Half-yearly Report
BlackRock Latin American Investment Trust plc
Half Yearly Financial Results Announcement For Period Ended 30 June 2013
Performance Record
Financial Highlights
Attributable to ordinary shareholders 30 June 31 December
2013 2012 %
(unaudited) (audited) change
US dollar
Net assets* (US$'000)†313,408 399,713 -21.6
Net asset value per ordinary share - debt
at fair value*†796.23c 964.72c -17.5
- with income reinvested (debt at fair
value)* -15.3
Ordinary share price (mid-market)‡ 705.27c 861.52c -18.1
- with income reinvested -15.8
Sterling
Net assets* (£'000)‡†206,638 245,902 -16.0
Net asset value per ordinary share - debt
at fair value*‡†524.98p 593.49p -11.5
- with income reinvested (debt at fair
value)* -9.1
Ordinary share price (mid-market) 465.00p 530.00p -12.3
- with income reinvested -9.8
For the six For the six
months months
ended ended
30 June 30 June
2013 2012 %
(unaudited) (unaudited) change
Revenue
Net revenue after taxation (US$'000) 5,638 6,604 -14.6
Revenue return per ordinary share - debt
at fair value (US$ cents)* 13.95 15.44 -9.7
First interim dividend per ordinary share
(US$ cents) 15.00 5.00 +200.0
Source: BlackRock.
* In accordance with the Company's accounting policy (see note 6).
†The change in net assets reflects the tender offer implemented in the period
and market movements.
‡ Based on an exchange rate of 2013: 1.5167 (2012: 1.6255).
Chairman's Statement
for the six months ended 30 June 2013
Overview and Performance
After spending much of 2012 buffeted by external factors, including the lack
of solvency in some European states, deteriorating growth rates in China and
- towards the end of the year - the fiscal cliff in the US, Latin American
equity markets began the period with a renewed focus on specifically regional
issues. Early gains were short lived however, as earnings for the last quarter
of 2012 and the first quarter of 2013 disappointed, especially in Mexico.
More recently, renewed concerns about Chinese growth and the prospect that US
quantitative easing might be scaled back, or 'tapered', have combined with
domestic concerns, including the escalation of public protests in Brazil, and
doubts about the future path of Mexican and Brazilian economic growth. All
these factors have contributed to weakness in Latin American equities, which
underperformed broader emerging markets by 5.2% on a capital only basis in the
period.
Brazil was among the worst performers. Its Central Bank surprised the market
with a higher than expected 50 basis points increase in interest rates in May
in an effort to control inflation. Around the same time, data showed that growth
in the first quarter remained subdued. Despite the Central Bank and the Finance
Ministry using a number of tools to try and increase economic activity, Brazil
continued to suffer from lacklustre economic growth. In addition, the Brazilian
Real, along with other currencies in the region, has followed other emerging
market currencies and has fallen against the US dollar. Mexico, which had
previously been seen as a relatively safe haven over the last two years, also
suffered from weaker economic activity and earnings reported to date in 2013.
Against this background, the MSCI EM Latin America Index ended the period down
by 14.7% in US dollar terms (8.6% in sterling terms). By comparison the
Company's net asset value ("NAV") (with debt at fair value in accordance with
the Company's accounting policy (see note 6)) fell by 15.3% in US dollar
terms (9.1% in sterling terms) and the share price decreased by 15.8% in US
dollar terms (9.8% in sterling terms). (All percentages calculated with income
reinvested.)
In the period from 30 June 2013 to close of business on 21 August 2013, the
Company's NAV (debt at fair value in accordance with the Company's accounting
policy (see note 6)) has decreased by 8.8% in sterling terms and by 5.6% in US
dollar terms. The share price has decreased by 7.0% in sterling terms and by
3.8% in US dollar terms (all percentages calculated with income reinvested).
Dividends
I highlighted in the last annual report that the Board's policy is to at least
maintain dividend distributions, using reserves when necessary and to grow the
dividend over the medium term. The Board had also reviewed the split between the
two interim dividends historically paid by the Company and had concluded that a
more equal split of the Company's dividend for the financial year ending
31 December 2013 was desirable. The Company's revenue return per share for the
six months to 30 June 2013 amounted to 13.95 cents per share (2012: 15.44 cents
per share). The Board is therefore pleased to declare an increased first interim
dividend of 15 cents per share (2012: 5.00 cents per share), which will be paid
on 4 October 2013 to shareholders on the register as at 6 September 2013
(ex-dividend date of 4 September 2013). If the distribution level is maintained
at the same level as in 2012, this would represent a yield of 4.3% based on the
share price as at 30 June 2013.
Convertible bonds
On 15 September 2009 the Company issued US$80 million in nominal amount of 3.5%
unsecured convertible bonds 2015, and following the repurchase of US$16 million
bonds for cancellation in 2012, US$64 million remain outstanding.
During the period and up to the date of this report, no bonds have been converted
or purchased for cancellation.
Bondholders may subscribe for ordinary shares to which the convertible bonds relate
at any time up to 1 September 2015, being 10 business days prior to 15 September
2015, at a price of US$9.83 per share.
Repurchase of convertible bonds
The Board has decided to offer to repurchase by way of a tender offer all of the
outstanding convertible bonds (Bonds). The tender offer price will be US$1,000
per Bond, being the existing nominal value of the Bonds, less the costs of
implementing the tender offer. The tender offer notice is expected to be
despatched to holders of the Bonds (Bondholders) on or around 30 August 2013.
Bonds which are tendered are expected to be cancelled on Friday 13 September
2013, being the business day prior to the next interest payment date of
15 September 2013. Interest will be paid on these Bonds up to (but excluding)
15 September 2013 (or if not cancelled on 13 September 2013, up to (but excluding)
the date of cancellation of such Bonds). The payment of interest in respect of
the 6 monthly period up to (but excluding) 15 September 2013 will be made
separately from the repayment of the nominal value (less costs) of the Bonds.
Each of the Directors who holds Bonds currently intends to participate in the
tender offer in full.
In the event that Bonds with a value of less than US$20 million remain outstanding
after the tender offer has been completed (being less than 25% in nominal value of
the Bonds originally issued) the Company may, on giving not less than 15 nor more
than 45 days' notice in writing (Optional Conversion Notice) to the Trustee and
all Bondholders, convert, on the date (Optional Conversion Date) specified in the
Optional Conversion Notice, the whole (but not part only) of the Bonds into
ordinary shares at the conversion price applicable on the Optional Conversion
Date and in the event of such Optional Conversion Notice being given as aforesaid
the holding of Bonds of each Bondholder shall, be automatically converted at the
Conversion Price on the Optional Conversion Date, provided that each Bondholder
shall have the right, by giving written notice to the Company within 15 days
after the service of an Optional Conversion Notice, to irrevocably require the
Company, in lieu of converting, to repay the whole or such part as he may in such
notice specify of his Bonds at its nominal amount on the Optional Conversion Date
together with interest accrued up to but excluding the Optional Conversion Date.
It is expected that the repurchase of the Bonds will be financed by a combination
of a disposal of the Company's fixed interest holdings, cash currently held and
utilisation of the Company's overdraft facility. In the event that there is a
shortfall in the funds required or the Investment Manager believes that a lower
level of gearing is appropriate, cash will be raised via a disposal of equities.
A further announcement regarding the Company's level of gearing will be made
once the tender offer has been completed.
Discount control
As part of their discount control policy, the Directors of the Company have the
discretion to make semi-annual tender offers. The Directors exercised their
discretion to operate the semi-annual tender offer on 2 April 2013, being the
first business day following 31 March 2013. This was oversubscribed with
13,163,209 (31.8% of the ordinary shares in issue excluding treasury shares)
being tendered. Shareholders who tendered had their basic entitlement (5% of
their shares) satisfied in full and their election for further shares was scaled
back pro rata with each shareholder receiving 7.30063% of their election for
further shares. 2,071,662 ordinary shares were repurchased for a total
consideration of US$19,206,000 and were all transferred into treasury.
The Directors announced on 9 July 2013 that they had decided not to implement a
semi-annual tender offer in September 2013.
New Discount Control Mechanism
In conjunction with the Company's corporate advisers, Cenkos Securities plc,
the Board has recently conducted a review of its current discount control
policy and specifically the semi-annual tender offer mechanism.
Communications and meetings with shareholders during the course of the year,
including the views canvassed recently by Cenkos and the Board since the
announcement on 9 July 2013 that the Board were reviewing the use of tender
offers, have confirmed that a majority of shareholders share the Board's view
that small semi-annual tender offers should be discontinued. Most shareholders
favoured a tender mechanism with prescriptive triggers and also one which
contained a performance-related element.
The Board has therefore decided to discontinue its policy of discretionary
semi-annual tender offers and to introduce a new discount control policy
which in their view is better suited to the longer term interests of the
Company and shareholders as a whole.
The Board has concluded that, subject to the bi-annual continuation vote
being approved by shareholders on each occasion and with effect from the
Annual General Meeting to take place in April 2016, it will implement a
tender offer for 24.99% of the ordinary shares in issue (excluding treasury
shares) and the tender price will be the cum income NAV (less 2% to cover
the costs of the tender offer ) if (i) the Company has underperformed the
benchmark index on a US$ total return basis by more than 1% per annum over
the previous two financial years and (ii) if the discount to the cum income
NAV has on average exceeded 5% over the same two year period.
The Board also intends to renew its existing shareholder authority to buy
back up to 15% of its ordinary shares via on market purchases at the Annual
General Meeting in April 2014 in order to provide additional flexibility
with respect to controlling the discount, which may include making market
purchases when appropriate.
The Board
In line with the policy of regularly refreshing the composition of the Board,
Desmond O'Conor will be retiring at the Annual General Meeting in 2014.
Desmond has made an outstanding contribution to the Company during his tenure
as a Director. The depth of his knowledge of the Latin American region has
proved invaluable to our discussions and I am sure you would wish to join me in
expressing our gratitude for his service to the Company.
It is not our current intention to appoint a new Director to replace Desmond
and going forward the Board will normally consist of 5 Directors. I intend
to retire as Chairman no later than the Annual General Meeting in 2017 and a
new Director will be appointed in advance of my retirement.
Alternative Investment Fund Manager's Directive
The Alternative Investment Fund Managers' Directive ("the Directive") is a
European directive which seeks to reduce potential systemic risk by regulating
alternative investment fund managers ("AIFMs"). AIFMs are responsible for
investment products that fall within the category of Alternative Investment
Funds ("AIFs") and investment trusts are included in this. The Directive was
implemented on 22 July 2013 although it has been confirmed that the Financial
Conduct Authority ("FCA") will permit a transitional period of one year within
which UK AIFMs must seek authorisation. The Board is currently taking
independent advice on the consequences for the Company and has decided in
principle that BlackRock will be appointed as its AIFM in advance of the end of
the transitional period on 22 July 2014.
Outlook
Whilst it has been disconcerting to witness the recent increase in public
protests in Brazil, more important to the country's long term future will be
the nature of the political response. If the current environment prompts a more
populist policy response this could damage sentiment towards the region's
largest equity market. However, we believe that further structural reform
remains the most attractive route through which most Latin American countries
can sustain and boost their economic growth prospects further, and this will
ultimately be the path chosen by the politicians of the region's leading
economies. For this reason, although we expect volatility to continue over
the short term, particularly as markets adjust to the normalisation of
interest rates, over the longer term we remain optimistic about the prospects
for the region and we also consider that the current valuation levels are
attractive.
Peter Burnell
Chairman
23 August 2013
Interim Management Report and Responsibility Statement
The Chairman's Statement and the Investment Manager's Report give details of
the events which have occurred during the period and their impact on the
financial statements.
Principal risks and uncertainties
The principal risks faced by the Company can be divided into various areas as
follows:
- Performance;
- Income/dividend;
- Regulatory;
- Operational;
- Market;
- Liquidity;
- Third party service providers; and
- Financial.
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 2012. A detailed explanation can be found on pages 16 and 17 of the
Annual Report and Financial Statements which are available on the website
maintained by the Investment Manager, BlackRock Investment Management (UK)
Limited, at www.blackrock.co.uk/brla.
In the view of the Board, there have not been any changes to the fundamental
nature of these risks since the previous report and these principal risks and
uncertainties are equally applicable to the remaining six months of the
financial year as they were to the six months under review.
Going concern
The Directors are satisfied that the Company has adequate resources to continue
in operational existence for the foreseeable future and is financially sound.
For this reason they continue to adopt the going concern basis in preparing the
financial statements. The Company has a portfolio of investments which are
considered to be readily realisable and is able to meet all of its liabilities
from its assets and income generated from these assets.
Related party disclosure and transactions with the Investment Manager
The Investment Manager is regarded as a related party under the Listing Rules
and details of the management fees payable are set out in note 3 and note 9.
The related party transactions with the Directors are set out in note 10.
Directors' responsibility statement
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority
require the Directors to confirm their responsibilities in relation to the
preparation and publication of the Interim Management Report and Financial
Statements.
The Directors confirm to the best of their knowledge and belief that:
- the condensed set of financial statements contained within the half yearly
financial report has been prepared in accordance with the Accounting Standards
Board's Statement `Half Yearly Financial Reports'; and
- the interim management report, together with the Chairman's Statement and the
Investment Manager's Report, include a fair review of the information required
by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules.
The half yearly financial report has not been audited or reviewed by the
Company's auditor.
The half yearly financial report was approved by the Board on 23 August 2013
and the above responsibility statement was signed on its behalf by the
Chairman.
Peter Burnell
For and on behalf of the Board
23 August 2013
Investment Manager's Report
Performance Summary
For the six months ended 30 June 2013, the Company posted a 15.3% decrease in
its NAV while the share price fell by 15.8% and the MSCI EM Latin America Index
returned -14.7% (all figures in US dollar terms with income reinvested).
Market Overview
Latin American markets were strong in the first month of 2013 but have since
struggled as both internal and external factors weighed on the region. These
included weaker than expected GDP growth and earnings results in both Mexico
and Brazil, a negative outlook change for Brazil by Standard & Poor's and recent
protests in Brazil. Outside the region, concerns regarding growth in China and
quantitative easing in the United States negatively impacted Latin America as
investor risk aversion increased.
Six months to 30 June 2013 performance figures
Local
MSCI currency Local
country (vs.USD) indices
Regions/indices % change % change % change
Argentina 0.5 -8.7 -4.8 (Merval)
Brazil -19.5 -8.1 -28.4 (Ibovespa)
Chile -12.0 -5.7 -11.2 (IGPA)
Colombia -20.9 -8.1 -19.9 (IGBC)
Mexico -6.5 -0.6 -7.6 (IPC)
Peru -30.3 -8.3 -24.6 (IGBVL)
MSCI Latin America -16.1 CRB Index -3.3
MSCI Emerging Asia -7.8 Oil (WTI) 5.2
MSCI Emerging Markets -10.9 Gold -26.3
MSCI World 7.1 Copper -14.9
S&P 500 12.6 Corn -2.7
MSCI Europe 0.0 Soybeans 9.4
Sources: MSCI, Bloomberg, UBS and BlackRock (all figures in US dollar terms and
on a capital only basis).
MSCI EM Latin America Index country weighting at 30 June 2013
Weighting
Regions %
Brazil 55.8
Chile 9.5
Colombia 5.7
Mexico 26.7
Peru 2.3
Source: Factset.
Performance and Activity
Detracting from performance for the first half of 2013 was the gearing, our
higher than benchmark exposure to Brazil and a holding in Colombia via Pacific
Rubiales which is not part of the benchmark. We believe that the market in
Brazil has been over-penalised and we are looking for an opportunity to
increase the Company's gearing given the attractive valuation levels for many
companies in Brazil - we have not yet done so and the relatively small gearing
we had deployed during the period weighed on performance given falling markets.
Individual detractors during the period included Vale, América Móvil, Cemex,
Pacific Rubiales, Banco Itaú and Soquimich. Vale has suffered from regulatory
uncertainties and headline risk from China which, in our opinion, leaves a lack
of catalysts in the short term. América Móvil also detracted from performance
on regulatory uncertainty and telecommunications sector reforms. From a sector
perspective, below market exposure to and stock selection in,
telecommunications, stock selection in consumer staples, and a lower than
market weighting to information technology shares weighed on performance. We
are underweight telecommunications given the regulatory uncertainties in both
Mexico and Brazil.
Positive contributions to performance stemmed primarily from stock selection in
Mexico, an overweight position in Panama and stock selection in Peru. In
Mexico, individual contributors included toll road operator Pinfra, REIT Fibra
Uno and consumer conglomerate Femsa. Pinfra is a Mexican toll road operator
that offers the ability to participate in new infrastructure projects. Fibra
Uno, which is the largest REIT in Mexico, continues to deliver on their
business and acquisition strategy. Femsa is the Mexican consumer conglomerate
that continues to benefit from the growth from its retailing division Oxxo. In
Panama, Copa Holdings continues to deliver strong operational results in a
challenging sector on a consistent basis. From a sector perspective, stock
selection and overweight positions in industrials and consumer discretionary,
stock selection in energy and financials contributed positively to performance.
The Company's focus on sectors that are more domestically oriented, such as
industrials, consumer discretionary and financials worked well in the first
half of the year.
During the first half of the year we reduced exposure to Mexico given weaker
than expected earnings reported in the fourth quarter of 2012 and the first
quarter of 2013 as well as weaker than expected GDP growth. From a sector
perspective we reduced exposure to materials and telecommunications. Within
materials, we reduced exposure to Vale given the previously mentioned concerns
of regulatory uncertainties, headline risk from China and a lack of catalysts
in the short term. Within telecommunications, we reduced América Móvil,
which was also due to regulatory uncertainty and reforms that have negatively
impacted the sector in Mexico.
We have increased exposure to consumers, financials and industrials during the
first half of the year. Within these sectors we have added to selected banks,
infrastructure, malls/property, retailers and education names. We feel these
industries should recover more quickly once market pressures stabilise and we
have used recent market weakness associated with slower economic growth as well
as recent protests to rotate some of the portfolio's holdings to stocks in
these sectors.
During the period under review, and following authority from the Board, we
initiated a policy of writing a limited number of covered call options on a
proportion of the portfolio. We believe at the margin this activity can enhance
total returns to shareholders, particularly in flat or range-bound markets.
In the period under review, calls written on the portfolio generated revenue of
US$1,303,000, which provided helpful additional returns, which experienced
disappointing capital returns more generally. We analyse the income generated
on options which expire out of the money as well as reviewing the `opportunity
cost' of those which result in the delivery/sale of shares at prices below the
market price at expiry. Excluding those which have yet to expire, the overall
net return on this basis was US$531,000. The amount of the portfolio over which
call options are written is limited to 20% but in practice the maximum has
not exceeded 6%.
The Company's closed ended structure allows us to invest in smaller and less
liquid companies in the region, including those not in the benchmark, without
the need to consider the unexpected redemptions which can occur in an open
ended fund. At the period end, investments in small and mid-size companies with
less than US$10 billion in market capitalisation accounted for almost 35% of
equity investments, with more than half of these investments representing
non-benchmark stocks.
Outlook
Brazil remains the most attractive country from a valuation standpoint, with
strong management teams that have successfully delivered results under
different market conditions. The market continues to look for signs of economic
recovery as well as more clarity regarding government policies. In Mexico, we
remain positive on the prospects for fiscal and energy reform in the second
half of 2013. Ultimately, we would need to see an improvement in GDP and
individual stock results before we would look to increase our position in
Mexico given its relatively high valuation levels. Overall, we believe that the
recent volatility has created an attractive entry point to Latin American
equities and we are generally positive about Latin America for the remainder of
the year.
Will Landers
BlackRock Investment Management (UK) Limited
23 August 2013
Geographical and Sector Analysis
30 June 2013
Geographical Weighting vs MSCI EM Latin America Index
MSCI EM Latin
Company America Index
Brazil 64.7% 55.8%
Mexico 24.5% 26.7%
Chile 4.5% 9.5%
Colombia 3.6% 5.7%
Panama 1.4% 0.0%
Peru 1.3% 2.3%
------ ------
Total 100.0% 100.0%
------ ------
Sources: BlackRock and MSCI.
Sector and Geographical Allocation
MSCI EM Latin
Sector weighting America Index
Financials 32.5% 25.6%
Consumer 31.2% 24.7%
Industrials 11.3% 6.0%
Materials 8.7% 16.8%
Energy 7.6% 10.9%
Utilities 5.5% 5.9%
Telecommunications 3.2% 8.0%
Information Technology 0.0% 1.5%
Health Care 0.0% 0.6%
------ ------
Total 100.0% 100.0%
------ ------
Source: BlackRock.
Ten Largest Equity Investments
30 June 2013
Vale - 5.3% (2012: 10.8%) is the world's largest producer of iron ore with
operations in several other commodities, including nickel, copper and alumina,
among others. The company is the lowest cash cost producer of iron ore.
Itaú Unibanco - 5.0% (2012: 3.6%) is Brazil's largest private sector bank. The
bank continues to participate in the overall growth in the Brazilian financial
system as asset quality and loan growth improve and government pressure on
spreads has subsided.
Banco Bradesco - 4.6% (2012: 5.7%) is Brazil's second largest private sector
bank. Bradesco has one of the largest branch networks in the country, allowing
it to participate fully in Brazil's growing middle class and its overall
financial services needs.
Femsa - 4.3% (2012: 3.8%) a Mexican holding company controlling Coca-Cola's
largest independent bottler - Coca-Cola Femsa with operations throughout Latin
America; Mexico's fastest growing retailing chain - Oxxo with over 10,000
convenience stores throughout Mexico; and a 20% economic interest in global
brewer Heineken. In addition, they are looking to move away from being just a
consumer staples story.
CCR - 4.1% (2012: 3.2%) Brazil's leading toll road operator, the company has
invested in other concession projects such as subways and is the major
shareholder in Brazil's leading electronic payment company for tolls and
parking lots. CCR also participates in four airport concessions throughout
Latin America and is expected to be active in future project auctions.
BM&F Bovespa - 3.9% (2012: 2.0%) Brazil's Stock Exchange, is expected to
benefit from increased trading volumes.
Grupo Televisa - 3.5% (2012: 3.8%) is Mexico's leading television broadcasting
operator and a leading provider of satellite and cable television. Televisa
offers exposure to Mexico's growing broadband business as well as the overall
growth in the local and US Hispanic broadcast markets. Televisa is also a
significant shareholder and main content provider to Univisión, the leading
Spanish-language broadcaster in the US.
Brasil Foods - 3.3% (2012: 2.7%) is Brazil's largest food producer, with
leadership positions in poultry, pork, beef and processed meats. The company is
well positioned to benefit from its leadership in the domestic processed foods
market as well as in the export market for both in natura as well as processed
products.
América Móvil - 3.2% (2012: 5.6%) is Latin America's leading provider of
integrated telecommunications services, with a major presence in wireless
telephony throughout the region as well as in wireline in Mexico and Brazil.
AmBev - 2.5% (2012: 3.0%) is Brazil's leading beverage company with operations
throughout the Americas. The company is well positioned to continue to benefit
from its defensive position as the region's largest staples producer, while
maintaining a strong focus on operating cost discipline throughout its
operations, a perennial AmBev management strength.
All percentages reflect the value of the holding as a percentage of total
investments. Percentages in brackets represent the value of the holding at
31 December 2012. Together, the ten largest investments represent 39.7% of
total investments (ten largest investments as at 31 December 2012: 47.1%).
Investments
30 June 2013
Market %
value of
Country of operation US$'000 investments
Brazil
Vale 18,990 5.3
Itaú Unibanco 18,060 5.0
Banco Bradesco 16,575 4.6
CCR 14,695 4.1
BM&F Bovespa 14,144 3.9
Brasil Foods 11,885 3.3
Brazil (Fed Rep of) 6% 17/1/17 11,225 3.1
AmBev 9,146 2.5
Petrobras 9,034 2.5
BB Seguridade Participações 8,323 2.3
Ultrapar Participações 8,052 2.2
Cia Bras de Distribuicao 8,035 2.2
Cosan } 7,435 2.1
Cosan warrants* }
Lojas Renner } 6,199 1.7
Lojas Renner warrants* }
Petroleo Brasileiro 6,191 1.7
Natura Cosmetico } 5,171 1.5
Natura Cosmetico warrants* }
Kroton Educacional 5,060 1.4
Embraer 5,028 1.4
Klabin 4,472 1.2
BR Properties 4,441 1.2
BR Malls 4,362 1.2
Arezzo Industria e Comercio } 4,100 1.1
Arezzo Industria e Comercio warrants* }
Banco do Brasil 3,957 1.1
Energias do Brasil 3,319 0.9
TAESA 2,796 0.8
LPS Brasil 2,688 0.8
Minerva 1,906 0.5
Qualicorp 1,758 0.5
Iochpe-Maxion 1,745 0.5
Autometal 1,723 0.5
Qgep Participações 1,695 0.5
Cyrela Brazil 1,686 0.5
Even Construtora E Incorporadora 1,630 0.5
Localiza Rent a Car } 1,602 0.5
Localiza Rent a Car warrants* }
Iguatemi Empresa 1,560 0.4
T4F Entretenimento 1,358 0.4
Estacio Participações 1,215 0.3
Hypermarcas } 885 0.3
Hypermarcas warrants* }
Lupatech 830 0.2
AmBev call option 20/7/13 - -
Banco Bradesco call option 20/7/13 (2) -
Brasil Foods call option 5/8/13 (7) -
Itaú Unibanco call option 21/8/13 (31) -
Embraer call option 20/7/13 (32) -
AmBev call option 17/8/13 (98) -
------- -----
232,806 64.7
------- -----
Mexico
Femsa 15,595 4.3
Grupo Televisa 12,588 3.5
América Móvil 11,674 3.2
Fibra Uno 5,513 1.5
United Mexican States (includes fixed interest) 5,425 1.5
Grupo Financiero Banorte 5,420 1.5
Petroleos Mexicanos (includes fixed interest) 5,256 1.5
Alfa 5,012 1.4
Bolsa Mexicana de Valores 4,099 1.2
Cemex SAB 3,985 1.1
Wal-Mart de Mexico 3,553 1.0
Concentradora Fibra Hotelera 3,427 1.0
Promotora y Operadora Infraestructura 2,284 0.6
TF Administradora Industrial 2,239 0.6
Grupo Sanborns 1,931 0.6
Corp Inmobiliaria Vesta 1,529 0.4
Alpek 1,361 0.4
Infraestructura Energetica Nova 1,101 0.3
Femsa call option 20/7/13 (4) -
Grupo Televisa call option 20/7/13 (9) -
América Móvil call option 17/8/13 (57) -
------- -----
91,923 25.6
------- -----
Chile
S.A.C.I. Falabella 5,598 1.6
Empresa Nacional de Telecomunicacoes 4,578 1.3
Sociedad Quimica y Minera de Chile 2,984 0.8
Banco Santander-Chile 2,939 0.8
------- -----
16,099 4.5
------- -----
Colombia
Pacific Rubiales Energy 5,253 1.5
Grupo Nutresa 2,151 0.6
Cemex Latem 1,449 0.4
Pacific Rubiales Energy call option 20/7/13 (1) -
------- -----
8,852 2.5
------- -----
Panama
Copa Holdings 5,152 1.4
Copa Holdings call option 17/8/13 (7) -
------- -----
5,145 1.4
------- -----
Peru
Credicorp 2,939 0.8
Grana y Montero 1,890 0.5
------- -----
4,829 1.3
------- -----
Total investments 359,653 100.0
======= =====
* outperformance warrants held are linked to underlying listed securities which have
available quoted prices, however, the warrants are not listed in their own right. The
valuation of outperformance warrants has been derived from the quoted prices of
underlying securities.
All investments are in equity shares unless otherwise stated. The total number of
equity investments held at 30 June 2012 was 67 (31 December 2012: 69). The total number
of open options as at 30 June 2013 was 11. Outperformance warrants, together with the
underlying listed security, are considered as a single line of investment.
The negative valuations of US$248,000 in respect of options held represent the notional
cost of repurchasing the contracts at market prices as at 30 June 2013.
Income Statement
for the six months ended 30 June 2013
Revenue US'000 Capital US'000 Total US'000
Six months ended Year ended Six months ended Year ended Six months ended Year ended
30.06.13 30.06.12 31.12.12 30.06.13 30.06.12 31.12.12 30.06.13 30.06.12 31.12.12
Notes (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
(Losses)/
gains on
investments
held at
fair value
through
profit or
loss - - - (57,207) (8,460) 34,325 (57,207) (8,460) 34,325
Change in
the value
of
convertible
bonds held
at fair
value
through
profit or
loss - - - (3,200) 1,998 3,997 (3,200) 1,998 3,997
Gain on
repurchase
of
convertible
bond - - - - - 288 - - 288
Exchange
losses - - - (302) (104) (378) (302) (104) (378)
Income from
investments
held at
fair value
through
profit or
loss 2 6,384 8,588 14,725 - - - 6,384 8,588 14,725
Other
income 2 1,304 1 1 - - - 1,304 1 1
Investment
management
and
performance
fees 3 (406) (461) (908) (1,217) (1,384) (2,724) (1,623) (1,845) (3,632)
Other
operating
expenses 4 (397) (344) (804) (75) (23) (40) (472) (367) (844)
----- ----- ------ ------ ----- ----- ------ ----- -----
Net return/
(loss)
before
finance
costs and
taxation 6,885 7,784 13,014 (62,001) (7,973) 35,468 (55,116) (189) 48,482
Finance
costs (280) (350) (694) (842) (1,050) (2,080) (1,122) (1,400) (2,774)
----- ----- ------ ------ ----- ----- ------ ----- -----
Net return/
(loss) on
ordinary
activities
before
taxation 6,605 7,434 12,320 (62,843) (9,023) 33,388 (56,238) (1,589) 45,708
Taxation on
ordinary
activities (967) (830) (1,153) 464 225 183 (503) (605) (970)
----- ----- ------ ------ ----- ----- ------ ----- -----
Net return/
(loss) on
ordinary
activities
after
taxation 5,638 6,604 11,167 (62,379) (8,798) 33,571 (56,741) (2,194) 44,738
===== ===== ====== ====== ===== ====== ====== ===== ======
Return/
(loss) per
ordinary
share -
basic (US$
cents) 8 13.95 15.44 26.50 (154.31) (20.57) 79.65 (140.36) (5.13) 106.15
===== ===== ====== ====== ===== ====== ====== ===== ======
Return/
(loss) per
ordinary
share -
diluted
(US$ cents) 8 13.95 13.29 24.03 (154.31) (19.36) 80.43 (140.36) (6.07) 104.46
===== ===== ====== ====== ===== ====== ====== ===== ======
The total column of this statement represents the Income Statement of the Company. The supplementary revenue
and capital columns are both prepared under guidance published by the Association of Investment Companies
"AIC"). The Company had no recognised gains and losses other than those disclosed in the Income Statement.
All items in the above statement derive from continuing operations and no operations were acquired or
discontinued during the period. All income is attributable to the equity holders of BlackRock Latin
American Investment Trust plc.
Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 June 2013
Called
up Share Capital Non-
share premium redemption distributable Capital Revenue
capital account reserve reserve reserves reserve Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
for the six months ended
30 June 2013 (unaudited)
At 31 December 2012 4,384 11,641 4,602 4,356 353,772 20,958 399,713
(Loss)/return for the - - - - (62,379) 5,638 (56,741)
period
Cancellation of treasury
shares (227) - 227 - - - -
Shares purchased during
the period - - - - (19,206) - (19,206)
Dividends paid(1) - - - - - (10,358) (10,358)
----- ------ ----- ----- ------- ------ -------
At 30 June 2013 4,157 11,641 4,829 4,356 272,187 16,238 313,408
===== ====== ===== ===== ======= ====== =======
for the six months ended
30 June 2012 (unaudited)
At 31 December 2011 4,384 11,641 4,602 4,356 343,736 22,831 391,550
(Loss)/return for the
period - - - - (8,798) 6,604 (2,194)
Shares repurchased during
the period - - - - (22,362) - (22,362)
Dividends paid(2) - - - - - (10,960) (10,960)
----- ------ ----- ----- ------- ------ -------
At 30 June 2012 4,384 11,641 4,602 4,356 312,576 18,475 356,034
===== ====== ===== ===== ======= ====== =======
for the year ended
31 December 2012 (audited)
At 31 December 2011 4,384 11,641 4,602 4,356 343,736 22,831 391,550
Return for the year - - - - 33,571 11,167 44,738
Shares repurchased during
the year - - - - (23,535) - (23,535)
Dividends paid(3) - - - - - (13,040) (13,040)
----- ------ ----- ----- ------- ------ -------
At 31 December 2012 4,384 11,641 4,602 4,356 353,772 20,958 399,713
===== ====== ===== ===== ======= ====== =======
1. Second interim dividend in respect of the year ended 31 December 2012 of 25.00 cents per share declared on
27 February 2013 and paid on 26 April 2013.
2. Second interim dividend in respect of the year ended 31 December 2011 of 25.00 cents per share declared on
7 March 2012 and paid on 20 April 2012.
3. Second interim dividend paid in respect of the year ended 31 December 2011 of 25.00 cents per share declared
on 7 March 2012 and paid on 20 April 2012 and the first interim dividend for the year ended 31 December 2012 of
5.00 cents per share declared on 14 August 2012 and paid on 27 September 2012.
During the period the Company incurred purchase transaction costs of US$183,000 (six months ended 30 June 2012:
US$183,000; year ended 31 December 2012: US$339,000) and sales transaction costs of US$291,000 (six months
ended 30 June 2012: US$263,000; year ended 31 December 2012: US$426,000). All transaction costs have been
included within the capital column of the Income Statement.
Balance Sheet
as at 30 June 2013
30 June 30 June 31 December
2013 2012 2012
US$'000 US$'000 US$'000
Notes (unaudited) (unaudited) (audited)
Fixed assets
Investments held at fair value
through profit or loss
359,651 418,199 458,594
------- ------- -------
Current assets
Debtors 5,238 8,539 3,045
Cash at bank and in hand 23,059 16,721 5,829
------- ------- -------
28,297 25,260 8,874
Creditors - amounts falling due
within one year
Bank overdraft - - (126)
Other creditors (7,316) (5,454) (3,605)
------- ------- -------
Net current assets 20,981 19,806 5,143
------- ------- -------
Total assets less current
liabilities 380,632 438,005 463,737
Creditors - amounts falling due
after more than one year
Convertible bonds held at fair
value through profit or loss 6 (67,200) (81,947) (64,000)
Non equity redeemable shares 6 (24) (24) (24)
------- ------- -------
(67,224) (81,971) (64,024)
------- ------- -------
Net assets 313,408 356,034 399,713
======= ======= =======
Capital and reserves
Called up share capital 7 4,157 4,384 4,384
Share premium account 11,641 11,641 11,641
Capital redemption reserve 4,829 4,602 4,602
Non distributable reserve 4,356 4,356 4,356
Capital reserves 272,187 312,576 353,772
Revenue reserve 16,238 18,475 20,958
------- ------- -------
Total equity shareholders' funds 313,408 356,034 399,713
======= ======= =======
Net asset value per ordinary
share (US$ cents) - debt at fair
value (see note 6) 8 796.23 856.38 964.72
======= ======= =======
Cash Flow Statement
for the six months ended 30 June 2013
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
US$'000 US$'000 US$'000
(unaudited) (unaudited) (audited)
Net cash inflow from operating activities 6,338 8,264 11,776
Servicing of finance
Finance costs (1,122) (1,400) (2,942)
Taxation paid (500) (619) (987)
------- ------- -------
Capital expenditure and financial
investment
Purchase of investments (121,638) (133,282) (240,065)
Proceeds from sale of investments 164,180 156,894 270,378
Capital expenses (95) (22) (45)
------- ------- -------
Net cash inflow from capital expenditure
and financial investment 42,447 23,590 30,268
------- ------- -------
Equity dividends paid (10,358) (10,960) (13,040)
------- ------- -------
Net cash inflow before financing 36,805 18,875 25,075
------- ------- -------
Financing
Issue expenses paid - - (15,660)
Shares repurchased held in treasury (19,147) (22,235) (23,519)
------- ------- -------
Net cash outflow from financing (19,147) (22,235) (39,179)
------- ------- -------
Increase/(decrease) in cash in the period 17,658 (3,360) (14,104)
======= ======= =======
Reconciliation of Net Return before Finance Costs and Taxation to Net Cash Flow
from Operating Activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
US$'000 US$'000 US$'000
(unaudited) (unaudited) (audited)
Net (loss)/profit before finance costs
and taxation (55,116) (189) 48,482
Losses/(gains) on investments held at
fair value through profit or loss 57,207 8,460 (34,325)
Fair value adjustment for the convertible
bonds 3,200 (1,998) (3,997)
Gain on repurchase of the convertible
bond - - (288)
Exchange losses of a capital nature 302 104 378
Non-operating expenses of a capital
nature 75 23 40
Decrease in accrued income 669 773 763
Decrease in other debtors - - 9
Increase in creditors 1 1,091 714
----- ----- ------
Net cash inflow from operating activities 6,338 8,264 11,776
===== ===== ======
Notes to the Financial Statements
for the six months ended 30 June 2013
1. Principal activity and basis of preparation
The Company conducts its business so as to qualify as an investment trust
company within the meaning of sub-sections 1158-1165 of the Corporation Tax Act
2010. The half yearly financial statements have been prepared on the same basis
as the accounting policies set out in the Company's financial statements as at
31 December 2012, unless otherwise stated.
Under FRS26 "Financial instruments: Measurements" the Company has designated
its assets and liabilities as being measured as "fair value through profit or
loss". The fair value of fixed asset investments is deemed to be the bid market
value at the close of business on the balance sheet date. The taxation charge
has been calculated by applying an estimate of the annual effective tax rate to
any profit for the period.
The Company's financial statements have been prepared using the accounting
policies set out in the Company's annual report and financial statements for
the year ended 31 December 2012, except in respect of the accounting policy
for the options strategy which is set out below, and in accordance with UK
Generally Accepted Accounting Practice ("UK GAAP") and with the Statement of
Recommended Practice "Financial Statements of Investment Companies" ("SORP")
revised in January 2009.
During the year, the Company commenced writing a covered call options strategy.
Options may be written over securities held in the portfolio for generating or
protecting capital returns, or for generating or maintaining revenue returns.
Where the purpose of the option is the generation of income, the premium is
treated as a revenue item. Where the purpose of the option is the maintenance
of capital, the premium is treated as a capital item. The value of the option
is subsequently marked to market to reflect the fair value of the option based
on traded prices.
Option premium income is recognised as revenue evenly over the life of the option
contract and included in the revenue column of the Income Statement unless the
option has been written for the maintenance and enhancement of the Company's
investment portfolio and represents an incidental part of a larger capital
transaction, in which case any premiums arising are allocated to the capital
column of the Income Statement. Where the premium is taken to revenue, an
appropriate amount is shown as capital such that the total return reflects
the overall change in the fair value of the option. When an option is closed
out or exercised the gain or loss is accounted for as capital.
2. Income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
US$'000 US$'000 US$'000
(unaudited) (unaudited) (audited)
Income from investments:
Overseas dividends 6,069 8,272 14,097
Interest income 315 316 628
----- ----- ------
6,384 8,588 14,725
Interest receivable and other income:
Option premiums 1,303 - -
Deposit interest 1 1 1
----- ----- ------
Total 7,688 8,589 14,726
===== ===== ======
The Company considers the treatment of premiums arising from option transactions
on a case-by-case basis. During the period ended 30 June 2013, the option premium
income of US$1,303,000 received by the Company was from options written for income
purposes and has therefore been credited to the revenue column of the Income Statement.
3. Investment management and performance fees
The investment management fee has been calculated at 0.85% per annum on the NAV
plus 0.34% on the US$64,000,000 convertible bonds. The Investment Manager is
also entitled to a performance fee equal to 10% of any outperformance of the
NAV per share against the benchmark, the MSCI EM Latin America Index (in US dollar
terms on a total return basis) plus a hurdle of 1%. The performance fee is capped
at 1% of NAV.
No performance fee was payable in respect of the six months ended 30 June 2013,
six months ended 30 June 2012 or the year ended 31 December 2012.
4. Operating expenses
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
US$'000 US$'000 US$'000
(unaudited)(unaudited) (audited)
Custody fee 63 65 119
Directors' emoluments 130 140 293
Other administration costs 204 139 392
--- --- ---
397 344 804
=== === ===
5. Dividends
The Board has declared a first interim dividend of 15.00 cents (2012: 5.00 cents)
payable on 4 October 2013 to shareholders on the register as at 6 September
2013. The total cost of this dividend, based on 39,361,585 ordinary shares in
issue at 23 August 2013 is US$5,904,000 (30 June 2012: 41,574,247 shares and total
cost of US$2,079,000).
6. Creditors - amounts falling due after more than one year
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
US$'000 US$'000 US$'000
(unaudited) (unaudited) (audited)
Convertible bonds at par 64,000 79,948 64,000
Fair value adjustment in respect of the
convertible bonds 3,200 1,999 -
------ ------ ------
67,200 81,947 64,000
------ ------ ------
Non equity redeemable shares 24 24 24
------ ------ ------
67,224 81,971 64,024
====== ====== ======
Convertible bonds
On 15 September 2009, the Company issued US$80 million worth of 3.5% unsecured
convertible bonds ("bonds") redeemable at par on 15 September 2015. The bonds
have been accounted for in accordance with FRS 26 - 'Financial Instruments:
Recognition and Measurement', and held at fair value on the Company's Balance
Sheet. On initial recognition, fair value was deemed to be the issue proceeds
received of US$80 million, and issue costs of US$1.1 million which had been
debited to the Income Statement and allocated 25% to the revenue column and 75%
to the capital column in line with the Board's policy on allocation of finance
costs. On 11 May 2010 the convertible bond denomination was changed from
US$100,000 to US$1,000 per bond.Subsequent to initial recognition, the bonds
have been fair valued by reference to their offer prices subject to a minimum
floor price. Movements arising from an increase or decrease in this price are
credited or debited to the capital column of the Income Statement. In the event
that the fair value of the bonds falls below the nominal value of the bonds, the
fair value adjustment will not decrease the bond valuation below this nominal
value. This is due to the requirement that if the bonds have not been converted
into ordinary shares before the tenth business day (inclusive) prior to
15 September 2015, they will be redeemed at their nominal value. Any valuation
differences between the carrying value of the debt and the nominal value at this
time will be debited or credited to the capital column of the Income Statement.
Interest costs arising on the bonds are allocated 25% to the revenue column and
75% to the capital column of the Income Statement in line with the Board's
policy on finance costs.
The bonds in issue at the date of this report may be converted at US$9.83 per
share at any time but on or before the tenth business day (inclusive) prior to
15 September 2015. The value of any bonds converted will be debited to long term
liabilities. The nominal value of ordinary shares issued on the conversion of
bonds will be credited to share capital and the balance representing the excess
of conversion proceeds over the nominal value of the ordinary shares will be
credited to the share premium account.
The 3.5% convertible bonds were issued on 15 September 2009 and all bonds which
have not been previously redeemed, purchased or converted will be redeemed at
par on 15 September 2015. The fair value of the bond is based on the price
quoted on the exchange on which the bond is traded. Interest is paid half
yearly at a rate of 3.5% per annum on 15 March and 15 September.
The convertible bonds do not carry any voting rights or the right to receive
dividends.
Non equity redeemable shares
The redeemable shares of £1 each carry the right to receive a fixed dividend at
the rate of 0.1% per annum on the nominal amount thereof. They are capable of
being redeemed by the Company at any time and confer no rights to receive
notice of, attend or vote at general meetings except where the rights of
holders are to be varied or abrogated. On a winding up, the capital paid up on
such shares ranks pari passu with, and in proportion to, any amounts of capital
paid to the holders of ordinary shares, but does not confer any further right
to participate in the surplus assets of the Company.
7. Called up share capital
Ordinary Treasury Nominal
shares shares Total value
number number shares US$'000
Allotted, called up and fully
paid share capital comprised:
Ordinary shares of 10 cents
each
At 1 January 2013 41,433,247 2,408,065 43,841,312 4,384
Shares repurchased held in
treasury in respect of shares
tendered on 2 April 2013,
being the next business day
following 31 March 2013 (2,071,662) 2,071,662 - -
Shares transferred from
treasury and cancelled - (2,267,065) (2,267,065) (227)
---------- --------- ---------- -----
At 30 June 2013 39,361,585 2,212,662 41,574,247 4,157
========== ========= ========== =====
During the period 2,071,662 ordinary shares were repurchased via the tender
offer and held in treasury for a total consideration of US$19,206,000. All
2,071,662 shares tendered were transferred to treasury. In addition, 2,267,065
shares previously held in treasury were cancelled.
At 30 June 2013, the Company had 41,574,247 shares in issue of which 2,212,662
were held in treasury.
8. Returns and net asset value per ordinary share
30 June 30 June 31 December
2013 2012 2012
(unaudited) (unaudited) (audited)
Net revenue return attributable to
ordinary shareholders (US$'000) 5,638 6,604 11,167
------- ------- -------
Net capital (loss)/return attributable to
ordinary shareholders (US$'000) (62,379) (8,798) 33,571
------- ------- -------
Total (loss)/return attributable to
ordinary shareholders (US$'000) (56,741) (2,194) 44,738
------- ------- -------
Equity shareholders' funds (US$'000) 313,408 356,034 399,713
------- ------- -------
The weighted average number of ordinary
shares in issue during the period on
which the return per ordinary share was
calculated was: 40,426,030 42,768,731 42,145,043
The weighted average number of ordinary
shares in issue during the period on
which the diluted return per ordinary
share was calculated was: 40,426,030 51,671,626 48,655,724
---------- ---------- ----------
The actual number of ordinary shares in
issue at the end of each period on which
the undiluted net asset value was
calculated was: 39,361,585 41,574,247 41,433,247
---------- ---------- ----------
The number of ordinary shares in issue at
the end of each period on which the
diluted net asset value was calculated
was: 39,361,585 41,574,247 41,433,247
---------- ---------- ----------
Undiluted return per share
Revenue return per share 13.95 15.44 26.50
Capital (loss)/return per share (154.31) (20.57) 79.65
------ ------ ------
Total (loss)/return per share (140.36) (5.13) 106.15
------ ------ ------
Net asset value per share - debt at fair
value 796.23 856.38 964.72
Ordinary share price (mid-market)* 705.27 784.23 861.52
------ ------ ------
Diluted return per share**
Revenue return per share 13.95 13.29 24.03
Capital (loss)/return per share (154.31) (19.36) 80.43
------ ------ ------
Total (loss)/return per share (140.36) (6.07) 104.46
====== ====== ======
* The Company's share price is quoted in sterling and the above represents the US
dollar equivalent.
** For the period ended 30 June 2013 there was no dilution. Where dilution occurs,
the net returns are adjusted for items relating to the convertible bonds. Total
earnings for the period are tested for dilution. Once dilution has been determined
individual revenue and capital earnings are adjusted. Bond finance costs for the
period, net of tax, are reversed together with the fair value adjustment on the
convertible bonds.
Net asset value per share - debt converted
In accordance with the Company's understanding of the current methodology
adopted by the AIC, convertible bond instruments are deemed to be in 'the
money' if the cum income (debt at fair value) net asset value ("NAV") exceeds
the conversion price of US$9.83 per share (30 June 2012: US$8.98 per share;
31 December 2012: US$9.83 per share). In such circumstances a net asset value is
produced and disclosed assuming the convertible debt is fully converted. At
30 June 2013 the NAV (debt at fair value) was US$7.96 per share and thus the
convertible bonds are not in 'the money'. There is therefore no dilutive effect
on the NAV per share. However, for information purposes the table below sets
out the NAV per share with debt fully converted at the conversion price of
US$9.83 per share (30 June 2012: US$8.98 per share; 31 December 2012: US$9.83
per share). This information is presented to provide useful additional relevant
information for readers of the financial statements.
30 June 30 June 31 December
2013 2012 2012
Net asset value per share - debt US$'000 US$'000 US$'000
converted (unaudited) (unaudited) (audited)
Net assets with convertible bonds at fair 313,408 356,034 399,713
value per balance sheet
Add back convertible bonds at fair value 67,200 81,947 64,000
Accrued interest on convertible bonds at 672 840 672
balance sheet date
---------- -------- --------
Adjusted net assets following conversion
of the convertible bonds (a) 381,280 438,821 464,385
---------- ---------- --------
Number of ordinary shares for NAV 39,361,585 41,574,247 41,433,247
Number of ordinary shares arising on
conversion of convertible bonds
(US$64,000,000 @ US$9.83) (30 June 2012:
US$79,948,000 @ US$8.98 and 31 December
2012: US$64,000,000 @ US$9.83) 6,510,681 8,902,895 6,510,681
---------- ---------- ----------
Number of ordinary shares following
conversion of convertible bonds (b) 45,872,266 50,477,142 47,943,928
---------- ---------- ----------
Net asset value per share - debt
converted (cents) (a/b) 831.18 869.35 968.60
========== ========== =========
9. Transaction with the Investment Manager
BlackRock Investment Management (UK) Limited ("BlackRock") provides management
and administration services to the Company under a contract which is terminable
on six months' notice. Details of the fees receivable by BlackRock in relation
to these services are set out in note 4.
The investment management fee for the six months ended 30 June 2013 amounted to
US$1,623,000 (six months ended 30 June 2012: US$1,845,000; year ended
31 December 2012: US$3,632,000). No performance fee was payable for the six months
ended 30 June 2013, six months ended 30 June 2012 or the year ended 31 December
2012.
At the period end, an amount of US$1,623,000 was outstanding in respect of
these fees (six months ended 30 June 2012: US$1,845,000; year ended 31 December
2012: US$1,787,000).
10. Related party disclosure
The Board consists of six non-executive Directors, all of whom are considered
to be independent by the Board. None of the Directors has a service contract
with the Company. With effect from 1 January 2013, the Chairman receives an
annual fee of £42,000 (US$63,701), the Chairman of the Audit Committee/Senior
Independent Director receives an annual fee of £32,000 (US$48,534) and each of
the other Directors receives an annual fee of £28,000 (US$42,468).
At the period end members of the Board held ordinary shares and convertible
bonds in the Company as set out below:
Ordinary Convertible
shares bonds
Peter Burnell (Chairman) 3,000 100
Mahrukh Doctor 604 -
Antonio Monteiro de Castro 47,000 100
Desmond O'Conor 12,461 -
Earl St Aldwyn 1,470 100
Laurence Whitehead 12,967 100
11. Contingent liabilities
There were no contingent liabilities at 30 June 2013, 30 June 2012 or
31 December 2012.
12. Publication of non statutory accounts
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the six months ended 30 June 2013 and
30 June 2012 has not been audited or reviewed.
The information for the year ended 31 December 2012 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies, unless otherwise stated. The report of the auditor on
those accounts contained no qualification or statement under sections 498(2) or
(3) of the Companies Act 2006.
13. Annual results
The Board expects to announce the annual results for the year ending
31 December 2013 as prepared under UK GAAP in mid February 2014. Copies of the
results announcement can be obtained from the Secretary on 020 7743 3000. The
annual report should be available by the beginning of March 2014, with the
Annual General Meeting being held in April 2014.
For further information, please contact:
Jonathan Ruck Keene, Chairman, Specialist Client Group, BlackRock
Investment Management (UK) Limited
Tel: 020 7743 2178
Peter Burnell - Chairman
Tel: 01434 632292
Emma Phillips, Media & Communication, BlackRock Investment Management (UK)
Limited
Tel: 020 7743 2922
Henrietta Guthrie, Lansons Communications
Tel: 020 7294 3612
23 August 2013
12 Throgmorton Avenue
London EC2N 2DL
END
The Half Yearly Financial Report will also be available on the BlackRock
Investment Management website at http://www.blackrock.co.uk/content/groups/
uksite/documents/literature/blackrock-latin-american-investment-trust-plc-
interim-report-2013.pdf. Neither the contents of the Manager's website nor
the contents of any website accessible from hyperlinks on the Manager's website
(or any other website) is incorporated into, or forms part of, this announcement.
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