Final Results

RNS Number : 0827J

Ocean Wilsons Holdings Ld

24 March 2010

 



OCEAN WILSONS HOLDINGS LIMITED

Preliminary announcement

CHAIRMAN'S STATEMENT

Overview

Ocean Wilsons Holdings Limited ("Ocean Wilsons or the Company") is a Bermuda based investment Company and through its subsidiary operates as a maritime services company in Brazil. The Company is listed on both the Bermuda Stock exchange and the London Stock Exchange. It has two principal subsidiaries: Wilson Sons Limited and Ocean Wilsons Investments Limited.

Wilson Sons Limited ("Wilson Sons") is an autonomous Bermuda company listed on the Sao Paulo Stock Exchange (BOVESPA) and Luxembourg Stock Exchange. Ocean Wilsons holds a 58.25% interest in Wilson Sons, which is fully consolidated in its accounts with a 41.75% minority interest. Wilson Sons is one of the largest providers of maritime services in Brazil. Wilson Sons  activities include harbour and ocean towage, container terminal operation, offshore support services, logistics, small vessel construction and ship agency.  Wilson Sons has over four thousand employees and operates in nearly thirty locations throughout Brazil in 2009.  

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

Introduction

In a challenging year with difficult market conditions I am pleased to report that 2009 produced another excellent performance. Wilson Sons continued to report solid operating results with strong performances from the towage, port terminal and offshore businesses. Following a difficult 2008 the recovery in global investment markets and appreciation of the Real against the US Dollar generated significant gains during the year that positively impacted bottom line earnings.

Results 

Revenue for the full year was 4% lower at US$477.9 million (2008: US$498.3 million) principally due to a fall in shipyard and logistics revenue.  Volumes at our Brazilian business recovered in the second half as Brazilian trade volumes benefitted from the improvement in the economic environment. Operating profit for the year at US$79.3 million was US$19 million lower than 2008, (US$98.3 million) mainly due to an increase in the long-term incentive plan accrual in the period and a decrease in the non-recurring fiscal credits recognised in the period. The increase in the long-term incentive plan accrual was driven by the improvement in the Wilson Sons share price.

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Profit before tax increased by US$108.3 million from US$31.6 million to US$139.8 million due to the gains on the investment portfolio of US$34.3 million (2008 US$59.5 million loss) and exchange gains on the Real denominated cash balances of US$23.7 million.(2008 US$23.6 million loss),

Earnings per share based on ordinary activities after taxation and minority interests were 198.5 cents (2008: 75.5 cents loss).

Investment Portfolio

Investment managers

The Group's investment portfolio is held by Ocean Wilson Investments Limited ("OWIL") a wholly owned subsidiary registered in Bermuda. OWIL appointed Hanseatic Asset Management LBG a Guernsey registered and regulated investment group as its Investment Manager in November 2000.

Investment strategy

The Board of OWIL determines investment guidelines and restrictions in conjunction with the investment manager, these together with the investment managers reports are reviewed at the OWIL board meetings.

The investment strategy agreed with the Company's investment managers is to maximise the total return on assets, by investing in a portfolio of diversified assets including global equities, fixed income and alternative assets with a particular emphasis on emerging markets. Investments are intended to add value over the medium to longer-term through a non-market correlated, conviction based investment style.

Investment portfolio performance

The partial recovery in global equity markets resulted in the value of the trading investment portfolio and cash under management increasing 15.4%, from US$212.4 million to $245.2million. The biggest contributors to the portfolio performance were Global, U.S. and Far East investments.

During the year the investment managers deployed US$51million of the portfolio's cash and liquidity funds in new investments and capital draw downs. At year end the investment portfolio held US$67 million in cash and liquidity funds. Details of the individual investment holdings at 31 December 2009, new investments made during the period and performance, are contained within the Investment Managers report.

Over the nine years that Hanseatic Asset Management has managed the portfolio it has increased in value by 94.7% compared with 6.7% for the MSCI world index and a 48.9% return from the performance benchmark in the same period

Wilson Sons Limited

At the close of business on the 22March 2010, the Wilson Sons share price was Real 21.80 resulting in a market value for the Ocean Wilsons Holding of 41,444,000 shares (58.25% of Wilson Sons) of approximately US$502.0 million which is the equivalent of US$14.19 per Ocean Wilsons Holdings Limited share.

Brazil

The impact of the global financial crisis on Brazil was less severe than seen in the developed economies, although the Brazilian economy contracted 0.2% in 2009. This was the first time since 1992 that Brazil recorded an economic contraction over an annual period. To stimulate demand the government announced tax breaks in the second half of the year and interest rates fell to single digits. Despite the fall in interest rates the Real appreciated 30% against the US Dollar from March to October and the government introduced a 2% levy on foreign purchases of bonds and equities to slow inflows of "hot money".

Brazil's banking sector appears to have come through the global crisis in good shape and the Brazilian stock market "BOVESPA" index by yearend had recovered most of the losses suffered in 2008, as investor appetite for risk and emerging markets returned.

2010 is a Presidential election year in Brazil and the extension of some tax breaks signals that fiscal policy may remain loose in the run-up to the elections. To contain inflationary pressures monetary policy will probably have to tighten sooner rather than later. This may put further upward pressure on the Real and reduce investment.  Government debt at 60% of GDP is high but manageable,

The economy is expected to grow by over 5% in 2011 although the performance of the economy may depend on the global recovery and international commodity prices.

Dividend

The Board is not recommending a final dividend for 2009 as the Board declared a second interim dividend of 38 cents per share to be paid on the 26 March 2010. The total dividend for the year of 42 cents per share (2008: 30 cents per share) represents a 40% increase over 2008.

The Board's policy in respect of each financial year is to pay the Company's full dividend to be received from Wilson Sons in the period plus a percentage of the average capital employed in the investment portfolio to be determined annually by the Board.

Dividends are set in US Dollars and paid twice yearly. Shareholders will continue to receive dividends in Sterling by reference to the exchange rate applicable to the US Dollar on the dividend record date, except for those shareholders that elect to receive dividends in US Dollars.

The Board of Directors may review and amend the dividend policy from time to time in light of our future plans and other factors. The payment of dividends cannot be guaranteed and may be discontinued or varied at the discretion of the Board.

Depository receipts

As previously informed in my letter of the 6 July 2009 and the 2009 interim report the Company's shares are now capable of being traded through CREST, pursuant to a depository interest arrangement established by the Company.

Shares in companies not incorporated in the United Kingdom are not capable of being directly traded or held in CREST (the electronic trade confirmation system for the United Kingdom).  Therefore, the Company has come to an arrangement with Capita IRG Trustees Limited to provide a way for shareholders to hold and or trade their shares in the Company indirectly, pursuant to a depository interest arrangement

The Company  arranged in July 2009 for Capita IRG Trustees Limited (the "Issuer") to issue depository interests on a one for one basis in respect of the underlying ordinary shares (the "Depository Interests").  It is these Depository Interests, which may be held and transferred within CREST.  The Depository Interests are created and issued pursuant to a Deed Poll executed by the Issuer under English law, copies of which are available from the Issuer. The Depository Interests will carry the same ISIN number (BMG6699D1074) as the Company's ordinary shares. To date 369 shareholders representing 89% of the Ocean Wilsons Holdings Limited share capital have converted to depository interests.

Shareholders who opt to deposit their shares with the Issuer in return for Depository Interests will retain their beneficial interest in the underlying ordinary shares with no change to the rights to dividends and voting.

If you have any questions in relation to the Depositary Interests please contact Capita Registrars, at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU - telephone no. 0871 664 0300 (Calls cost 10 pence per minute plus network extras.) or from outside the UK  [phone].

Long term incentive plan

Ocean Wilsons Holdings Limited "OWHL" implemented a cash settled phantom option scheme that was approved by shareholders at the Special General Meeting held on 19 April 2007. The scheme is for selected senior management and the options provide for the option holder to receive on exercise the difference between the option price and the market value of Wilson Sons per OWHL share at the time of exercise.                                                  

During 2009 participants exercised 280,280 options and forfeited a further 620,273 units in the plan in return for a guaranteed deferred bonus scheme of US$8.9 million            .The maximum remaining liability under the plan is US$12.3 million based on the Wilson Sons IPO offer price. An accrual of US$ 7,035,000 (2008 US$3,296,000) has been included in the 2009 accounts for benefits accruing under the plan. 

Charitable donations

In line with our policy to support local causes the Group made contributions of US$102,000 (2008: US$74,000) during the year. The emphasis of the Group's actions continues to be community based projects providing help to children and adolescents. The Group's principal contributions in 2009 were:

Task Brasil - Casa Jimmy project to improve the lives and supports the needs of children and pregnant teenage girls living on the streets of Brazil. The institution is located in Santa Teresa, Rio de Janeiro.

Website: www.taskbrasil.org.uk

Escola de Gente - raising awareness and promoting social inclusion for all parts of the community. Located in Barra da Tijuca, Rio de Janeiro.

Website:www.escoladegente.org.br

Amigos do Zippy (Zippy's Friends) - is a programme to help children and young people develop skills which will enhance their present and future emotional wellbeing.

Website www.amigosdozippy.org.br

Through our corporate programme 'Criando Lacos" (Creating ties), the Group provides financial support and promotes employee involvement in social initiatives. During 2009 Criando Lacos organised various campaigns throughout Brazil involving over 400 volunteers.

Board of Directors

We are pleased to announce the appointment of Mr Andrés Rozental as a non-executive Director to the Board of Ocean Wilsons Holdings Limited with effect from 23 March 2010. Mr Andrés Rozental is the founding partner of Rozental & Asociados, an international consulting firm specialized in providing political and economic advisory services to both Mexican and foreign companies. Mr Rozental previously was a career diplomat for more than 35 years, with the Mexican foreign ministry holding a number of senior ambassadorial diplomatic posts. He is currently Chairman of ArcelorMittal Mexico and a Director of their Brazilian company as well. He served on the main Board of Mittal Steel for 10 years before the merger with Arcelor. He is also a Director of New India Investment Trust and of Dufry South America (formerly Brasif). In Mexico he is an Operating Partner of Advent International Private Equity and Chairman of Grupo Industrial Omega, a diversified holding company in the retail and real estate sectors

 

Outlook

The Group delivered another excellent result in 2009 and we fully expect 2010 to be another solid year. The Brazilian economy remains relatively strong with forecasts predicting over 5% growth in 2010 and the fast expanding Brazilian offshore oil industry continues to offer opportunities for the Group through our offshore vessel business and Brasco which provides support services to the oil and gas industry.

In 2010 we intend to start expansion of our shipyard operation at Guaruja to service the increasing internal and external demand for offshore support vessels. During the year we expect to deliver a further two Platform Supply Vessels (PSVs) for our fleet and four new tugboats as part of our ongoing tug renewal programme. Completion of the offshore joint venture with Ultratug announced in October 2009 is still awaiting final regulatory approval but we anticipate that this process will be concluded in the first half of 2010.

Management and staff

Finally on behalf of your Board, I would like to thank our management and staff for their continuous efforts in helping to build and develop the Company.

J. F. Gouvêa Vieira

Chairman

23 March 2010

FINANCIAL REVIEW

 

Profit before tax and earnings per share

Profit before tax for the year was US$139.8 million compared with US$31.6 million for 2008. The increase of US$108.2 million is principally due to increased investment revenue of US$35.6 million (2008: US$6.8 Million) and other gains on the investment portfolio of US$34.3million (2008: US$59.5 million loss). Basic earnings per share for the year were 198.5 cents, compared with 75.5 cents losses per share in 2008.

Revenue

Group revenue for the year fell 4% to US$477.9 million (2008: US$498.3 million) principally due to a decrease in our shipbuilding business, logistics revenue and weaker business volumes in the first half of 2009. Revenue in the second half 2008 at US$258.9 million was 4% higher than the comparative period in 2008, US$249.8 million. All Group revenue is derived from Wilson Sons operations in Brazil.

Operating profit

Operating profit for the year decreased by US$19.0 million to US$79.3 million (2008: US$98.3 million). The fall in operating profit resulted mainly from an increase in the share based payment expense and a decrease in the non-recurring fiscal credits recognised in the period.

The share based payment expense for the year at US$17.2 million was, US$25.3 million higher than prior year (2008: US$8.1 million credit). As both the Ocean Wilsons and Wilson Sons long term incentive schemes are cash settled phantom option schemes, International Accounting Standards require that the fair value is determined at each accounting date. The increase in the Wilson Sons Limited share price from Real 10.95 per share at 31 December 2008 to Real 21.48 at 31 December 2009 is reflected in a similar increase in the fair value of the two incentive schemes at the reporting date and associated charge to income. In 2008 a fall in the Wilson Sons Limited share price, generated a significant credit to the income statement in the period.

Excluding the share based payment expense, operating margins for the year improved to 20.2% (2008 18.1%) as a result of better sales mix, an increase in high margin special towage operations and the number of offshore vessels operating in the premium priced spot market.

Non-recurring fiscal credits relating to prior periods recognised in the year were US$15.9 million lower at US$6.5million (2008 US$22.4million). The Group does not expect to recognise further fiscal credits relating to prior periods in future reporting periods.

Raw materials declined from US$86.5 million to US$49.6 million due principally to the decrease in shipyard sales.

Exchange rates

Because the Group has revenue,costs, assets and liabilities in both Brazilian Real and US Dollars, movements in the US Dollar / Brazilian Real exchange rate can impact the Group both positively and negatively from year to year. In 2009 the Brazilian Real appreciated 25% against the US Dollar from R$2.33 at 1 January 2009 to R$1.74 at the year end. The main impacts from the appreciation of the Brazilian Real against the US Dollar was a net exchange gain of US$24.0 million (2007: US$23.6 million loss) on the Group's Real-denominated cash balances included in the income statement and a currency translation adjustment gain to net equity of US$16.1 million (2008 US$16.1 million charge). The average Real/US Dollar exchange rate for the year at 2.00 was 9% higher than the comparative period in 2008, 1.83. The higher average exchange rate had a beneficial effect on our Real denominated costs when converted into US Dollars.

Investment revenues

Investment revenue for the year increased US$28.8 million to US$35.6 million from US$6.8 million in 2008, primarily due to exchange gains on cash and cash equivalents of US$ 23.7 million (2008: US$23.6 million loss) Exchange gains arose principally on Brazilian Real denominated cash balances. Interest from bank deposits decreased US$13.2 million to US$10.4 million (2008: US$23.6 million) reflecting the lower market interest rates.

Other gains and losses

Other gains of US$34.3 million (2008 US$ 59.5 million loss) arise from the Group's portfolio of trading investments. The improvement over 2008 reflects the partial recovery in World Equity markets during the year and corresponding increase in the fair value of trading investments held at year end.

Finance costs

Finance costs in the period fell by US$4.5 million from US$14.1 million to US$9.6 million benefitting from the unrealised exchange gains on foreign currency borrowings of US$2.1 million, (2008: US$2.4 million loss). Other interest charges arise mainly from monetary correction on other tax balances. 

Taxation

The US$31.2 million tax charge (2008: US$38.6 million) for the year represents an effective tax rate for the period of 22% (2008: 122%). The corporate tax rate prevailing in Brazil is 34%. The difference in the effective tax rate principally reflects income arising in our Bermudian companies that are not subject to income or capital gains tax and deferred tax movements. The lower effective tax rate in 2009 primarily reflects the income from our Bermudian investment portfolio and an IFRS deferred tax credit of US$35.1 million (2008 US$32.3 million charge). The IFRS deferred tax credit arises on the retranslation of the non-current assets caused by the appreciation of the Real against the US Dollar. This IFRS deferred tax effect is partly offset by a deferred tax charge of US$15.2 million (2008 US$19.4 million credit) arising from the exchange variance on borrowings. In 2008 the effective tax rate was adversely impacted by the loss from our Bermudian investment portfolio of US$59.5million.

Earnings per share

Basic earnings per share for the year were 198.5 cents, compared with 75.5 cents losses per share in 2008.

Cash flow

Net cash flow from operating activities for the year at US$52.2 million was in line with prior year (2008: US$52.1 million).

Capital expenditure of US$139.7 million was mainly invested on vessel construction and new port operations equipment (2008: US$90.2 million). Higher capital expenditure was driven principally by increased vessel construction at our shipyard in Guaruja with the expansion of our Platform Supply Vessels (PSV) fleet and tugboat fleet renewal programme. During 2009 the Group completed seven tugboats and a further two PSVs.

The Group drew down additional loans of US$84.0 million during the year to finance asset construction (2008: US$49.1 million) and made capital repayments on existing loans of US$16.8 million (2008: US$13.4 million).

At 31 December 2009 the Company and its subsidiaries had US$196.4 million in cash and cash equivalents (31 December 2008: US$205.3 million) of which US$97.2 million was in US Dollar denominated assets and US$94.9 million in Brazilian Real denominated  assets.

Balance sheet

At the year end the Group's net equity (equity attributable to ordinary shareholders of the Company) amounted to US$493.0 million (2008 US$424.6 million). This increase is attributable to the appreciation of the Brazilian Real and to the profit in the period after minority interests. This translates into net assets per share excluding minority interests of US$13.94 per share (31 December 2008: US$12.01). Of this trading investments held by Ocean Wilsons Investments Limited of US$238.7 million equates to US$6.75 per share. Ocean Wilsons Investments Limited trading investments together with the proportion of Wilson Sons Limited cash and investments held outside Brazil attributable to the Group of US$55.0 million  equates to US$8.30 per share.

Included in trading investments of US$ 249.8 million at 31 December 2009 is US$11.1 million in Real denominated fixed rate certificates held by Wilson Sons Limited. These investments are not part of the Group's investment portfolio managed by Hanseatic Asset Management LBG and are intended to fund Wilson Sons Limited operations in Brazil.

Minority interests increased from US$139.5 million at the beginning of the year to US$180.2 million principally due to the appreciation of the Brazilian Real and the Wilson Sons Limited profit attributable to minority interest in the period.

Debt

At 31 December 2009 the Group's borrowings (including obligations under finance leases) were US$ 268.0 million (31 December 2008 US$189.5 million). New loans of US$84.0 million (2008 US$ 49.1 million) were raised to finance vessel construction and the port operation equipment. At 31 December 2009 the Group held US$244.6 million in US Dollars term loans or linked to the US Dollar with long maturity profiles for debt repayments. Repayments of borrowings and finance leasing obligations in the year in accordance with debt repayment schedules were US$20.7 million (2008: US$15.4 million).

Segmental reporting

The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board to allocate resources to segments and assess performance. As a result, following the adoption of IFRS 8 the Group has two reportable segments; maritime services and investment. Shareholders wishing a breakdown of the maritime services segment should read the Wilson Sons report on the Wilson Sons website www.wilsonsons.com:

INVESTMENT MANAGERS REPORT

Hanseatic Asset Management LBG that manages the Group's Investment portfolio reports as follows:

Background

Equity markets were strongly positive in 2009.  Having bottomed in early March, most markets recorded significant gains.  The MSCI World Index of developed markets rose by 30%.  The best performing region was Asia ex-Japan.  Japanese stocks, on the other hand, were disappointing with only marginal gains.  Elsewhere, the UK and Continental Europe exceeded the returns from North America.  Emerging Markets were very strong with the MSCI Emerging Markets Index rising by 74.5% over the year.

At the end of 2008, markets were discounting a very negative outlook for the world.  However, the extraordinary nature of the policy response by governments and Central Banks narrowly averted a repeat of a 1930's-style depression.  The near total collapse of financial intermediation following the demise of Lehman Brothers created severe stresses in the world's capital markets and trade flows.  Whatever the longer-term consequences of ballooning public deficits and quantitative easing, this unsustainable policy mix did achieve traction and the point of maximum risk for the world economy has passed.

Robust economic activity in China and elsewhere in Asia provided a favourable backdrop for commodity prices.  Copper appreciated by 145% and oil as measured by the price per barrel for West Texas Intermediate Crude rose by 78%.  Longer-term concerns about the prospects for paper money under current policy settings supported the Gold price, which rose by 24.5%.

As investors' appetites for riskier assets increased in 2009 and funds migrated back into emerging markets, this was reflected in the depreciation of the US dollar against most currencies.  The dollar fell by 3% against the Euro, by 10% against Sterling and by 25% against the Brazilian Real.  The dollar appreciated by 3% against the Yen.  The enthusiasm for high yield was also apparent in bond markets as US 10 year Treasury bond yields increased by 162bps over 2009 and the Barclays Capital Global High Yield Index rallied strongly by 59.4%.

INVESTMENT PORTFOLIO PERFORMANCE (excluding cash and liquidity funds)

Sector	Portfolio Weighting		Time Weighted Return		MSCI Return
	%		%		%
Emerging Markets	21.1		19.6		74.5
Far East	11.6		43.1		78.0
United Kingdom	11.0		36.8		43.2
Global	35.8		54.3		30.0
Japan	5.0		7.8		7.8
United States	12.5		40.8		28.6
Continental Europe ex-UK	3.0		63.3		30.4
TOTAL	100.0		35.7		30.0

Within the portfolio, the biggest contribution came from the global or 'thematic' silo (predominantly commodity exposure) and the standout individual investment was the BlackRock World Mining Trust, which recovered sharply from the oversold levels at the end of 2008.  Despite appreciating by 143% in 2009, the shares were still 31% below their all time high.  The long-term fundamentals for mining remain attractive and are interlinked with the investment case for the 'BRIC's'.

The substantial overweighting in the Far East bore fruit as the region outperformed other parts of the world.  After mining-related investments, this was the best performing area of the portfolio.  The top performing investments by contribution were BlackRock World Mining Trust, Lansdowne UK Equity Fund Ltd, Aberdeen Global Asia Pacific Equity Fund, Oaktree CM Value Opportunities Fund Ltd and Neptune Russia and Greater Russia Fund.

PORTFOLIO ACTIVITY

At the beginning of the year, the portfolio had cash and liquidity funds of $119.8m available for investment.  During 2009, a net amount of approximately $51m was deployed.  Of this, $77.7m was for "new investments", $3.6m was for "follow-on investments" (additions to pre-existing holdings) and there were drawdowns of capital in the portfolio's illiquid investments of $3.0m.

PURCHASES - NEW INVESTMENTS

14 new investments, totalling $77.7m, were made in 2009, as detailed below:

Ashmore Global Opportunities Ltd invests into a range of Ashmore global emerging market strategies.  These include Ashmore Global Special Situations Fund IV and V, Ashmore Asian Recovery Fund, Ashmore Multi Strategy Fund and Ashmore Emerging Markets Corporate High Yield Fund.

BlackRock UK Emerging Companies Hedge Fund Ltd / BlackRock Hedge Selector Ltd - UK Emerging Companies Class are invested in UK small cap equities across market sectors.

BlueBay High Income Loan Fund is primarily invested in European senior secured leveraged loans.  The Fund may also invest to a lesser extent in North America.

BlueCrest AllBlue Leveraged Feeder Ltd is a 1.5x leveraged multi strategy hedge fund investing in a selection of BlueCrest managed underlying funds.

Capital International Emerging Market Debt Fund invests in local currency and US dollar denominated sovereign and corporate debt securities, issued in Emerging Markets.

ETFS Natural Gas is an open ended Exchange Traded Commodity.  It is designed to track the DJ-UBS Natural Gas Total Return Index.

GLG Emerging Currency and Fixed Income Fund invests in Emerging Market currencies, fixed income and their derivatives.  The Fund is an absolute return hedge fund.

Investec Global Energy Long Short Fund is a long/short hedge fund investing in energy related equities, commodities and derivative instruments.  In light of the volatile energy markets and significant rally in 2009, the Investment Adviser decided to consolidate the portfolio's long energy exposure into a hedged vehicle.  Holdings in BP Plc, Investec Global Energy (long fund) and Royal Dutch Shell Plc were switched into the Fund.

JABCAP Global Balanced Fund seeks to achieve long term capital appreciation with an emphasis on capital protection through an active asset allocation policy investing in global equities, fixed income and cash instruments.  The Fund is an absolute return hedge fund.

Neptune Japan Opportunities Fund is invested in Japanese equities with a bias towards mid and large cap stocks.

Phaunos Timber Fund Ltd invests in global timberlands and timber related investments with a focus on Emerging Markets

RWC Biltmore Fund invests predominantly in large-cap US equities.  The Fund is a long/short hedge fund.

RWC Global Convertibles Fund invests in global convertible securities.  In one of the worst years in history for credit products, convertible bonds were one of the worst performing asset classes in 2008.  This happened for a number of reasons including becoming over-owned by leveraged investors such as hedge funds and arbitrage houses.

PURCHASES - FOLLOW ON INVESTMENTS

In addition, four investments were made to pre-existing (prior to 2009) holdings during the year.  These additions, totalling $3.4m, were into the following holdings: (i) Aberdeen Global Asia Pacific Equity Fund, (ii) Lansdowne UK Equity Fund, (iii) Pacific Alliance China Land Ltd and (iv) Prusik Asia Fund.

SALES

16 sales totalling $33.3m, were made in 2009, as detailed below:

Ashmore Local Currency Debt Fund was switched into the Capital International Emerging Market Debt Fund, which offers the ability to switch into local currency investments from US dollars and vice versa.  Additionally, its fee structure represents better value.

BlackRock Agriculture Fund was redeemed following the resignation of the lead manager.

BlueBay European Credit Opportunity Fund was wound up.  The proceeds were switched into BlueBay High Income Loan Fund.

BP Plc was switched into Investec Global Energy Long Short Fund.

Close Far East Equity Fund was redeemed due to dissatisfaction with the new manager's performance since being appointed in June 2007.  The proceeds were switched into Aberdeen Global Asia Pacific Equity Fund and Prusik Asia Fund.

Finsbury Growth & Income Trust PLC was sold in favour of the BlackRock Hedge Selector Ltd - UK Emerging Companies.

Genesis Emerging Markets Fund was sold in order to take profits following a strong rally in Emerging Markets.

Investec Global Energy Fund was switched into Investec Global Energy Long Short Fund.

Ivanhoe Mines Ltd was sold following a strong share price performance in 2009.

Lansdowne Macro Fund was redeemed following disappointment with the Fund's performance.

North American Banks Fund Ltd was sold following an offer in excess of the recent placing price.

Orbis Japan Equity Fund was redeemed in favour of the Neptune Japan Opportunities Fund.

Royal Dutch Shell Plc was switched into Investec Global Energy Long Short Fund.

SM Investors Offshore Ltd was redeemed in favour of RWC Biltmore Fund.

Summit Germany Ltd was sold with the acceptance of a €0.21 per share offer to take the company private by management at a lower valuation than we had estimated.

UFG Russia Select Fund was redeemed following disappointment with the Fund's performance.

INVESTMENTS  - COMMITMENTS at 31 December 2009

Investment	Original Commitment	Drawdowns during 2009	Outstanding Commitment
	$000	$000	$000
African Development Partners I, LLC # *	4,994	981	3,834
Ashmore Global Special Situations IV, LP	5,000	-	-
CLSA MezzAsia Capital, LP	3,000	-	271
Herald Ventures II, LP #	911	115	161
Helios Investors II LP *	5,000	-	5,000
Hupomone Capital Fund, LP	3,000	360	840
NYLIM Jacob Ballas India Fund III, LLC	5,000	434	3,470
Oaktree CM Principal Fund V Ltd *	5,000	750	4,250
Oaktree CM Value Opportunities Fund Ltd	5,000	-	-
R/C Global Energy and Power Fund IV, LP	5,000	351	3,342
Total	41,905	2,991	21,168

Notes:

(i)         # non USD commitment expressed in US dollars.

(ii)        * commitment entered into during 2009.

(iii)       The outstanding commitment of $21,168,000 is covered by cash and liquidity funds amounting to $75.0m or 354%

Three new investment commitments, totalling $15m, were made to illiquid investments in 2009, as detailed below:

African Development Partners I, LLC has a Pan-African geographic focus, particularly on rapid growth post conflict countries.  The manager will invest in profitable or cash flow positive companies in industries benefiting from the growth of an emerging middle class across Africa.

Helios Investors II, LP will make private equity and special situations investments in African companies, with a specific focus on Nigeria, Kenya and Angola.  The Fund will target growth equity investments in neglected sectors exhibiting high growth potential and acquisitions of established businesses such as non core subsidiaries of Western multinationals.

Oaktree Principal Fund V, LP will invest in the debt issues of distressed companies, with the aim of taking control of the assets of the business.  The manager will also seek to make opportunistic purchases of assets from distressed or motivated sellers in industries such as shipping, aircraft leasing and oil and gas.

INVESTMENT PORTFOLIO at 31 December 2009	Market Value		% of
	$000		NAV
Lansdowne UK Equity Fund Ltd	10,888		4.4
BlueCrest AllBlue Leveraged Feeder Fund	10,436		4.3
GLG Emerging Currency and Fixed Income Fund	10,128		4.1
CIP Emerging Markets Debt Fund	10,009		4.1
BlackRock World Mining Trust Plc	8,112		3.3
Oaktree CM Value Opportunities Fund Limited	6,696		2.7
Investec Global Energy Long/Short Fund	6,273		2.6
RWC Global Convertibles Fund	5,602		2.3
BlackRock UK Emerging Companies Hedge Fund	5,328		2.2
SR Global Fund Class G Emerging Markets	5,283		2.1
	78,755		32.1
Prusik Asia Fund	5,187		2.1
Aberdeen Global Asia Pacific	5,053		2.1
Jupiter European Opportunities Trust Plc	4,749		1.9
Findlay Park American Smaller Companies Fund	4,340		1.8
Neptune Russia & Greater Russia Fund	3,879		1.6
Ashmore Global Special Situations Fund IV, LP	3,874		1.6
JO Hambro Japan Fund	3,815		1.6
BlackRock Hedge Selector - UK Emerging Companies	3,229		1.3
Neptune Japan Opportunities Fund	3,190		1.3
SR Global Fund - Asia	3,117		1.2
Top 20 Investments	119,188		48.6
ETFS Natural Gas	3,109		1.3
RWC Biltmore	3,019		1.2
Harbinger CP Special Situations Fund	2,986		1.2
BlackRock Middle East & North Africa Opps. Fund	2,969		1.2
Jabcap Global Balanced Fund	2,818		1.1
Pacific Alliance China Land Ltd	2,737		1.1
BlueBay High Income Loan Fund	2,623		1.1
Phaunos Timber Fund Limited	2,346		1.0
Ashmore Global Opportunities Limited	2,139		0.9
Jupiter Financial Opportunities Fund	2,009		0.8
Top 30 Investments	145,945		59.5
Other Investments (29)	24,171		9.9
Net Current Assets - including cash and liquidity funds	75,073		30.6
Total	245,189		100.0

MARKET OUTLOOK

Historically, stock prices tend to flatten out as the initial burst of momentum created by recovery begins to fade. 2010 will in all likelihood prove to be a very different environment for investors.  Policy settings could not have been more supportive in 2009.  However, neither quantitative easing nor ballooning fiscal deficits are sustainable policy options.  As Central Banks withdraw from their unprecedented support for capital markets and governments reign in deficits, either through higher taxation or higher inflation, markets will face some serious challenges.

For now, there are several areas of support for equity markets.  Very low rates of return on cash make it expensive not to own risk assets.  Excess capacity in the developed world suggests that any normalisation in short term interest rates remains in the future.  Central Banks are most likely to err on the side of caution with regard to tightening policy.  As well as the cost of holding cash, equities are supported as an asset class by reasonable levels of valuation, together with rising profit margins.  Although the domestic economies in developed countries may look problematic, there are many multinational companies listed on those markets whose business growth is being driven by the developing world.

Investors are generally disenchanted with equities particularly those in better quality, large capitalisation companies.  This is due to a decade of poor returns in developed markets (MSCI World -0.2% per annum, S&P 500 -1.0% per annum and Nikkei -5.8% per annum).  Confidence in the current equity rally remains fragile.  Investors know that recessions can be beneficial in the greater scheme of things and that by bypassing them, imbalances are embedded and can only accumulate.  For governments, they represent only electoral liability.  Consequently, investors fear the steps policy makers will take to avoid recessions at any price.  As a result of the ambivalent outlook, investors' overall exposure to equities is not excessive and a significant amount of inflows in 2009 were at the riskier end of the spectrum (i.e. in highly leveraged companies who have been bailed out by near-zero interest rates) rather than traditional high quality growth companies.

The contrast in economic fundamentals between Asia and the developed world is very marked.  Growth prospects are greatly superior in Asia. 2009 proved a year where 'de-coupling' came to the fore.  The engine at the heart of Asia is unquestionably China with an annual urban migration of 15 million people continuing to drive GDP growth.  Consumption levels are rising and although China's export sector was hard hit by the collapse in world trade and a dormant US consumer, so far the evidence suggests that internal demand can support annual growth in the region of 8-9%.  With the developed world severely hampered by a broken banking system and vast deficits, loose money is inevitably finding its way into Asian markets.  With many Asian currencies pegged artificially low to the US dollar, there is a rapidly rising risk of a bubble occurring in the Asian markets.

Whilst there is clear potential for capital gain in Asian currencies as policy markers re-evaluate the risk of tracking the US dollar lower, other currencies are less clear cut.  The Euro looks overvalued from the UK perspective and the plight of economies such as Greece must be imposing huge strains on European Central Bank policy.  Sterling is also at risk in an election year and with an economy so dependent on financial services sentiment towards the UK is unlikely to improve for some time.  The US dollar has effectively become the "next carry trade".  Sentiment is so negative on the dollar that a rally would not come as a surprise. However, the longer-term picture with countries such as China and several Sovereign Wealth Funds diversifying away from dollars is worrying.  In this context, the credibility of US policy will have little margin for error.

It would appear that the world has recovered from the brink.  The analogy has been made that the world economy now looks more like a stalled car than a plane in mid-flight that has run out of fuel.  Recovery is anaemic but comparisons are with a very low base.  Historically equities are a good asset class to own until the recovery matures and policies tighten.  The troubling fact remains, however, that governments must fund their expenditure and Central Banks will inevitably need to tighten at some point.  Such prospects will constrain progress and investor expectations will need to adjust accordingly.

In summary, the developed world economies face a prolonged period of sub-par GDP growth.  Surplus capacity in those economies is supporting a highly stimulative policy stance.  This in turn has supported financial markets.  Government credibility is on the line, however, as deficits balloon and at some point bond markets will react at the prospect of ever-growing issuance at coupons that leave no more margin for error.  Monetary and fiscal policy settings have succeeded in preventing catastrophe but are not sustainable.  Although balance sheets in the banking sector have improved, the banking system is not functioning as it needs to and growth prospects are muted.  There is a different picture in the developing world.  How much these economies can sustain the world with the West either in or bordering on recession remains to be seen.  Increasingly the world is looking towards the Central Bank of China where once it looked towards the US Federal Reserve.

Hanseatic Asset Management LBG

February 2010

WILSON SONS LIMITED OPERATING REVIEW

We have summarised the following highlights from the Wilson Sons 2009 Earnings Report released on the 23 March 2010. Wilson Sons represents one segment for IFRS 8 segmental reporting purposes in the Ocean Wilsons Holdings Limited accounts. The full report is available on the Wilson Sons Limited website: www.wilsonsons.com:

Wilson Sons Limited, through its subsidiaries in Brazil, is one of the largest integrated operators of port and maritime logistics in the Brazilian market, with 170 years of experience, offering a comprehensive range of services with emphasis on the port and shipping sector. Wilson Sons  principal businesses are port terminals, towage, logistics, shipping agency and offshore

Macro conditions

Brazil's domestic economy grew during the year although the strong real and global financial crisis continued to put pressure on exporters. Despite the challenging market, Wilson Sons' resilient business model has produced improved consolidated results for 2009 driven by positive performance in key business volumes and margins.

Business performance

Building on a solid base, Wilson, Sons' 2009 results continued the long-term growth trend shown in previous periods. EBITDA in 2009 grew only 4.6% to US$128.4 million from US$122.7million in 2008, however 2008 benefitted from higher non-recurring fiscal credits. If the effect of fiscal credits is excluded, underlying EBITDA growth improved to 21.5%. This improvement  was achieved through our continued focus on high margin business areas such as towage special operations and offshore.

2009 Profit for the year grew 92% as a result of improved margins and financial revenues of US$ 34.3million (including exchange gains on cash investments of USD  24.0million for 2009).

2008 revenue included significant third party shipyard sales which mask an underlying year on year increase in core business revenues. Revenue increased 77% in offshore as a result of our expanded fleet and 3% in port terminals, largely achieved through a diversified cargo profile;

Highlights

The principal highlights from the 2009 results were;  volume growth at port terminals despite international economic weakness, increased percentage of towage revenues in higher margin special operations, exceptional offshore business performance driven by premium priced spot market services linked to the demand from the booming Oil and Gas sector and revenue & EBITDA growth at Brasco.

Port Terminals

Wilson Sons port terminals operates two container terminals, located in Rio Grande, Rio Grande do Sul and Salvador in Bahia, Brazil (Tecon Rio Grande and Tecon Salvador). Both terminals, offer assistance in port operations for loading and unloading of vessels, storage, and auxiliary services. Wilson Sons also operates Brasco, located in Rio de Janeiro, which provides support services to the oil and gas industry

Net revenue grew 3% from US$170.5 million to US$175.4 million due to increased container volumes and revenue from Brasco. Revenue at Brasco grew 78% to US$26.7 million driven by growth in spot revenue and new client contracts. Brasco accounted for 16% of all port terminal revenue in 2009.

Container volumes at 888,266 TEUs (Twenty foot equivalent units) were 3% higher than 2008. Volumes towards the end of the year were adversely impacted by reductions in Tecon Rio Grande cabotage volumes, mainly due to lower rice exports  caused by higher than normal rainfall. Salt and resin volumes were also weaker. These reductions were offset by increased Tecon Salvador cabotage volumes, mostly petrochemical resins. Higher deep-sea cargo volumes in Rio Grande resulted  mainly from increased polyethylene resins, tobacco and pulp/paper movements. Empty container volumes were adversely affected by the international rebalancing of empty containers.

EBITDA at US$58.3 million was 8% lower than 2008, (US$63.4 million) with the decline in warehousing and auxiliary services adversely impacting container terminal margins. Brasco accounted for 16% of port terminal EBITDA (2008 4%) due to increased revenue, growth in higher margin spot revenue and cost reductions following acquisition of the Niteroi operational base in January 2009.

Towage

Wilson Sons offers harbour towage, ocean towage, salvage support and maritime support to the offshore oil and gas industry.

Towage revenue at US$145.7 million was marginally lower than 2008, US$147.1 million due to the weakness in global demand although EBITDA at US$61.3 million was 12% higher than 2008, US$54.5 million. The improvement in EBITDA resulted from growth in higher margin special operations in 2009 and cost savings implemented. Special Operations, mainly to the offshore oil and gas industry represented 14% of towage revenue in 2009, a 5% point increase over 2008.

During 2009 as part of the Group's fleet renewal programme the Group delivered seven new tugboats (Atria, Andromeda, Vega, Hadar, Uranus, Cepheus e Auriga) constructed at our shipyard in Guaruja, Sao Paulo state.

Offshore

Wilson Sons operates platform supply vessels (PSVs), to transport equipment and supplies to and from offshore oil and gas installations.

The Group's offshore business continued to grow with revenue increasing by 77% from US$21.6 million in 2008 to US$38.1 million in 2009 due to the expansion of our PSV fleet. At yearend the Group operated 3 PSVs on long-term contracts and another 4 PSVs (2 of which are owned by Magallanes and chartered to Wilson, Sons) at spot rates, on short-term, renewable contracts.

Operating margins in the year decreased to 36% from 38% in 2008 largely due to payments to Magallanes for the Petrel & Skua as the vessels are chartered into the Wilson Sons fleet in advance of completion of the joint venture. Fourth quarter margins were also slightly impacted by higher maintenance and personnel costs.

With respect to 'Wilson, Sons UltraTug Offshore', a joint venture created to support oil & gas activities in exploration and production activities, the Company announced in October of 2009 the signing of a contract agreement with Chile's Ultratug Group and is continuing to procure the necessary approvals in order to finalise the joint venture's formation. 

The Group's shipyard delivered two new PSVs during the year (Petrel e Skua) which are currently operating in the spot market prior to entering long term contracts with Petrobras in 2010. 

Logistics

Wilson Sons develops and provides differentiated logistics solutions for the management of the supply chain of our clients and the distribution of products, including a number of logistics services, such as, storage, customs storage, distribution, highway transportation, multimodal transportation and NVOCC - Non Vessel Operating Common Carrier.

 Revenue from our logistics business decreased 15% from US$89.3 million to US$75.8 million principally due the higher average Real/US Dollar exchange rate during the year and management focus on reducing the number of low margin operations. A higher average exchange adversely impacts Real denominated revenues when translated into US Dollars. Highlights in the period include signing new contracts (mainly for the steel industry) and increasing the range of services performed for existing clients.

EBITDA for the year increased by 7% from US$6.6 million to US$7.1 million although EBITDA margins suffered in the later part of the year as new projects were not sufficient to compensate for contracts terminating in the same period. 

Ship Agency

Wilson Sons acts as the ship owners' representative as well providing the following services to ship owners: commercial representation, cargo documentation, container control and vessel support.

The downward trend in business volume continued in the year with revenue declining 14% from US$17.6 million to US$15.2 million in 2009. Cost reductions are being implemented to maintain profitability.

Operating profit at US$2.2 million was US$0.9 million lower than 2008 (US$3.1 million).Some of the positive highlights in the period included a greater diversification of the service base, geared towards new solutions for oil & gas clients (i.e. FPSO support).

Unallocated

Unallocated activities include shipyard and unallocated corporate costs.

Revenue in 2009 decreased 47% from US$52.2 million to US$27.6 million due to a reduction in third-party PSV construction activity at the shipyard in Guarujá (SP). The decline in EBITDA  was smaller at 10% as the lower revenues were partially offset by a reduction in management costs and lower raw material costs.

During the period the company received additional priority approval from the Fundo de Marinha Mercante for shipyard expansion and multipurpose vessel construction totalling US$227.3 million.

Ocean Wilsons Holdings Limited
Consolidated statement of comprehensive income
for the year ended 31 December 2009
					Year to		Year to
					31 December		31 December
					2009		2008
			Notes		US$'000		US$'000
	Revenue		3		477,888		498,285
	Raw materials and consumables used				(49,570)		(86,480)
	Employee benefits expense		6		(162,367)		(130,189)
	Depreciation & amortisation expense				(32,066)		(26,259)
	Other operating expenses				(155,042)		(157,699)
	Profit on disposal of property, plant and equipment				470		681
	Operating profit				79,313		98,339
	Investment revenue		7		35,613		6,751
	Other gains and losses		8		34,305		(59,462)
	Finance costs		9		(9,411)		(14,078)
	Profit before tax				139,820		31,550
	Income tax expense		10		(31,228)		(38,641)
	Profit / (loss) for the period				108,592		(7,091)
	Other comprehensive income
	Available for sale financial assets:
	Gains/(losses) arising during the period:				-		(2,341)
	Exchange differences arising on translation of
	foreign operations				16,072		(16,119)
	Other  comprehensive income / (loss) for the period				16,072		(18,460)
	Total  comprehensive income / (loss) for the period				124,664		(25,551)
	Profit / (loss) for the period attributable to:
	Equity holders of parent				70,200		(26,700)
	Minority interests				38,392		19,609
					108,592		(7,091)
	Total comprehensive income / (loss) for the period attributable to:
	Equity holders of parent				79,059		(40,087)
	Minority interests				45,605		14,536
					124,664		(25,551)
	Earnings / (loss) per share
	Basic and diluted		12		198.5c		(75.5c)

Ocean Wilsons Holdings Limited
Consolidated balance sheet
as at 31 December 2009
					As at		As at
					31 December		31 December
					2009		2008
					US$'000		US$'000
	Non-current assets
		Goodwill			15,612		15,612
		Other intangible assets			2,239		1,799
		Property, plant and equipment			438,892		305,035
		Deferred tax assets			25,499		10,889
		Other non-current assets			10,521		8,065
					492,763		341,400
	Current assets
		Inventories			20,687		9,401
		Trading investments			249,778		209,994
		Trade and other receivables			107,075		78,826
		Cash and cash equivalents			196,428		205,315
					573,968		503,536
	Total assets				1,066,731		844,936
	Current liabilities
		Trade and other payables			(98,690)		(66,093)
		Current tax liabilities			(853)		(1,102)
		Obligations under finance leases			(3,902)		(1,116)
		Bank overdrafts and loans			(18,146)		(17,777)
					(121,591)		(86,088)
	Net current assets				452,377		417,448
	Non-current liabilities
		Bank loans			(237,271)		(167,439)
		Deferred tax liabilities			(16,140)		(15,726)
		Provisions			(9,831)		(8,454)
		Obligations under finance leases			(8,653)		(3,138)
					(271,895)		(194,757)
	Total liabilities				(393,486)		(280,845)
	Net assets				673,245		564,091
	Capital and reserves
		Share capital			11,390		11,390
		Retained earnings			435,844		376,253
		Capital reserves			31,760		31,760
		Translation reserve			14,030		5,171
	Equity attributable to equity holders of the parent		493,024				424,574
	Minority interests				180,221		139,517
	Total equity				673,245		564,091

Ocean Wilsons Holdings Limited

Consolidated Statement of Changes in Equity

as at 31 December 2009

						Attributable
				Investment		to equity
	Share	Retained	Capital	revaluation	Translation	holders of	Minority	Total
	capital	earnings	reserves	reserve	reserve	the parent	interests	equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
For the year ended 31 December 2008
Balance at  1 January 2008	11,390	419,080	29,779	2,341	16,217	478,807	134,251	613,058
Sale of investment	-	-	-	(2,341)	-	(2,341)	-	(2,341)
Currency translation adjustment	-	-	-	-	(11,046)	(11,046)	(5,073)	(16,119)
Profit for the period	-	(26,700)	-	-	-	(26,700)	19,609	(7,091)
Total income and expense for the period	-	(26,700)	-	(2,341)	(11,046)	(40,087)	14,536	(25,551)
Dividends	-	(14,146)	-	-	-	(14,146)	(6,682)	(20,828)
Acquisition of minority interest	-	-	-	-	-	-	(2,588)	(2,588)
Transfer to capital reserves	-	(1,981)	1,981	-	-	-	-	-
Balance at  31 December 2008	11,390	376,253	31,760	-	5,171	424,574	139,517	564,091
For the year ended 31 December 2009
Balance at 1 January 2009	11,390	376,253	31,760	-	5,171	424,574	139,517	564,091
Currency translation adjustment	-	-	-	-	8,859	8,859	7,213	16,072
Profit for the period	-	70,200	-	-	-	70,200	38,392	108,592
Total income and expense for the period	-	70,200	-	-	8,859	79,059	45,605	124,664
Dividends	-	(10,609)	-	-	-	(10,609)	(6,682)	(17,291)
Increase in capital	-	-	-	-	-	-	1,781	1,781
Balance at  31 December 2009	11,390	435,844	31,760	-	14,030	493,024	180,221	673,245

Share capital

The Group has one class of ordinary share, which carries no right to fixed income.

Capital reserves

The capital reserves arise principally from transfers from revenue to capital reserves made in the Brazilian subsidiaries arising in the following circumstances.

(a) profits of the Brazilian subsidiaries and Brazilian holding company which in prior periods were required by law to be transferred to capital reserves and other profits not available for distribution; and

(b) Wilson Sons Limited byelaws require the company to credit an amount equal to 5% of the company's  net profit to a retained earnings account to be called legal reserve until such amount equals 20% of the Wilson Sons Limited share capital.

Investment revaluation reserve

The investment revaluation reserve was the difference between the cost of the available for sale investment and the market value at the balance sheet date.

The investment was disposed of during the financial year ending 31 December 2008.

Translation reserve

The translation reserve arises from exchange differences on the translation of operations with a functional currency other than US Dollars.

Amounts in the statement of changes of equity are stated net of tax where applicable

Ocean Wilsons Holdings Limited Consolidated Cash flow Statement
for the year ended 31 December 2009
				Year to		Year to
				31 December		31 December
				2009		2008
			Notes	US$'000		US$'000
	Net cash inflow from operating activities		13	52,238		52,112
	Investing activities
	Interest received			10,379		23,554
	Dividends received from trading investments			1,487		2,250
	Proceeds on disposal of trading investments			104,941		115,683
	Income from underwriting activities			2		390
	Proceeds on disposal of property, plant and equipment			751		1,950
	Purchases of property, plant and equipment			(139,742)		(90,190)
	Purchases of trading investments			(110,420)		(112,305)
	Net cash outflow arising on purchase of minority interest			-		(5,059)
	Net cash inflow arising on increase in capital in minority interest			1,781		-
	Net cash used in investing activities			(130,821)		(63,727)
	Financing activities
	Dividends paid		11	(10,609)		(14,146)
	Dividends paid to minority shareholders in subsidiary			(6,682)		(6,682)
	Repayments of borrowings			(16,848)		(13,449)
	Repayments of obligations under finance leases			(3,844)		(1,980)
	New bank loans raised			83,894		49,067
	Increase in bank overdrafts			114		113
	Net cash from financing activities			46,025		12,923
	Net (decrease) / increase in cash and cash equivalents			(32,558)		1,308
	Cash and cash equivalents at beginning of year			205,315		227,641
	Effect of foreign exchange rate changes			23,671		(23,634)
	Cash and cash equivalents at end of year			196,428		205,315

Ocean Wilsons Holdings Limited
Notes to the Accounts
1.	General information
	The financial statements have been prepared on the historical cost basis except for the revaluation of financial investments. The accounting policies are consistent with those set out in the 2008 Group annual report.
2.	Basis of Preparation
	The financial information set out in this announcement does not constitute the Group's statutory financial statements for the years ended 31 December 2009 or 2008, but is derived from those accounts. The auditors have reported on those accounts and their reports were unqualified. The Group closely monitors and manages its liquidity risk. The Group has considerable financial resources including US$196.4 million in cash and cash equivalents and the Groups borrowings have a long maturity profile. Based on the Group's cash forecasts and sensitivities run the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.
	Whilst the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.
3.	Revenue
					Year ended									Year ended
	An analysis of the Group's revenue is as follows:				31 December									31 December
					2009									2008
					US$'000									US$'000
	Sales of services				455,801									449,652
	Revenue from construction contracts				22,087									48,633
					477,888									498,285
	Investment income (note 7)				35,613									6,751
					513,501									505,036
	All revenue is derived from continuing operations

4.

Business and geographical segments

The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed  by the Board to allocate resources to the segments and to assess their performance. As a result, following the adoption of IFRS8, the identification of the Group's reportable segments has changed.

Business segments

Ocean Wilsons Holdings has two reportable segments: Maritime services and investments.

The maritime services segment provides towage, port terminals, ship agency, offshore, logistics and vessel construction services in Brazil.

The investment segment holds a portfolio of international investments.

Segment information relating to these businesses is presented below.

For the year ended 31 December 2009

			Maritime
			Services		Investment		Unallocated		Consolidated
			Year ended		Year ended		Year ended		Year ended
			31 December		31 December		31 December		31 December
			2009		2009		2009		2009
			US$'000		US$'000		US$'000		US$'000
	Revenue		477,888		-		-		477,888
	Result
	Segment result		96,303		(2,605)		(14,385)		79,313
	Investment revenue		34,343		1,208		62		35,613
	Other gains and losses		-		34,305		-		34,305
	Finance costs		(9,411)		-		-		(9,411)
	Profit before tax		121,235		32,908		(14,323)		139,820
	Tax		(31,140)		(88)		-		(31,228)
	Profit after tax		90,095		32,820		(14,323)		108,592
	Other information
	Capital additions		(149,553)		-		-		(149,553)
	Depreciation and amortisation		(32,065)		-		(1)		(32,066)
	Balance Sheet
	Assets
	Segment assets		808,665		247,180		10,886		1,066,731
	Liabilities
	Segment liabilities		(383,247)		(409)		(9,830)		(393,486)

For the year ended 31 December 2008

			Maritime
			Services		Investment		Unallocated		Consolidated
			Year ended		Year ended		Year ended		Year ended
			31 December		31 December		31 December		31 December
			2008		2008		2008		2008
			US$'000		US$'000		US$'000		US$'000
	Revenue		498,285		-		-		498,285
	Result
	Segment result		96,436		(3,041)		4,944		98,339
	Investment revenue		3,369		2,734		648		6,751
	Other gains and losses		-		(59,462)		-		(59,462)
	Finance costs		(14,078)		-		-		(14,078)
	Profit before tax		85,727		(59,769)		5,592		31,550
	Tax		(38,725)		84		-		(38,641)
	Profit after tax		47,002		(59,685)		5,592		(7,091)
	Other information
	Capital additions		(93,536)		-		(6)		(93,542)
	Depreciation and amortisation		(26,258)		-		(1)		(26,259)
	Balance Sheet
	Assets
	Segment assets		610,692		213,774		20,470		844,936
	Liabilities
	Segment liabilities		(276,610)		(437)		(3,798)		(280,845)

		Finance costs and associated liabilities have been allocated to reporting segments where interest costs arise from loans used to finance the construction  of fixed assets in that segment.
		Unallocated includes corporate costs assets and liabilities including the Ocean Wilsons Holdings Limited long-term incentive plan. The long term incentive plan is a cash settled phantom option scheme linked to the Wilson Sons Limited share price. The scheme is fair valued using a Binomial model at each reporting date.
		Geographical Segments
		The Group's operations are located in Bermuda, Brazil and  United Kingdom.
		All the Group's sales are derived in Brazil.
		The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment, analysed by the geographical area in which the assets are located.
			Carrying amount of segment assets					Additions to property, plant and equipment and intangible assets
								Year ended		Year ended
			31 December		31 December			31 December		31 December
			2009		2008			2009		2008
			US$'000		US$'000			US$'000		US$'000
	Brazil		713,816		501,286			149,553		93,536
	Bermuda		350,736		341,129			-		6
	Other		2,179		2,521			-		-
			1,066,731		844,936			149,553		93,542

5.	Profit for the year
					Year ended		Year ended
	Profit for the year has been arrived at after charging:				2009		2008
					US$'000		US$'000
	Net foreign exchange (gains) / losses				25,769		(26,003)
	Depreciation of property plant and equipment				31,917		25,960
	Amortisation of intangible assets				149		299
	Operating lease rentals				12,440		12,058
	Auditors' remuneration (see below)				837		938
	Non-executive directors emoluments				230		220
	A more detailed analysis of auditors remuneration is provided below:
	Statutory audit				752		849
	Further assurance services				72		83
	Other services				13		6
					837		938

As a matter of routine, the Group reviews taxes and levies impacting its businesses with a view to ensuring that payments of such amounts are correctly made and that no amounts are paid unnecessarily. In this process, where it is confirmed that taxes and/or levies have been overpaid, the Group takes appropriate measures to recover such amounts.

During the year ended 31 December 2007, the Group received a response to a consultation to tax officials confirming the exemption of certain transactions to taxes, which the Group had been paying through that date. This response permits the Group to recoup such amounts paid in the past provided the Group takes certain measures to demonstrate that it has met the requirements of tax regulations for such recovery. During 2009, the Group was able to meet such requirements and recognized US$6.5 million (2008: US$22.4 million) as a credit in the Consolidated statement of Comprehensive Income for that year. The Group concluded the process in 2009.

6.	Employee benefits expense
									Year ended		Year ended
									31 December		31 December
									2009		2008
									US$'000		US$'000
	Aggregate remuneration comprised:
	Wages and salaries								117,095		110,665
	Share based payment expense								17,174		(8,148)
	Social security costs								27,370		26,623
	Other pension costs								728		1,049
									162,367		130,189
7.	Investment revenue
									Year ended		Year ended
									31 December		31 December
									2009		2008
									US$'000		US$'000
	Interest on bank deposits								10,379		23,554
	Exchange gains / (losses) on cash								23,671		(23,634)
	Dividends from equity investments								1,487		2,250
	Investment revenues from underwriting activities								76		390
	Profit on sale of investment								-		4,191
									35,613		6,751

In the financial year ended 31 December 2008 the profit on sale of investment of US$4,191,000 arose from the Group's  investment in Barcas S.A Transportes Maritimos.

8.	Other gains and losses
								Year ended			Year ended
								31 December			31 December
								2009			2008
								US$'000			US$'000
	Increase / (decrease) in fair value of trading investments held at year end							36,337			(65,406)
	(Loss) / profit on disposal of trading investments							(2,032)			5,944
								34,305			(59,462)
9.	Finance costs
								Year ended			Year ended
								31 December			31 December
								2009			2008
								US$'000			US$'000
	Interest on bank overdrafts and loans							7,580			7,028
	Exchange (gain) / losses on foreign currency borrowings							(2,098)			2,369
	Interest on obligations under finance leases							1,254			677
	Total borrowing costs							6,736			10,074
	Other interest							2,675			4,004
								9,411			14,078
	Borrowing costs incurred on qualifying assets of US$728,000 (2008: nil) were capitalised in the period.

10.	Taxation
									Year ended		Year ended
									31 December		31 December
									2009		2008
									US$'000		US$'000
	Current
	Brazilian taxation
	Corporation tax								31,429		22,923
	Social contribution								12,031		9,310
	Total Brazilian currrent tax								43,460		32,233
	UK corporation tax								187		-
	Total current tax								43,647		32,233
	Deferred tax
	Charge / (credit) for the year in respect of deferred tax liabilities								23,507		(22,635)
	(Credit)/ charge for the year in respect of deferred tax assets								(35,926)		29,043
	Total deferred tax								(12,419)		6,408
	Total taxation								31,228		38,641

Brazilian corporation tax is calculated at 25 percent (2008: 25 percent) of the assessable profit for the period.

Brazilian social contribution tax is calculated at 9 percent (2008: 9 percent) of the assessable profit for the period.

At the present time, no income, profit, capital or capital gains taxes are levied in Bermuda and accordingly, no provision for such taxes has been recorded by the company. In the event that such taxes are levied, the company has received an undertaking from the Bermuda Government exempting it from all such taxes until 28 March 2016.

11.	Dividends
									Year ended		Year ended
									31 December		31 December
									2009		2008
									US$'000		US$'000
	Amounts recognised as distributions to equity holders in the period:
	Final dividend paid for the year ended 31 December 2008 of 26.0c (2007: 36.0 c ) per share								9,194		12,731
	Interim dividend paid for the year ended 31 December 2009 of 4.0c per share (2008: 4.0c)								1,415		1,415
									10,609		14,146
	Interim dividend for the year ended 31 December 2009 to be paid 26 March 2010 of 38.0c (2008: 0.0c) per share								13,438		-

The interim dividend to be paid 26 March 2010 was approved by the Board on the 22 February 2010 and has not been included as a liability in these financial statements.

12.	Earnings per share
	The calculation of the basic and diluted earnings per share is based on the following data:
									Year ended		Year ended
									31 December		31 December
									2009		2008
	Earnings :								US$'000		US$'000
	Earnings / (losses) for the purposes of basic earnings per share being net profit attributable
	to equity holders of the parent.								70,200		(26,700)
	Number of shares :
	Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share								35,363,040		35,363,040
13.	Notes to the cash flow statement
									Year ended		Year ended
									31 December		31 December
									2009		2008
	Reconciliation from profit before tax to net cash from operating activities								US$'000		US$'000
	Profit before tax								139,820		31,550
	Investment revenues								(35,613)		(6,751)
	Other gains and losses								(34,305)		59,462
	Finance costs								9,411		14,078
	Operating profit								79,313		98,339
	Adjustments for:
	Depreciation of property, plant and equipment								31,917		25,960
	Amortisation of intangible assets								149		299
	Share based payment expense								17,174		(8,148)
	Gain on disposal of property, plant and equipment								(470)		(681)
	Increase / (decrease) in provisions								1,377		(4,030)
	Operating cash flows before movements in working capital								129,460		111,739
	Increase in inventories								(11,286)		(2,022)
	Increase in receivables								(25,440)		(9,253)
	Increase / (decrease) in payables								9,748		(6,887)
	Decrease / (increase) in other non-current assets								(2,456)		3,056
	Cash generated by operations								100,026		96,633
	Income taxes paid								(38,550)		(33,067)
	Interest paid								(9,238)		(11,454)
	Net cash from operating activities								52,238		52,112
	Cash and cash equivalents held in Brazil amount to US$94.9 million (2008: US$ 71.8 million).
	Cash equivalents  are held for the purpose of meeting short term cash commitments and not for cash investment purposes.
	Additions to plant and equipment during the year amounting to US$8.9 million (2008: US$3.9 million) were financed by new finance leases.

 

END

 

 

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