future.
Investment Manager's Report
Market Backdrop
Global markets remained remarkably strong in the first half of the year with
the US continuing to lead the way on the back of robust economic performance
and the enthusiasm for Artificial Intelligence (AI). High expectations of
interest rate cuts coming into the year were tempered by an unexpected
increase in US inflation with the market now more realistic. This change
created a challenging environment for bonds with yields rising across the
board although corporate bonds performed markedly better than government
bonds.
While headline equity market performance was impressive and the MSCI ACWI + FM
index had a strong start to the year gaining 11.3%, much of this return came
from only seven technology stocks (Alphabet, Amazon, Apple, Meta, Microsoft,
Nvidia and Tesla) known as the Magnificent 7. However, if you mute the
outsized weighting of these companies in the index by looking at the MSCI ACWI
Equal Weighted index, the return was only 0.9% showing the market was actually
significantly more difficult than on first glance.
Against this backdrop, the investment portfolio's gross return of 3.9% and net
return of 3.3% was pleasing and compared well to the 3.9% return of the
absolute benchmark (US CPI Urban Consumers NSA + 3%) which is inflation
driven. The investment portfolio was significantly ahead of the 60:40 MSCI
ACWI Equal Weighted : Bloomberg Global Treasury which declined 1.5%.
Portfolio Commentary
Public Equity and Directional Hedge Funds
The investment portfolio's strongest performance was in the public equity and
directional hedge funds. Positioning in the US market and the technology
sector continued to be the primary contributors. BlackRock Strategic Equity
Hedge Fund, which has large positions in both Microsoft and Alphabet,
performed particularly well gaining 17.0%. Polar Capital Global Technology
(+25.7%) benefitted from having leant into AI with a significant amount of its
holdings positioned to directly profit from the increased investor interest in
the area. Its top 10 holdings also include five of the Magnificent 7.
There was more mixed performance within our Japanese holdings with the more
esoteric fund, Simplex Value Up, gaining 10.5% with strong stock picking being
the major driver. Our larger cap holdings were more mixed with Arcus Japan,
Alma Eikoh Japan Large Cap and Indus Japan returning 2.6%, 1.9% and -2.7%,
respectively. This was due to these funds broadly avoiding the handful of mega
cap stocks that drove the Japanese market so far this year.
Private Markets
Private markets continued to experience their usual time lag behind public
markets but some of the portfolio's newer investments materially gained in
value. Private markets more broadly continued to be subdued with higher
interest rates leading to less transaction activity which in turn has slowed
the pace of fundraising for many managers. Within our portfolio there was
noticeably strong performance from financials specialist Reverence Capital
Partners Opportunities Fund V and healthcare specialist OrbiMed Private
Investment IX which both saw material valuation increases. No new commitments
were made in the first half of the year.
Defensive Positioning
The defensive silo contributed positively on an absolute basis and continues
to outperform global treasury bonds. Several of the fund's fixed income
positions performed very strongly this year with Selwood AM - Liquid Credit
Strategy, a specialist in trading investment grade credit default swaps (CDXs)
which are a type of insurance against corporate defaults, gaining 4.5%. The
increase in geopolitical risk in Europe over the last few months has meant
that demand for CDX protection is higher and the coupons have increased.
Nephila Iron Catastrophe Fund, a specialist strategy investing in catastrophe
bonds, gained 6.0% reflecting an extremely strong pricing environment.
Lazard Convertible Bond Fund had a poor start to the year declining 2.7% as
the holding's growth bias gave it higher exposure to equity markets, but not
the Magnificent 7 stocks. We decided to fully redeem our holding in Keynes
Dynamic Beta Strategy after a poor run over the last couple of years. Brevan
Howard Absolute Return Government Bond Fund was also sold as we felt the
returns were not justifying the fees that are significantly higher than just
holding a government bond ETF.
Looking forward
The near-term outlook for stock markets will continue to be driven by the
inflation/interest rate dynamic, economic growth and the outlook for the
Magnificent 7. With interest rates likely to be heading down rather than up -
albeit not to the degree by which markets thought they would at the start of
the year - and economic and corporate growth largely supportive, this should
help underpin share prices. Clearly there are risks though with the current
low volatility seeming inappropriate given the number of challenges faced in
the world and we are also becoming a little wary about the ongoing strength of
the Magnificent 7 and the rush into AI.
However, whilst the economic backdrop might continue to drive shorter-term
returns, increasing geopolitical uncertainty is likely to impact longer term
asset returns. Ultimately, governments and their policies determine the
long-term growth prospects of a country, the environment in which corporates
operate and the risks faced. It is this, combined with relatively high
valuations and the supernormal returns of the last couple of decades as rates
fell to zero, that leads us to conclude that stock market returns, whilst
still positive, are likely to be somewhat lower in the future.
Investment Portfolio Returns
30 June 2024 30 June 2023 3 Years 5 Years
p.a. p.a.
Gross return 3.9% 4.5% 1.5% 6.0%
Net return* 3.3% 3.9% 0.3% 4.8%
Performance Benchmark** 3.9% 3.7% 8.0% 7.2%
60:40 MSCI ACWI and Bloomberg Global Treasury 4.5% 8.4% 0.2% 5.0%
60:40 MSCI ACWI Equal Weighted and Bloomberg Global Treasury -1.5% 3.1% -4.8% 1.0%
MSCI ACWI Equal Weighted 0.9% 4.7% -3.3% 3.7%
MSCI ACWI + FM NR US$ 11.3% 13.9% 5.4% 10.7%
Bloomberg Global Treasury TR US$ (Unhedged) -4.9% 0.6% -7.2% -3.4%
MSCI Emerging Markets NR US$ 7.5% 4.9% -5.1% 3.1%
* Net of management and performance fees. No performance fees were earned in
2024 and 2023 as the high-water mark was not exceeded.
** The OWIL Performance Benchmark is an absolute benchmark of US CPI Urban
Consumers NSA +3% p.a.
Investment Portfolio at 30 June 2024
Holding Market Value US$000 % of NAV Primary Focus
Findlay Park American Fund 33,188 10.4 US Equities - Long Only
BlackRock Strategic Equity Hedge Fund 17,582 5.5 Europe Equities - Hedge
Select Equity Offshore, Ltd 12,531 3.9 US Equities - Long Only
BA Beutel Goodman US Value Fund 10,326 3.2 US Equities - Long Only
Pershing Square Holdings Ltd 9,137 2.9 US Equities - Long Only
iShares Core MSCI Europe UCITS ETF 7,268 2.3 Europe Equities - Long Only
Schroder ISF Asian Total Return Fund 7,010 2.2 Asia ex-Japan Equities - Long Only
NG Capital Partners II, LP 6,843 2.1 Private Assets - Latin America
Schroder ISF Global Recovery 6,634 2.1 Global Equities - Long Only
Polar Capital Global Insurance Fund 6,504 2.0 Financials Equities - Long Only
Top 10 Holdings 117,023 36.6
Polar Capital Global Technology Fund 6,254 2.0 Technology Equities - Long Only
Navegar I, LP 6,195 1.9 Private Assets - Asia
iShares Core S&P 500 UCITS ETF 6,101 1.9 US Equities - Long Only
NTAsian Discovery Fund 5,563 1.8 Asia ex-Japan Equities - Long Only
Armistice Capital Offshore Fund Ltd 5,315 1.7 US Equities - Hedge
Stepstone Global Partners VI, LP 4,922 1.5 Private Assets - US Venture Capital
Indus Japan Long Only Fund 4,812 1.5 Japan Equities - Long Only
Silver Lake Partners IV, LP 4,805 1.5 Private Assets - Global Technology
KKR Americas XII, LP 4,587 1.4 Private Assets - North America
Pangaea II, LP 4,320 1.4 Private Assets - GEM
Top 20 Holdings 169,897 53.2
RA Capital International Healthcare Fund 4,312 1.3 Healthcare Equities - Long Short
TA Associates XIII-A, LP 4,266 1.3 Private Assets - Global Growth
Simplex Value Up Company 4,239 1.3 Japan Equities - Long Only
Selwood AM - Liquid Credit Strategy 4,194 1.3 Market Neutral - Global Bonds
Global Event Partners Ltd 4,004 1.3 Market Neutral - Event-Driven
Worldwide Healthcare Trust PLC 3,890 1.2 Healthcare Equities - Long Only
TA Associates XIV-B, LP 3,581 1.1 Private Assets - Global Growth
BPEA Private Equity Fund VII, L.P. 3,471 1.1 Private Assets - Asia
Reverence Capital Partners Opportunities Fund II 3,427 1.1 Private Assets - Financials
Silver Lake Partners VI, LP 3,383 1.1 Private Assets - Global Technology
Top 30 Holdings 208,664 65.3
Remaining Holdings 104,952 32.8
Cash and Cash Equivalents 5,948 1.9
TOTAL 319,564 100.0
Wilson Sons' Management Report
The Wilson Sons June 2024 Earnings Report was released on 8 August 2024 and is
posted on www.wilsonsons.com.br. In the report, Mr Fernando Salek, CEO of
Wilson Sons, said:
"Wilson Sons' 30 June 2024 net revenues of US$262.4 million were 14.2% higher
than the comparative period (2023: US$229.7 million), mainly due to excellent
container terminal and towage results.
Towage revenues increased 8.4% driven by volume growth and improved mix.
Volume growth of 6.7% was primarily driven by a greater number of ships
carrying grains, iron ore and breakbulk cargo. The decrease in special
operations revenue was largely attributed to lower salvage assistance
activity. In late August 2024, our fleet will welcome the WS Onix, a 90-tonne
bollard pull tug built at our shipyard.
Container terminal revenues surged 29.0% driven by robust growth in
transshipment and gateway volumes, higher revenues from ancillary services and
fixed cost dilution. Aggregate volumes increased 24.7% to an all-time high
propelled by exceptional performances at both terminals. In May 2024, Rio
Grande launched a new deep-sea route and feeder solution for cargo from
Argentina, Uruguay and southern Brazil, further cementing its status as a key
hub port on South America's east coast. In July 2024, Salvador welcomed
Brazil's first regular call by a New Panamax vessel, establishing a direct
link to Asian markets and strategically positioning the terminal to handle
substantial gateway and transshipment volumes from the country's northern and
northeastern regions.
Offshore support vessel revenues increased 21.2% driven by improved fleet
utilisation and higher daily rates. Operating days rose 6.0% driven by new
hires and contract renewals.
Workplace safety for the twelve months ended 30 June 2024 was stable at 0.25
incidents per million hours worked, in line with the rate observed in March
2024 and continuing to outperform the world-class benchmark of 0.50. Our
unwavering commitment to safety is a cornerstone of our operations, with the
well-being of our employees paramount.
As we conclude the first half of 2024, I am pleased to report that Wilson Sons
continues to deliver robust growth and operational excellence. The strength of
our core businesses has been remarkable, showcasing not only the vigour of our
operating model but also the effectiveness of our strategy. Looking ahead, we
remain firmly committed to our principles of stringent safety standards,
optimal asset utilisation and disciplined capital allocation. I am quite
optimistic about the prospects ahead and confident in our ability to navigate
towards an even brighter future."
Operating volumes (to 30 June) 2024 2023 Change
Towage
Number of harbour manoeuvres 28,900 27,079 +6.7%
Offshore support bases
Number of vessel turnarounds 570 554 +2.9%
Number of operating days 3,875 3,657 +6.0%
Container terminal - aggregated Volumes
Exports - full containers 158.6 139.4 +13.8%
Imports - full containers 75.6 62.4 +21.2%
Cabotage - full containers 67.1 63.3 +6.0%
Inland Navigation - full containers* 12.1 13.4 -9.7%
Transhipment - full containers 144.3 59.8 +141.3%
Empty containers 154.0 152.2 +1.2%
Total Volume 611.7 490.5 +24.7%
*Inland navigation volumes decreased due to temporary flood-driven impacts in
May 2024
Financial Report
Operating profit
Operating profit of US$68.4 million represents a 22.4% increase from US$55.9
million for the comparative period. Revenue increased 14.2% while operating
expenses increased by 11.6% resulting in an operating margin of 26.1% (2023:
24.3%).
Total operating expenses of US$194.0 million (2023: US$173.8 million) mainly
include raw material and consumables used of US$18.2 million (2023: US$17.7
million), employee charges and benefits expenses of US$75.0 million (2023:
US$67.6 million), other operating expenses of US$62.5 million (2023: US$55.2
million), and depreciation and amortisation charges of US$37.1 million (2023:
US$35.7 million). Foreign currency exchange loss of US$1.2 million (2023:
US$0.7 million gain) included in operating profit arose from the Group's
foreign currency monetary items and reflect the movement of the BRL against
the USD during the period.
Revenue from maritime services
Revenue for the period increased by 14.2% compared to the first half of the
prior year to US$262.4 million (2023: US$229.7 million). Container terminal
revenues increased 29.0% driven by growth in transshipment and gateway
volumes, higher revenues from ancillary services and fixed cost dilution.
Towage revenues increased 8.4% driven by volume growth of 6.7% driven by a
greater number of ships carrying grains, iron ore and breakbulk cargo.
Offshore support vessel revenues increased 21.2% driven by improved fleet
utilisation and higher daily rates while operating days rose 6.0%.
Returns on the investment portfolio
The gain for the period on the investment portfolio of US$12.3 million (2023:
US$12.7 million) comprises an unrealised gain of US$5.8 million (2023: US$10.5
million), net investment income of US$0.1 million (2023: US$0.7 million) and
profit on disposal of US$6.4 million (2023: US$1.5 million). The investment
portfolio and cash under management was US$8.7 million higher at US$319.6
million at 30 June 2024 (31 December 2023: US$310.9 million).
Share of results of joint ventures and associates
The share of results of joint ventures and associates is comprised of Wilson
Sons' 50% share of the net results for the period from the offshore support
vessel joint ventures and 32.32% share of the net results for the period from
the associate Argonáutica. The net profit attributable to Wilson Sons for the
period was US$0.1 million (2023: US$6.0 million); this reduction is mostly
attributable to a significant increase in foreign exchange losses on monetary
items within the joint ventures due to the depreciation of the BRL against the
USD.
Exchange rates
The Group reports in USD and has revenue, costs, assets and liabilities in
both BRL and USD. In the six months to 30 June 2024 the BRL depreciated 14.9%
against the USD from R$4.84 at 1 January 2024 to R$5.56 at the period end. In
the comparative period in 2023 the BRL appreciated 7.7% against the USD from
R$5.22 to R$4.82.
Profit before tax
Profit before tax increased US$7.4 million to US$65.7 million compared to
US$58.3 million for the comparative period, mainly driven by a US$12.5 million
increase in operating profit which was offset by a US$5.9 million decrease in
share of results of joint ventures and associates.
Taxation
The Group is taxed on its maritime services operations in Brazil at a combined
corporation and social contribution tax rate of 34%. The total tax expense for
the period of US$27.2 million (2023: US$10.4 million) comprises the current
tax expense of US$13.1 million (2023: US$13.8 million) and the deferred tax
expense resulting from timing differences of US$14.1 million (2023: credit of
US$3.3 million).
Profit for the period
After deducting the profit attributable to non-controlling interests of
US$13.3 million (2023: US$17.4 million), the profit for the period
attributable to equity holders of the Company is US$25.2 million (2023:
US$30.5 million). The earnings per share for the period was US 71.1 cents
(2023: US 86.2 cents).
Cash flow and debt
At 30 June 2024, the Group had cash and cash equivalents of US$66.2 million
(30 June 2023: US$14.9 million). Net cash inflow from operating activities for
the period was US$90.5 million (2023: US$45.5 million). Disposal of investment
portfolio assets, net of purchases, were US$7.7 million (2023: net purchase of
US$30.2 million). Purchase of property, plant and equipment was US$26.3
million for the period (2023: US$31.7 million). Dividends of US$30.1 million
were paid to equity holders of the Company (2023: US$24.8 million) with a
further US$17.7 million paid to non-controlling interests in our subsidiaries
(2023: US$12.4 million). Borrowings including lease liabilities were US$502.8
million at the end of the period (31 December 2023: US$548.5 million). New
loans of US$13.1 million were raised in the period (2023: US$29.0 million)
while capital repayments on existing loans of US$26.0 million were made in the
period (2023: US$36.2 million).
Balance sheet
Equity attributable to equity holders of the Company at the end of the period
was US$587.2 million compared to US$601.5 million at 31 December 2023. The
main movements in equity for the half year was the profit for the period
attributable to equity holders of the Company of US$25.2 million, dividends
paid of US$30.1 million and a negative currency translation adjustment of
US$9.4 million.
Other matters
Principal risks
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 31
December 2023. A detailed description can be found in the Report of Directors
of the 2023 Annual Report and Financial Statements which are available on the
Company website at www.oceanwilsons.bm.
The Board notes that there have been no substantive changes to the risk
assessment during the reporting period.
Related party transactions
Related party transactions during the period are set out in note 18 of the
interim consolidated financial statements.
Going concern
The Group closely monitors and manages its liquidity risk. The Group has
considerable financial resources including US$66.2 million in cash and cash
equivalents and the majority of the Group's borrowings have a long maturity
profile. The Group's business activities together with the factors likely to
affect its future development and performance are set out in the Chair's
statement together with the Investment Manager's report and the Wilson Sons'
report. Details of the Group's borrowings are set out in note 16 of the
interim consolidated financial statements. Based on the Group's year to date
results and cash forecasts, the Directors have a reasonable expectation that
the Company and the Group have adequate resources to continue in operation for
the foreseeable future.
The Group manages its liquidity risk and does so in a manner that reflects its
structure and two distinct businesses.
OWIL
OWIL has no debt. It has outstanding commitments of US$47.8 million in respect
of investment subscriptions, for which details are provided in note 8. The
timing of these investment commitments may be accelerated or delayed in
comparison with those indicated in note 8.
However, highly liquid investments held are significantly in excess of the
commitments. Neither Ocean Wilsons nor OWIL have made any commitments or have
obligations towards Wilson Sons and its subsidiaries and their creditors or
lenders. Therefore, in the unlikely circumstance that Wilson Sons was to
encounter financial difficulty, the parent company and its investment
subsidiary have no obligations to provide support and have sufficient cash and
other liquid resources to continue as a going concern on a standalone basis.
Wilson Sons
Wilson Sons has adequate cash, other liquid resources and undrawn credit
facilities to enable it to meet its obligations as they fall due in order to
continue its operations. All of the debt, as set out in note 16, and all of
the lease liabilities, as set out in note 12, relate to Wilson Sons, and
generally have a long maturity profile. The debt held by Wilson Sons is
subject to covenant compliance tests as summarised in note 16, which were
satisfied at 30 June 2024.
Based on the Board's review of Wilson Sons' going concern assessment and the
liquidity and cash flow reviews of the Company and its subsidiary OWIL, the
Directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable
future. Accordingly, the Directors continue to adopt the going concern basis
in preparing the interim consolidated financial statements.
Responsibility statement
The Directors confirm that this interim financial information has been
prepared in accordance with IAS 34 and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
· an indication of important events that have occurred during the
first six months and their impact on the set of interim consolidated financial
statements and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related party transactions in the first six months and
any material changes in the related party transactions described in the last
Annual Report.
Caroline Foulger
Chair
8 August 2024
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Interim Consolidated Statement of Profit or Loss and Other Comprehensive
Income
(Unaudited) for the 6 months ended 30 June 2024
(Expressed in thousands of US Dollars)
Note Unaudited Unaudited
30 June 2024 30 June 2023
Sales of services 4 262,363 229,663
Raw materials and consumables used (18,216) (17,749)
Employee charges and benefits expense (74,961) (67,592)
Other operating expenses (62,543) (55,190)
Depreciation of owned assets 11 (28,749) (27,665)
Depreciation of right-of-use assets 12 (7,427) (6,943)
Amortisation of intangible assets 13 (876) (1,047)
Gain on disposal of property, plant and equipment 29 1,716
Foreign exchange (loss)/gain on monetary items (1,224) 678
Operating profit 68,396 55,871
Share of results of joint ventures and associates 10 103 6,045
Return on investment portfolio 4 12,308 12,694
Investment portfolio management fees (1,581) (1,477)
Other income 4 4,944 3,233
Finance costs 5 (18,512) (18,059)
Profit before tax 65,658 58,307
Tax expense 6 (27,231) (10,442)
Profit for the period 38,427 47,865
Other comprehensive income:
Items that will be or may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations (16,764) 9,426
Other comprehensive (loss)/income for the period (16,764) 9,426
Total comprehensive income for the period 21,663 57,291
Profit for the period attributable to:
Equity holders of the Company 25,153 30,492
Non-controlling interests 13,274 17,373
38,427 47,865
Total comprehensive income for the period attributable to:
Equity holders of the Company 15,704 35,813
Non-controlling interests 5,959 21,478
21,663 57,291
Earnings per share:
Basic and diluted 20 71.1c 86.2c
The accompanying notes are an integral part of these interim consolidated
financial statements.
Interim Consolidated Statement of Financial Position
(Unaudited) at 30 June 2024
(Expressed in thousands of US Dollars)
Note Unaudited Audited
30 June 2024 31 December 2023
Current assets
Cash and cash equivalents 7 66,183 69,367
Investment portfolio 8 313,616 309,158
Recoverable taxes 28,704 47,708
Trade receivables 9 64,680 65,694
Other current assets 19,049 13,281
Inventories 17,632 18,171
509,864 523,379
Non-current assets
Other receivables 9 13,053 13,041
Other non-current assets 3,235 5,792
Recoverable taxes 23,403 20,680
Investment in joint ventures and associates 10 95,657 96,084
Deferred tax assets 23,075 22,827
Property, plant and equipment 11 584,814 614,099
Right-of-use assets 12 180,789 198,508
Other intangible assets 13 12,316 13,858
Goodwill 14 13,281 13,597
949,623 998,486
Total assets 1,459,487 1,521,865
Current liabilities
Trade and other payables 15 (70,978) (71,768)
Bank loans 16 (79,476) (70,856)
Tax liabilities (9,471) (10,831)
Lease liabilities 12 (25,865) (28,783)
(185,790) (182,238)
Net current assets 324,074 341,141
Non-current liabilities
Bank loans 16 (220,899) (253,345)
Deferred tax liabilities (77,264) (65,596)
Lease liabilities 12 (176,608) (195,503)
Provisions for legal claims 17 (7,251) (7,322)
Post-employment benefits (1,864) (2,047)
(483,886) (523,813)
Total liabilities (669,676) (706,051)
Capital and reserves
Share capital 11,390 11,390
Retained earnings 671,956 676,817
Translation reserve (96,152) (86,703)
Equity attributable to equity holders of the Company 587,194 601,504
Non-controlling interests 202,617 214,310
Total equity 789,811 815,814
The accompanying notes are an integral part of these interim consolidated
financial statements.
Signed on behalf of the Board
F. Beck
A. Berzins
Director
Director
Interim Consolidated Statement of Changes in Equity
(Unaudited) for the 6 months ended 30 June 2024
(Expressed in thousands of US Dollars)
Share capital Retained earnings Translation reserve Attributable to equity holders of the Company Non-controlling interests Total equity
Balance at 1 January 2023 11,390 634,910 (91,692) 554,608 199,518 754,128
Currency translation adjustment - - 5,320 5,320 4,106 9,426
Profit for the period - 30,492 - 30,492 17,373 47,865
Total comprehensive income for the period - 30,492 5,320 35,812 21,479 57,291
Dividends (note 19) - (24,754) - (24,754) (12,394) (37,148)
Equity transactions in subsidiary - (467) - (467) 68 (399)
Balance at 30 June 2023 11,390 640,181 (86,372) 565,199 208,671 773,870
Balance at 1 January 2024 11,390 676,817 (86,703) 601,504 214,310 815,814
Currency translation adjustment - - (9,449) (9,449) (7,315) (16,764)
Profit for the period - 25,153 - 25,153 13,274 38,427
Total comprehensive income/(loss) for the period - 25,153 (9,449) 15,704 5,959 21,663
Dividends (note 19) - (30,059) - (30,059) (17,686) (47,745)
Equity transactions in subsidiary - 45 - 45 34 79
Balance at 30 June 2024 11,390 671,956 (96,152) 587,194 202,617 789,811
The accompanying notes are an integral part of these interim consolidated
financial statements.
Translation reserve
The translation reserve arises from exchange differences on the translation of
operations with a functional currency other than US Dollars.
Equity transactions in subsidiary
Wilson Sons S.A. ("Wilson Sons"), a controlled subsidiary listed on the Novo
Mercado exchange, has in place a share option plan and a share buyback plan.
During the period ended 30 June 2024, no share options of Wilson Sons were
exercised and no shares of Wilson Sons were repurchased. During the period
ended 30 June 2023, 1,680,600 share options of Wilson Sons were exercised and
1,150,500 shares of Wilson Sons were repurchased, resulting in a net increase
in non-controlling interest of 0.06%.
Amounts in the statement of changes of equity are stated net of tax where
applicable.
Interim Consolidated Statement of Cash Flow
(Unaudited) for the 6 months ended 30 June 2024
(Expressed in thousands of US Dollars)
Note Unaudited Unaudited
30 June 2024 30 June 2023
Operating activities
Profit for the period 38,427 47,865
Adjustment for:
Depreciation & amortisation 11,12,13 37,052 35,655
Gain on disposal of property, plant and equipment (29) (1,716)
Provisions for legal claims 17 896 (616)
Share of results of joint ventures and associates 10 (103) (6,045)
Returns on investment portfolio 8 (12,308) (12,694)
Other income 4 (4,944) (3,233)
Finance costs 5 18,512 18,059
Foreign exchange (loss)/gain on monetary items 1,224 (678)
Share based payment expense in subsidiary 79 152
Tax expense 6 27,231 10,442
Changes in:
Inventories 539 1,047
Trade and other receivables 9 1,002 (16,693)
Other current and non-current assets (3,211) (1,043)
Trade and other payables 15 10,655 5,188
Interest paid (16,284) (16,495)
Taxes paid (8,240) (13,681)
Net cash inflow from operating activities 90,498 45,514
Investing activities
Income received from financial assets 3,152 2,049
Purchase of investment portfolio assets (20,346) (42,402)
Proceeds on disposal of investment portfolio assets 28,077 12,249
Purchase of property, plant and equipment 11 (26,334) (31,714)
Proceeds on disposal of property, plant and equipment 122 1,852
Purchase of intangible assets 13 (147) (290)
Investment in joint ventures and associates 10 - (4,986)
Net cash outflow from investing activities (15,476) (63,242)
Financing activities
Dividends paid to equity holders of the Company 19 (30,059) (24,754)
Dividends paid to non-controlling interests in subsidiary (17,686) (12,394)
Repayments of bank loans principal 16 (26,043) (36,218)
Payments of lease liabilities 12 (5,656) (4,927)
New bank loans drawn down 16 13,067 29,024
Shares repurchased in subsidiary - (2,338)
Issue of new shares in subsidiary under employee share option plan - 1,787
Net cash outflow from financing activities (66,377) (49,820)
Net increase/(decrease) in cash and cash equivalents 8,645 (67,548)
Cash and cash equivalents at the beginning of the period 69,367 75,724
Effect of foreign exchange rate changes (11,829) 6,686
Cash and cash equivalents at the end of the period 66,183 14,862
The accompanying notes are an integral part of these interim consolidated
financial statements.
Notes to the Interim Consolidated Financial Statements
(Unaudited) for the 6 months ended 30 June 2024
(Expressed in thousands of US Dollars)
1 General Information
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 incorporated in Bermuda under the Companies Act
1981 and the Ocean Wilsons Holdings Limited Act, 1991. The Company's
registered office is Clarendon House, 2 Church Street, Hamilton, Bermuda.
These interim consolidated financial statements comprise the Company and its
subsidiaries (the "Group").
These interim consolidated financial statements were approved by the Board on
8 August 2024.
2 Material accounting policies
These interim consolidated financial statements have been prepared in
accordance with IAS 34 - Interim Financial Reporting and follow the same
accounting policies disclosed in the Company's 31 December 2023 annual report.
These interim consolidated financial statements do not include all the
information required in the annual report and should be read in conjunction
with the Company's 31 December 2023 annual report.
3 Business and geographical segments
The Group has two reportable segments: maritime services and investments.
These segments report their financial and operational data separately to the
Board. The Board considers these segments separately when making business and
investment decisions. The maritime services segment provides towage and ship
agency, port terminals, offshore, logistics and shipyard services in Brazil.
The investments segment holds a portfolio of international investments and is
a Bermuda based company. The corporate segment includes the unallocated
corporate costs.
Brazil - Bermuda - investments Corporate Consolidated
maritime services
Result for the period ended 30 June 2024 (unaudited)
Sale of services 262,363 - - 262,363
Net return on investment portfolio - 10,727 - 10,727
Profit/(loss) before tax 57,247 10,583 (2,172) 65,658
Tax expense (27,231) - - (27,231)
Profit/(loss) after tax 30,016 10,583 (2,172) 38,427
Financial position at 30 June 2024 (unaudited)
Segment assets 1,126,396 320,480 12,611 1,459,487
Segment liabilities (668,388) (1,232) (56) (669,676)
Brazil - Bermuda - investments Corporate Consolidated
maritime services
Result for the period ended 30 June 2023 (unaudited)
Sale of services 229,663 - - 229,663
Net return on investment portfolio - 11,217 - 11,217
Profit/(loss) before tax 49,402 11,060 (2,155) 58,307
Tax expense (10,442) - - (10,442)
Profit/(loss) after tax 38,960 11,060 (2,155) 47,865
Financial position at 31 December 2023 (audited)
Segment assets 1,191,179 310,944 19,742 1,521,865
Segment liabilities (704,976) (779) (296) (706,051)
4 Revenue
An analysis of the Group's revenue is as follows:
Unaudited Unaudited
30 June 2024 30 June 2023
Sale of services 262,363 229,663
Net income from investment portfolio 119 746
Profit on disposal of investment portfolio assets 6,390 1,495
Unrealised gain on investment portfolio assets 5,799 10,453
Returns on investment portfolio 12,308 12,694
Income generated by cash and cash equivalents 2,790 2,058
Tax credits and legal deposits monetary adjustments 1,488 839
Other income 666 336
Other income 4,944 3,233
Total Revenue 279,615 246,780
All revenue for the period ended 30 June 2024 and 2023 was derived from
continuing operations.
The Group derives its revenue from contracts with customers from the sale of
services in its Brazil - maritime services segment. The revenue from contracts
with customers can be disaggregated as follows:
Unaudited Unaudited
30 June 2024 30 June 2023
Harbour manoeuvres 113,547 102,935
Special operations 10,695 11,730
Ship agency 6,130 5,230
Towage and ship agency services 130,372 119,895
Container handling 48,724 39,852
Warehousing 24,585 19,194
Ancillary services 14,854 10,263
Offshore support bases 10,086 8,324
Other port terminal services 11,432 7,898
Port terminals 109,681 85,531
Logistics 16,647 19,946
Shipyard 5,663 3,803
Other services - 488
Total Revenue from contracts with customers 262,363 229,663
At 30 June 2024 and 2023, there were no warranties or refund obligations
associated with shipyard contracts, for which performance obligation are
satisfied over time.
The revenue from contracts with customers based on the timing of performance
obligations can be disaggregated as follows:
Unaudited Unaudited
30 June 2024 30 June 2023
At a point in time 256,700 225,860
Over time 5,663 3,803
Total Revenue from contracts with customers 262,363 229,663
Contract balance
Operational trade receivables are generally due and received within 30 days.
The carrying amount of operational trade receivables at the end of the
reporting period was US$64.7 million (31 December 2023: US$65.7 million).
These amounts include US$19.6 million (31 December 2023: US$20.9 million) of
contract assets (unbilled accounts receivables). There were no contract
liabilities as of 30 June 2024 (31 December 2023: none).
5 Finance costs
Finance costs are classified as follows:
Unaudited Unaudited
30 June 2024 30 June 2023
Interest on lease liabilities (8,716) (8,211)
Interest on borrowings (8,266) (9,079)
Exchange loss on foreign currency borrowings (1,026) (367)
Other finance costs (504) (402)
Finance costs (18,512) (18,059)
6 Taxation
At the present time, no income, profit, capital or capital gain taxes are
applicable to the Group's operations in Bermuda and accordingly, no expenses
or provisions for such taxes have been recorded by the Group for its Bermuda
operations. The Company has received an undertaking from the Bermuda
government exempting it from all such taxes until 31 March 2035. The Company
is currently not in scope for the Bermuda Corporate Income Tax Act of 2023, as
such the exemptions provided by the Bermuda government undertaking still
apply.
The reconciliation of the tax expense recognised in profit or loss is as
follows:
Unaudited Unaudited
30 June 2024 30 June 2023
Current tax expense
Brazilian corporation tax (9,101) (9,962)
Brazilian social contribution (4,008) (3,824)
Total current tax expense (13,109) (13,786)
Deferred tax - origination and reversal of timing differences
Charge for the period in respect of deferred tax liabilities (15,340) (7,961)
Credit for the period in respect of deferred tax assets 1,218 11,305
Total deferred tax (expense)/credit (14,122) 3,344
Total tax expense (27,231) (10,442)
Brazilian corporation tax is calculated at 25% (2023: 25%) of the taxable
profit for the period. Brazilian social contribution tax is calculated at 9%
(2023: 9%) of the taxable profit for the period.
7 Cash and cash equivalents
The composition of cash and cash equivalents is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Cash and bank deposits 24,721 19,799
Time deposits 8,150 19,920
Fixed income investments 33,312 29,648
Total cash and cash equivalents 66,183 69,367
Fixed income investments include an investment fund and an exchange traded
fund both privately managed within the Brazil - maritime service segment. The
funds underlying investments are highly liquid and readily convertible.
8 Investment portfolio
The movement in the investment portfolio is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Opening balance - 1 January 309,158 272,931
Additions, at cost 20,346 42,674
Disposals, at market value (28,077) (33,545)
Profit on disposal of investment portfolio assets 6,390 9,080
Unrealised gain on investment portfolio assets 5,799 18,018
Closing balance 313,616 309,158
The investment portfolio is held in the Bermuda - investments segment and
presents the Group with opportunity for return through generated income and
capital appreciation. It includes investments in listed equity securities,
open ended funds, limited partnerships and other private equity funds.
At the end of the reporting period, the Group had entered into commitment
agreements with respect to the investment portfolio for capital subscriptions.
The classification of those commitments based on their expiry date is as
follows:
Unaudited Audited
30 June 2024 31 December 2023
Within one year 4,051 4,557
In the second to fifth year inclusive 6,348 4,621
After five years 37,425 44,585
Total 47,824 53,763
9 Trade and other receivables
Trade and other receivables are classified as follows:
Unaudited Audited
30 June 2024 31 December 2023
Current
Trade receivable for the sale of services 46,823 46,381
Unbilled trade receivables 19,616 20,936
Total gross current trade receivables 66,439 67,317
Allowance for expected credit loss (1,759) (1,623)
Trade receivables 64,680 65,694
Non-current
Receivables from related parties (note 18) 11,664 11,494
Other receivables 1,389 1,547
Total other receivables 13,053 13,041
Total trade and other receivables 77,733 78,735
The ageing of the trade receivables is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Current 52,876 48,593
From 0 - 30 days 8,066 9,313
From 31 - 90 days 2,089 6,561
From 91 - 180 days 1,530 954
More than 180 days 1,878 1,896
Total gross trade receivables 66,439 67,317
The movement in allowance for expected credit loss is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Opening balance - 1 January (1,623) (792)
Increase in allowance recognised in profit or loss (228) (733)
Exchange differences 92 (98)
Closing balance (1,759) (1,623)
10 Joint ventures and associates
The Group holds the following significant interests in joint ventures and
associates at the end of the reporting period:
Proportion of ownership
Place of incorporation and operation Unaudited Unaudited
30 June 2024 30 June 2023
Joint ventures
Logistics
Porto Campinas, Logística e Intermodal Ltda Brazil 50% 50%
Offshore
Wilson Sons Ultratug Participações S.A. Brazil 50% 50%
Atlantic Offshore S.A. Panamá 50% 50%
Associates
Argonáutica Engenharia e Pesquisas S.A. Brazil 32.32% 32.32%
The financial information of the joint ventures and associates and its
reconciliation to the share of result of joint ventures and associates is as
follows:
Unaudited Unaudited
30 June 2024 30 June 2023
Sales of services 122,439 106,209
Operating expenses (78,670) (64,981)
Depreciation and amortisation (28,522) (25,363)
Foreign exchange (loss)/gain on monetary items (8,641) 6,245
Results from operating activities 6,606 22,110
Finance income 374 725
Finance costs (6,084) (5,533)
Profit before tax 896 17,302
Tax expense (544) (5,165)
Total profit for the period generated by joint ventures and associates 352 12,137
Joint ventures reconciliation:
Total (loss)/profit for the period (57) 12,004
Participation 50% 50%
Share of result for the period from joint ventures (29) 6,002
Associates reconciliation:
Total profit for the period 409 133
Participation 32.32% 32.32%
Share of result for the period for associates 132 43
Share of result of joint ventures and associates 103 6,045
The financial information of the joint ventures and associates and its
reconciliation to the investment in joint ventures and associates is as
follows:
Unaudited Audited
30 June 2024 31 December 2023
Cash and cash equivalents 23,197 19,410
Other current assets 66,953 65,531
Non-current assets 517,794 528,271
Total assets 607,944 613,212
Trade and other payables (25,066) (32,019)
Other current liabilities (60,291) (58,779)
Non-current liabilities (318,915) (316,248)
Total liabilities (404,272) (407,046)
Total net assets of joint ventures and associates 203,672 206,166
Joint ventures reconciliation:
Total net assets 201,770 204,655
Participation 50% 50%
Group's share of net assets of joint ventures 100,885 102,328
Associates reconciliation:
Total net assets 1,902 1,511
Participation 32.32% 32.32%
Group's share of net assets of associates 615 488
Adjustments for:
Goodwill and surplus 1,825 1,862
Cumulative elimination of profit on construction contracts (7,668) (8,594)
Total adjustments (5,843) (6,732)
Investment in joint ventures and associates 95,657 96,084
The movement in investment in joint ventures and associates is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Opening balance - 1 January 96,084 81,863
Share of result of joint ventures and associates 103 6,447
Elimination of profit on construction contracts (1) (81)
Share of other comprehensive income of joint ventures and associates (529) 335
Capital increase - 7,520
Closing balance 95,657 96,084
Guarantees, covenants and capital commitments
Wilson Sons Ultratug Participações S.A. has loans with the Brazilian
Development Bank guaranteed by a lien on the financed supply vessels and by a
corporate guarantee from its participants, proportionate to their ownership.
The Group's subsidiary Wilson Sons S.A. is guaranteeing US$153.6 million (31
December 2023: US$155.3 million).
Wilson Sons Ultratug Participações S.A. has a loan with Banco do Brasil
guaranteed by a pledge on the financed offshore support vessels, a letter of
credit issued by Banco del Estado de Chile and its long-term contracts with
Petrobras. The joint venture also has to maintain a cash reserve account until
full repayment of the loan agreement amounting to US$1.8 million (31 December
2023: US$1.8 million) presented as long-term investment.
On 30 June 2024 and 31 December 2023, Wilson Sons Ultratug Participações
S.A. was in compliance with all of its covenants related to its loans with the
Brazilian Development Bank and with Banco do Brasil.
There were no capital commitments for the joint ventures and associates as of
30 June 2024 and 31 December 2023.
11 Property, plant and equipment
Property, plant and equipment are classified as follows:
Land, buildings and leasehold improvements Floating Craft Vehicles, plant Assets under Total
and equipment construction
Cost
At 1 January 2023 294,535 576,891 211,985 14,391 1,097,802
Additions 12,096 12,547 16,662 23,831 65,136
Transfers (27) 22,248 (1,284) (20,937) -
Transfers from intangible assets 25 - 8 - 33
Disposals (511) (75) (1,985) - (2,571)
Exchange differences 14,238 - 13,664 - 27,902
At 1 January 2024 320,356 611,611 239,050 17,285 1,188,302
Additions 2,187 12,133 7,960 4,054 26,334
Transfers (1) 10,694 1 (10,694) -
Transfers from intangible assets 190 - 19 - 209
Disposals (81) (60) (1,317) - (1,458)
Exchange differences (26,404) - (25,362) - (51,766)
At 30 June 2024 296,247 634,378 220,351 10,645 1,161,621
Accumulated depreciation
At 1 January 2023 93,168 288,328 126,677 - 508,173
Charge for the period 9,330 33,647 12,489 - 55,466
Elimination on construction contracts - 2 - - 2
Disposals (406) (70) (1,850) - (2,326)
Exchange differences 5,008 - 7,880 - 12,888
At 1 January 2024 107,100 321,907 145,196 - 574,203
Charge for the period 4,933 17,704 6,112 - 28,749
Elimination on construction contracts - 14 - - 14
Transfers 3 - (3) - -
Disposals (85) (59) (1,221) - (1,365)
Exchange differences (9,697) - (15,097) - (24,794)
At 30 June 2024 102,254 339,566 134,987 - 576,807
Carrying Amount
At 31 December 2023 (audited) 213,256 289,704 93,854 17,285 614,099
At 30 June 2024 (unaudited) 193,993 294,812 85,364 10,645 584,814
Land and buildings with a net book value of US$0.2 million (31 December 2023:
US$0.2 million) and plant and equipment with a carrying amount of US$0.04
million (31 December 2023: US$0.05 million) have been given in guarantee for
various legal processes.
The amount of borrowing costs capitalised in the period ending 30 June 2024
was US$0.1 million at an average interest rate of 4.8% (30 June 2023: US$0.1
million, 5.4%).
The Group has contractual commitments to suppliers for the acquisition and
construction of property, plant and equipment amounting to US$5.5 million (31
December 2023: US$7.9 million).
12 Lease arrangements
Right-of-use assets
Right-of-use assets are classified as follows:
Operational facilities Floating Buildings Vehicles, plant and equipment Total
craft
Cost
At 1 January 2023 195,332 19,602 3,081 10,132 228,147
Additions 83 2,136 61 1,254 3,534
Contractual amendments 9,146 10,197 70 (93) 19,320
Terminated contracts - - (368) (763) (1,131)
Exchange differences 14,839 706 229 417 16,191
At 1 January 2024 219,400 32,641 3,073 10,947 266,061
Additions - - 948 28 976
Contractual amendments 7,418 4,309 400 185 12,312
Terminated contracts - - (3,303) (325) (3,628)
Exchange differences (27,623) (1,261) 2,739 (735) (26,880)
At 30 June 2024 199,195 35,689 3,857 10,100 248,841
Accumulated depreciation
At 1 January 2023 27,646 12,035 1,511 8,256 49,448
Charge for the period 8,973 5,351 498 915 15,737
Terminated contracts - - (326) (651) (977)
Exchange differences 2,300 492 198 355 3,345
At 1 January 2024 38,919 17,878 1,881 8,875 67,553
Charge for the period 4,568 2,925 268 413 8,174
Terminated contracts - - (3,224) (269) (3,493)
Exchange differences (5,159) (1,122) 2,719 (620) (4,182)
At 30 June 2024 38,328 19,681 1,644 8,399 68,052
Carrying Amount
At 31 December 2023 (audited) 180,481 14,763 1,192 2,072 198,508
At 30 June 2024 (unaudited) 160,867 16,008 2,213 1,701 180,789
The reconciliation of depreciation of right-of-use assets is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Depreciation of right-of-use assets (8,174) (15,737)
PIS and COFINS taxes 747 1,432
Net depreciation of right-of-use assets (7,427) (14,305)
Lease liabilities
Lease liabilities are classified as follows:
Unaudited Audited
30 June 2024 31 December 2023
Operational facilities (182,670) (204,424)
Floating craft (15,411) (15,625)
Buildings (2,632) (1,984)
Vehicles, plant and equipment (1,760) (2,253)
Total (202,473) (224,286)
Total current (25,865) (28,783)
Total non-current (176,608) (195,503)
The movement in lease liabilities is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Opening balance - 1 January (224,286) (196,176)
Additions (976) (3,534)
Contracts remeasurement (12,312) (19,320)
Termination of contracts 135 154
Gain/(loss) on termination of contracts(1) 60 (2)
Discounts 95 183
Principal amortisation 15,018 28,384
Interest (9,362) (18,297)
Exchange differences 29,155 (15,678)
Closing balance (202,473) (224,286)
1. Included in other finance costs (note 5 - finance costs)
The reconciliation of interest on lease liabilities is as follow:
Unaudited Audited
30 June 2024 31 December 2023
Interest on lease liabilities (9,362) (18,297)
PIS and COFINS taxes 646 1,199
Net interest on lease liabilities (8,716) (17,098)
The contractual undiscounted cash flows related to leases liabilities are as
follows:
Unaudited Audited
30 June 2024 31 December 2023
Within one year (27,128) (30,196)
In the second year (24,723) (27,100)
In the third to fifth years inclusive (62,763) (68,652)
After five years (337,862) (382,424)
Total cash flows (452,476) (508,372)
Adjustment to present value 250,003 284,086
Total lease liabilities (202,473) (224,286)
13 Other intangible assets
Other intangible assets are classified as follows:
Computer Software Concession- Total
rights
Cost
At 1 January 2023 41,822 15,825 57,647
Additions 1,132 - 1,132
Transfers to property, plant and equipment (33) - (33)
Disposals (41) - (41)
Exchange differences 735 462 1,197
At 1 January 2024 43,615 16,287 59,902
Additions 147 - 147
Transfers to property, plant and equipment (209) - (209)
Disposals (3) - (3)
Exchange differences (1,364) (825) (2,189)
At 30 June 2024 42,186 15,462 57,648
Accumulated amortisation
At 1 January 2023 36,781 6,474 43,255
Charge for the period 1,570 427 1,997
Disposals (41) - (41)
Exchange differences 574 259 833
At 1 January 2024 38,884 7,160 46,044
Charge for the period 663 213 876
Disposals (3) - (3)
Exchange differences (1,108) (477) (1,585)
At 30 June 2024 38,436 6,896 45,332
Carrying amount
At 31 December 2023 (audited) 4,731 9,127 13,858
At 30 June 2024 (unaudited) 3,750 8,566 12,316
14 Goodwill
Goodwill is classified as follows:
Tecon Rio Grande Tecon Salvador Total
Carrying amount
At 1 January 2023 10,940 2,480 13,420
Exchange differences 177 - 177
At 1 January 2024 11,117 2,480 13,597
Exchange differences (316) - (316)
At 30 June 2024 10,801 2,480 13,281
The goodwill associated with each cash-generating unit "CGU" (Tecon Rio Grande
and Tecon Salvador) is attributed to the Brazil - maritime services segment.
15 Trade and other payables
Trade and other payables are classified as follows:
Unaudited Audited
30 June 2024 31 December 2023
Trade payables and accruals (44,048) (43,420)
Payables from related parties (note 18) (271) (820)
Deferred income (3,927) (2,084)
Provisions for employee benefits (19,961) (25,279)
Other payables (2,771) (165)
Total trade and other payables (70,978) (71,768)
16 Bank loans
The movement in bank loans is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Opening balance - 1 January (324,201) (321,891)
Additions (13,067) (53,259)
Principal amortisation 26,043 61,148
Interest amortisation 6,922 14,088
Accrued interest (8,325) (17,140)
Exchange difference 12,253 (7,147)
Closing balance (300,375) (324,201)
The analysis of bank loans by maturity is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Within one year (79,476) (70,856)
In the second year (34,829) (54,121)
In the third to fifth years (inclusive) (85,665) (91,027)
After five years (100,405) (108,197)
Total bank loans (300,375) (324,201)
Guarantees and covenants
The Group has pledged assets with a carrying value of US$257.9 million (31
December 2023: US$252.9 million) to secure loans granted to the Group.
A portion of the loan agreements relies on corporate guarantees from the
Group's subsidiary party to the agreement. For some agreements, the corporate
guarantees are in addition to the assignment of receivables, a pledge of the
respective financed tugboat or a lien over the logistics and port operations
equipment financed (note 11).
At 30 June 2024 and 31 December 2023, the Group was in compliance with all
covenants related to its loan agreements.
17 Provisions and contingent liabilities for legal claims
In the normal course of its operations in Brazil, the Group is exposed to
numerous local legal claims. The Group's policy is to vigorously contest those
claims, given many are deemed to have little substance or merit, and to manage
such claims through its legal counsel.
The movement in the carrying amount of each class of provision for legal
claims for the period is as follows:
Labour claims Tax cases Civil cases Total
At 1 January 2024 (4,205) (1,476) (1,641) (7,322)
Additional provisions (361) (1,204) (203) (1,768)
Unused amounts reversed 782 - 79 861
Utilisation of provisions 3 - 8 11
Exchange difference 506 234 227 967
At 30 June 2024 (3,275) (2,446) (1,530) (7,251)
The contingent liabilities at the end of each period are as follows:
Labour claims Tax cases Civil cases Total
At 31 December 2023 (7,312) (75,982) (13,536) (96,830)
At 30 June 2024 (7,065) (65,997) (5,902) (78,964)
Other non-current assets of US$2.7 million (31 December 2023: US$3.1 million)
represent legal deposits required by the Brazilian legal authorities as
security to contest legal actions.
18 Related party transactions
Transactions between the Group and its subsidiaries which are related parties
have been eliminated on consolidation and are not disclosed in this note.
Transactions and outstanding balances between the Group and its related
parties are as follows:
Revenues/(Expenses) Receivable/(Payable)
Unaudited Unaudited Unaudited Audited
30 June 2024 30 June 2023 30 June 2024 31 December 2023
Joint ventures and associates
Wilson Sons Ultratug Participações S.A.(1) 571 602 11,644 11,437
Argonáutica Engenharia e Pesquisas S.A.(2) (25) - (4) (4)
Porto Campinas Logística e Intermodal Ltda(3) - - 15 -
Others
Hanseatic Asset Management LBG(4) (1,581) (1,477) (262) (759)
Hansa Capital Partners LLP(5) (32) (30) - -
1. Related party loan (interest - 3.6% per year with no maturity
date) and services provided by the Group.
2. ( ) Contract for the implementation of a port traffic
monitoring and port traffic intelligence system.
3. Advance for future capital increase.
4. Mr William Salomon (Board Director) is chair and Mr Christopher
Townsend (Board Director) is a director of Hanseatic Asset Management LBG, to
which fees were paid for acting as Investment Manager of the Group's
investment portfolio.
5. Mr Salomon is a senior partner of Hansa Capital Partners LLP.
Office facilities charges were paid to Hansa Capital Partners LLP
Remuneration of key management personnel
The remuneration of the executives and other key management of the Group is as
follows:
Unaudited Unaudited
30 June 2024 30 June 2023
Short-term employee benefits (3,807) (2,459)
Post-employment benefits (32) (35)
Share based payment expense (79) (153)
Total remuneration of key management (3,918) (2,647)
19 Dividends
The following dividends were declared and paid by the Company:
Unaudited Unaudited
30 June 2024 30 June 2023
85c per share (2023: 70c per share) 30,059 24,754
20 Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Unaudited Unaudited
30 June 2024 30 June 2023
Profit for the period attributable to equity holders of the Company 25,153 30,492
Weighted average number of ordinary shares 35,363,040 35,363,040
Earnings per share - basic and diluted 71.1c 86.2c
The Company has no dilutive or potentially dilutive ordinary shares.
21 Financial instruments
The carrying and fair value of financial instruments are as follows:
Unaudited 30 June 2024 Audited 31 December 2023
Carrying value Fair value Carrying value Fair value
Financial assets
Cash and cash equivalents 66,183 66,183 69,367 69,367
Investment portfolio 313,616 313,616 309,158 309,158
Trade and other receivables 77,733 77,733 78,735 78,735
Financial liabilities
Trade and other payables (70,978) (70,978) (71,768) (71,768)
Bank loans (300,375) (300,106) (324,201) (323,904)
The carrying value of cash and cash equivalents, trade and other receivables,
and trade and other payable is a reasonable approximation of their fair value.
The fair value of bank loans was established as their present value determined
by future cash flows and interest rates applicable to instruments of similar
nature, terms and risks or at market quotations of these securities.
The fair value of the investment portfolio assets are based on quoted market
prices at the close of trading at the end of the period if traded in active
markets and based on valuation techniques if not traded in active markets.
These valuation techniques maximise the use of observable market data where it
is available and rely as little as possible on entity specific estimates.
Fair value measurements recognised in the consolidated financial statements
are grouped into levels based on the degree to which the fair value is
observable.
Financial instruments whose values are based on quoted market prices in active
markets are classified as Level 1. These include active listed equities.
Financial instruments that trade in markets that are not considered active but
are valued based on quoted market prices, dealer quotations or alternative
pricing sources supported by observable inputs are classified as Level 2.
These include open ended funds, certain private investments that are traded
over the counter, and debt instruments.
Financial instruments that have significant unobservable inputs as they trade
infrequently and are not quoted in an active market are classified as Level 3.
These include investments in limited partnerships and other private equity
funds which may be subject to restrictions on redemptions such as lock up
periods, redemption gates and side pockets.
The Group considers the valuation techniques and inputs used in valuing these
funds as part of its due diligence prior to investing to ensure they are
reasonable and appropriate. Therefore, the net asset value ("NAV") of these
funds may be used as an input into measuring their fair value. In measuring
this fair value, the NAV of the funds is adjusted, if necessary, for other
relevant factors known of the fund. In measuring fair value, consideration is
also paid to any clearly identifiable transactions in the shares of the fund.
Depending on the nature and level of adjustments needed to the NAV and the
level of trading in the fund, the Group classifies these funds as either Level
2 or Level 3. As observable prices are not available for these securities, the
Group values these based on an estimate of their fair value. The Group obtains
the fair value of their holdings from valuation statements provided by the
managers of the invested funds. Where the valuation statement is not stated at
the reporting date, the Group adjusts the most recently available valuation
for any capital transactions made up to the reporting date. When considering
whether the NAV of the underlying managed funds represent fair value, the
Investment Manager considers the valuation techniques and inputs used by the
managed funds in determining their NAV.
The underlying funds use a blend of methods to determine the value of their
own NAV by valuing underlying investments using methodology consistent with
the International Private Equity and Venture Capital Valuation Guidelines
('IPEV'). IPEV guidelines generally provides five ways to determine the fair
market value of an investment: (i) binding offer on the company, (ii)
transaction multiples, (iii) market multiples, (iv) net assets and (v)
discounted cash flows. Such valuations are necessarily dependent upon the
reasonableness of the valuations by the fund managers of the underlying
investments. In the absence of contrary information, these values are relied
upon.
The financial instruments recognised in the statement of financial position,
by level of hierarchy, excluding financial instruments for which the carrying
amount is a reasonable approximation of fair value, are as follows:
Level 1 Level 2 Level 3 Total
30 June 2024 (unaudited)
Investment portfolio 37,302 158,692 117,622 313,616
Bank loans - (300,375) - (300,375)
31 December 2023 (audited)
Investment portfolio 34,058 156,829 118,271 309,158
Bank loans - (324,201) - (324,201)
During the period ended 30 June 2024, no financial instruments were
transferred between Level 1 and Level 2 (2023: none).
The movement in Level 3 financial instruments is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Opening balance - 1 January 118,271 120,366
Transfers from Level 3 to Level 2 - (5,266)
Purchases of investments and drawdowns of financial commitments 5,961 8,153
Sales of investments and repayments of capital (5,968) (8,314)
Realised gain 3,239 3,943
Unrealised loss (3,881) (611)
Closing balance 117,622 118,271
Cost 134,159 130,927
Cumulative unrealised losses (16,537) (12,656)
Investments in private equity funds require a long-term commitment with no
certainty of return. The Group's intention is to hold Level 3 investments to
maturity. In the unlikely event that the Group is required to liquidate these
investments, the proceeds received may be less than the carrying value due to
their illiquid nature.
The sensitivity of the Level 3 investments to changes in fair value due to
illiquidity and its impact on proceeds received, while all other variables are
held constant, is as follows:
Unaudited Audited
30 June 2024 31 December 2023
Decrease of 5% (5,881) (5,914)
Decrease of 10% (11,762) (11,827)
Decrease of 20% (23,524) (23,654)
ENQUIRIES
Company Contact
Leslie Rans, CPA
1 (441) 295 1309
Media
David Haggie
Haggie Partners LLP
020 7562 4444
Brokers
Peel Hunt
Edward Allsopp/Charles Batten
020 7418 8900
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EAKPPEEXLEFARecent news on Ocean Wilsons Holdings
See all newsREG - Ocean Wilsons Hldgs - Response to media speculation
AnnouncementREG - Ocean Wilsons Hldgs - Preliminary results for the period end 30 Jun 2024
AnnouncementREG - Ocean Wilsons Hldgs - Results of AGM held on 27 May 2024
AnnouncementREG - Ocean Wilsons Hldgs - Final Dividend 2024
AnnouncementREG - Ocean Wilsons Hldgs - 1st Quarter Results
Announcement