Subsidiary Results
Ocean Wilsons Holdings Ld
16 May 2007
Ocean Wilsons Holdings limited
Today our principal operating subsidiary, Wilson Sons Limited announced to the
Brazilian and Luxembourg Stock Exchanges the results of the Company and its
subsidiary companies for the three months ending 31 March 2007. Wilson Sons
Limited reported as follows:
Wilson Sons Limited
Condensed Consolidated Income Statement
for the three months ended 31 March 2007 and 31 March 2006
31/03/07 31/3/06 31/03/07 31/3/06
Notes US$'000 US$'000 R$'000 R$'000
Unaudited Unaudited Unaudited Unaudited
Revenue 3 82,604 77,160 169,371 167,622
Raw materials and consumables used (11,100) (10,015) (22,759) (21,757)
Personnel expenses 4 (21,542) (18,657) (44,170) (40,530)
Depreciation & amortisation expense (4,159) (4,423) (8,527) (9,609)
Other operating expenses (31,380) (32,118) (64,342) (69,773)
Profit on disposal of property, plant 587 123 1,204 268
and equipment
Release of surplus on acquisition of - 1,433 - 3,113
interest in subsidiary
Operating Profit 15,010 13,503 30,777 29,334
Investment revenues 6 3,129 3,453 6,416 7,501
Loss on disposal of investment 5 - (2,822) - (6,131)
Finance Costs 6 (1,401) (1,644) (2,873) (3,571)
Profit before tax 16,738 12,490 34,320 27,133
Income tax expense 7 (4,760) (4,316) (9,760) (9,376)
Profit for the period 8 11,978 8,174 24,560 17,757
Attributable to:
Equity holders of parent 11,650 8,223 23,887 17,864
Minority Interests 328 (49) 673 (107)
11,978 8,174 24,560 17,757
Earnings per share basic and diluted 0.47 1.63 0.97 3.54
Wilson Sons Limited
Condensed Consolidated Balance Sheet
as at 31 March 2007 and 31 December 2006
31/03/07 31/12/06 31/03/07 31/12/06
US$'000 US$'000 R$'000 R$'000
Notes Unaudited Unaudited
Non Current Assets
Goodwill 13,132 13,132 26,926 28,076
Other Intangible assets 2,042 2,053 4,187 4,389
Property, plant and equipment 9 182,801 175,785 374,815 375,828
Deferred tax assets 12,975 8,289 26,604 17,722
Available for sale investments 5,575 5,346 11,431 11,430
Other non-current assets 8,726 7,810 17,892 16,698
225,251 212,415 461,855 454,143
Current Assets
Inventories 12,912 7,061 26,475 15,096
Trade and other receivables 12 58,493 52,812 119,934 112,912
Cash and cash equivalents 49,691 54,597 101,886 116,729
121,096 114,470 248,295 244,737
Total Assets 346,347 326,885 710,150 698,880
Current liabilities
Trade and other payables 15 (54,473) (52,505) (111,691) (112,256)
Current tax liabilities (1,261) (1,756) (2,586) (3,754)
Obligations under finance leases (558) (581) (1,144) (1,242)
Bank overdrafts and loans 13 (15,526) (14,945) (31,835) (31,952)
Derivative financial instruments 14 (562) (782) (1,152) (1,673)
(72,380) (70,569) (148,408) (150,877)
Net current assets 48,716 43,901 99,887 93,860
Non-current liabilities
Bank loans 13 (95,488) (95,216) (195,789) (203,572)
Deferred tax liabilities (12,417) (9,089) (25,460) (19,432)
Provisions 16 (5,446) (5,913) (11,166) (12,640)
Obligations under finance leases (907) (1,098) (1,860) (2,348)
(114,258) (111,316) (234,275) (237,992)
Total liabilities (186,638) (181,885) (382,683) (388,869)
Net assets 159,709 145,000 327,467 310,011
Capital and reserves
Share capital 17 8,072 8,072 16,550 17,258
Retained earnings 109,217 97,567 223,938 208,598
Capital reserves 24,577 24,577 50,393 52,546
Revaluation reserve 2,610 2,381 5,352 5,091
Hedging and translation reserve 11,047 8,573 22,651 18,329
Equity attributable to equity holders 155,523 141,170 318,884 301,822
of the parent
Minority interests 4,186 3,830 8,583 8,189
Total equity 159,709 145,000 327,467 310,011
Wilson Sons Limited
Condensed consolidated statement of changes in equity
For the period ended 31 March 2007 and 2006
Attributable
Investment to equity
Share Retained Capital Revaluation Translation holders of Minority
Capital Earnings Reserves Reserve reserve the parent interests Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
For the three months ended
31 March 2006
Balance at 1 January 2006 8,072 65,190 22,546 1,856 6,576 104,240 1,313 105,553
Gains on available for - - - 78 - 78 - 78
sale investment
Currency translation - - - - 967 967 211 1,178
adjustment
Profit for the period for - 8,223 - - - 8,223 (49) 8,174
the period
Total income and expenses - 8,223 - 78 967 9,268 162 9,430
for the period
Increase in minority - - - - - - 1,524 1,524
interest
Transfer to capital - (786) 786 - - - - -
reserves
Balance at 31 March 2006 8,072 72,627 23,332 1,934 7,543 113,508 2,999 116,507
For the three months ended
31 March 2007
Balance at 1 January 2007 8,072 97,567 24,577 2,381 8,573 141,170 3,830 145,000
Gains on available for - - - 229 - 229 - 229
sale investment
Currency translation - - - - 2,474 2,474 28 2,502
adjustment
Profit for the year - 11,650 - - - 11,650 328 11,978
Total income and expenses - 11,650 - 229 2,474 14,353 356 14,709
for the period
Balance at 31 March 2007 8,072 109,217 24,577 2,610 11,047 155,523 4,186 159,709
Attributable
Investment to equity
Share Retained Capital Revaluation Translation holders of Minority
Capital Earnings Reserves Reserve reserve the parent interests Total
For the three months ended R$'000 R$'000 R$'000 R$'000 R$'000 R$'000 R$'000 R$'000
31 March 2006
Balance at 1 January 2006 18,894 152,590 52,773 4,345 15,393 243,995 3,073 247,068
Gains on available for - - - 169 - 169 - 169
sale investment
Currency translation - - - - 2,101 2,101 458 2,559
adjustment
Profit for the year - 17,864 - - - 17,864 (106) 17,758
Total income and expenses - 17,864 - 169 2,101 20,134 352 20,485
for the period
Increase in minority - - - - - - 3,311 3,311
interest
Transfer to capital - (1,708) 1,708 - - - - -
reserves
Translation adjustment to (1,358) (10,971) (3,795) (313) (1,108) (17,545) (221) (17,766)
Real
Balance at 31 March 2006 17,536 157,775 50,686 4,201 16,386 246,584 6,515 253,099
For the three months ended
31 March 2007
Balance at 1 January 2007 17,258 208,598 52,546 5,091 18,329 301,822 8,189 310,011
Gains on available for - - - 470 - 470 - 470
sale investment
Currency translation - - - - 5,073 5,073 57 5,130
adjustment
Profit for the year - 23,887 - - - 23,887 673 24,560
Total income and expenses - 23,887 - 470 5,073 29,430 730 30,160
for the period
Translation adjustment to (708) (8,547) (2,153) (209) (751) (12,367) (336) (12,703)
Real
Balance at 31 March 2007 16,550 223,938 50,393 5,352 22,651 318,884 8,583 327,467
Wilson Sons Limited
Consolidated Cash Flow Statement
for the three months ended 31 March 2007 and 31 March 2006
31/03/07 31/03/06 31/03/07 31/03/06
US$'000 US$'000 R$'000 R$'000
Unaudited Unaudited Unaudited Unaudited
Net cash inflow from operating 1,023 10,178 2,098 22,111
activities
Investing Activities
Interest received 1,509 1,736 3,094 3,771
Proceeds on disposal of property, plant 1,481 356 3,037 773
and equipment
Purchases of property, plant and (10,973) (7,549) (22,499) (16,399)
equipment
Net cash inflow arising from - 1,723 - 3,743
acquisition of subsidiary
Net cash used in investing activities (7,983) (3,734) (16,368) (8,112)
Financing Activities
Repayments of borrowings (5,610) (5,291) (11,503) (11,494)
Repayments of obligations under finance (182) (917) (373) (1,992)
leases
New bank loans raised 5,955 356 12,210 773
Increase in bank overdrafts 271 640 556 1,390
Net cash used in financing activities 434 (5,212) 890 (11,323)
Net (decrease)/increase in cash and (6,526) 1,232 (13,381) 2,676
cash equivalents
Cash and cash equivalents at beginning 54,597 43,152 116,729 101,006
of period
Effect of foreign exchange rate changes 1,620 1,717 3,322 3,730
Translation adjustment to Real - - (4,784) (7,263)
Cash and cash equivalents at end of 49,691 46,101 101,886 100,150
period
WILSON SONS LIMITED AND SUBSIDIARIES
NOTES FOR THE CONSOLIDATED ACCOUNTS FOR THE PERIODS
ENDED MARCH 31, 2007, 2006 AND DECEMBER 31, 2006
(In thousands, excepted where mentioned)
1. GENERAL INFORMATION
Wilson Sons Limited (the 'Group') is a Company incorporated in Bermuda under the
Companies Act 1981. The address of the register office is Clarendon House, 2
Church Street, Hamilton, HM11, Bermuda. The Group is one of the largest
providers of integrated port and maritime logistics and supply chain solutions.
Throughout our 170 years in the Brazilian market, we have developed an extensive
national network and provided a variety of services related to international
trade, particularly in the port and maritime sectors. Our principal activities
are divided into the following segments: operation of port terminals, towage
services, logistics, shipping assistance and support to offshore oil and natural
gas platforms.
These financial statements are presented in US Dollars because that is the
currency of the primary economic environment in which the Group operates.
2. ACCOUNTING POLICIES
In the process of applying the Group's accounting policies, management has made
the following judgments that have the most significant effect on the amounts
recognized in the financial statements. The accounting policies were presented
on 26th of April 2007, in the Final Prospect of the Public Offering of Primary
and Secondary Distribution of Representative Certificate of deposit of shares of
Common shares of Action of Wilson Sons Limited.
Convenience translation
The financial statements originally prepared in US Dollars, were also translated
to Reais. For ends of this translation, it has been used the exchange rates
(PTAX), at the closing dates of the consolidated financial statements, published
by the Brazilian Central Bank. In 31 March 2007, 31 December 2006 and 31 March
2006, the applied exchange rates were R$2.0504, R$2.1380 and R$2.1724,
respectively. The difference between the applied exchanges rates, in each one of
the closing dates, generates impacts of translation in the beginning balances of
the movements presented in the financial statements of the subsequent year end.
The effect of this difference was disclosed in movements demonstrated in the
financial statements and respective notes and was called 'Translation adjustment
to Real'. It is important to notice that this translation was carried out with
the only objective to provide to the user of the financial statements a view of
the numbers in the local currency of the country where the Group carries through
its operations.
3. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the Group is currently organized into six operating
activities; Towage, port terminals, ship agency, offshore, logistics and non
segmented activities. These divisions are the basis on which the Group reports
its primary segment information.
Segment information relating to these businesses is presented below.
Non
Port Ship segmented
Towage terminals agency Offshore Logistics activities Elimination Consolidated
March 31, 2007 US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
(Unaudited)
Revenue 29,286 30,001 4,550 1,815 14,780 2,172
Intersegment sales - - - - - 11,552 (11,552) -
29,286 30,001 4,550 1,815 14,780 13,724 (11,552) 82,604
Results
Operating profit 8,340 8,071 1,428 424 984 (4,237) 15,010
Investment income - - - - - 3,129 3,129
Finance costs (476) (267) - (196) (42) (420) - (1,401)
Profit before tax 7,864 7,804 1,428 228 942 (1,528) 16,738
Income tax - - - - - (4,760) (4,760)
Profit for the 7,864 7,804 1,428 228 942 (6,288) 11,978
quarterly
Other information
Capital expenditures (2,395) (4,848) (66) (5,438) (48) (231) (13,026)
Depreciation and (1,989) (1,406) (150) (396) (116) (102) (4,159)
amortization
March 31, 2006
(Unaudited)
Revenue 25,738 26,288 4,326 2,828 10,814 7,166
Intersegment sales - - - - - 4,979 (4,979) -
25,738 26,288 4,326 2,828 10,814 12,145 (4,979) 77,160
Results
Operating profit 7,591 5,877 1,172 168 775 (2,080) 13,503
Investment income - - - - - 3,453 3,453
Loss on disposal of - - - - - (2,822) (2,822)
investments
Finance costs (576) (322) - (238) (50) (458) - (1,644)
Profit before tax 7,015 5,555 1,172 (70) 725 (1,907) 12,490
Income tax (4,316) (4,316)
Profit for the 7,015 5,555 1,172 (70) 725 (6,223) 8,174
quarterly
Other information
Capital expenditures (1,468) (4,291) (108) (1,546) (75) (99) (7,587)
Depreciation and (2,109) (1,528) (139) (396) (123) (128) (4,423)
amortization
Non
Port Ship segmented
Towage terminals agency Offshore Logistics activities Elimination Consolidated
March 31, 2007 US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
(Unaudited)
Balance Sheet
Assets
Segment assets
Unallocated 100,394 140,486 6,020 48,252 9,130 42,065 - 346,347
corporate assets
Liabilities
Segment liabilities (54,686) (46,797) (5,325) (53,709) (3,504) (22,617) - (186,638)
December 31, 2006
Balance Sheet
Assets
Segment assets
Unallocated 103,133 132,893 8,158 43,063 11,173 28,465 - 326,885
corporate assets
Liabilities
Segment liabilities (63,886) (46,268) (7,434) (42,039) (3,548) (18,710) - (181,885)
Non
Port Ship segmented
Towage terminals agency Offshore Logistics activities Elimination Consolidated
March 31, 2007 US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
(Unaudited)
Revenue 60,049 61,514 9,329 3,721 30,305 4,453
Intersegment sales - - - - - 23,686 (23,686) -
60,049 61,514 9,329 3,721 30,305 28,139 (23,686) 169,371
Results
Operating profit 17,101 16,550 2,928 869 2,017 (8,688) 30,777
Investment income - - - - - 6,416 6,416
Finance costs (976) (548) - (402) (86) (861) - (2,873)
Profit before tax 16,125 16,002 2,928 467 1,931 (3,133) 34,320
Income tax - - - - - (9,760) (9,760)
Profit for the 16,125 16,002 2,928 467 1,931 (12,893) 24,560
quarterly
Other information
Capital expenditures (4,911) (9,940) (135) (11,150) (98) (474) - (26,708)
Depreciation and (4,078) (2,883) (308) (812) (238) (208) - (8,527)
amortization
March 31, 2006
(Unaudited)
Revenue 55,913 57,108 9,398 6,144 23,492 15,568
Intersegment sales - - - - - 10,816 (10,816) -
55,913 57,108 9,398 6,144 23,492 26,384 (10,816) 167,622
Results
Operating profit 16,491 12,767 2,546 365 1,684 (4,519) 29,334
Investment income - - - - - 7,501 7,501
Loss on disposal of - - - - - (6,131) (6,131)
investments
Finance costs (1,252) (699) - (517) (109) (994) - (3,571)
Profit before tax 15,239 12,068 2,546 (152) 1,575 (4,143) 27,133
Income tax - - - - - (9,376) (9,376)
Profit for the 15,239 12,068 2,546 (152) 1,575 (13,519) 17,757
quarterly
Other information
Capital expenditures (3,189) (9,322) (235) (3,359) (163) (215) (16,483)
Depreciation and (4,582) (3,319) (302) (860) (267) (278) (9,609)
amortization
Non
Port Ship segmented
March 31, 2007 Towage terminals agency Offshore Logistics activities Elimination Consolidated
(Unaudited)
Balance Sheet
Assets
Segment assets 205,849 288,052 12,343 98,936 18,720 86,250 - 710,150
Unallocated
corporate assets
Liabilities
Segment liabilities (112,128) (95,953) (10,918) (110,125) (7,185) (46,374) - (382,683)
December 31, 2006
Balance Sheet
Assets
Segment assets 220,499 284,125 17,442 92,069 23,888 60,857 - 698,880
Unallocated
corporate assets
Liabilities
Segment liabilities (136,588) (98,921) (15,894) (89,879) (7,586) (40,001) - (388,869)
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.
Investment income arising on bank balances held in Brazilian operating segments,
including foreign exchange on cash, has not been allocated to the business
segment as cash management is performed centrally by the corporate function.
Profit on acquisition of Brasco has been recognized in the Port Terminal Segment
in the first quarter of 2006.
4. PERSONNEL EXPENSES (UNAUDITED)
The expenses with staff of the Group increased 15.5%, from US$18.7 million in
first quarter 2006 to US$21.5 million in first quarter 2007. The reasons of this
increase were: (i) increase in the number of employees, mainly in the segments
of Logistic (New operations) and Port Terminals and (ii) increases relative to
the collective agreements.
5. LOSS ON DISPOSAL OF INVESTMENT (UNAUDITED)
Mar 31, Mar 31, Mar 31, Mar 31,
2007 2006 2007 2006
US$000 US$000 R$000 R$000
Loss on disposal of - (2,822) - (6,131)
investments
Loss on disposal of investment is the write-down in 2006 of the Debtor balance
due from Ocean Wilsons Investments Limited to Wilson Sons Limited. The Debtor
balance arose from funds transferred to Ocean Wilsons Investments Limited in
2004 for inclusion in the Trading investment portfolio of that company.
6. INVESTMENT INCOME AND FINANCE COSTS (UNAUDITED)
Mar 31, Mar 31, Mar 31, Mar 31,
2007 2006 2007 2006
US$000 US$000 R$000 R$000
Interest on bank loans and 1,509 1,736 3,094 3,771
overdrafts
Exchange gain on foreign 1,620 1,717 3,322 3,730
currency
borrowings
3,129 3,453 6,416 7,501
Interest on bank loans and (1,249) (1,601) (2,561) (3,478)
overdrafts
Exchange gain on loans 323 339 662 736
Interest on obligations (78) (130) (160) (282)
under finance
leases
Total borrowing costs (1,004) (1,392) (2,059) (3,024)
Derivative costs (397) (252) (814) (547)
(1,401) (1,644) (2,873) (3,571)
Despite the increase of 10% in the average balance of first quarter 2007 against
the same period of 2006, the financial gains had a downturn of 9.4%, decreasing
from US$3.5 million in first quarter 2006 to USS3.1 million in the first quarter
2007, as a result of a reduction of 16.9% in the basic tax of interest (CDI) in
first quarter 2006, achieving 12.7% in the first quarter 2007.
The financial expenditures decreased 14.8%, caused by the variation of debt
balance of each period. The debt grew in the first quarter 2007 versus the first
quarter 2006. Nevertheless, this raise had not impacted the financial
expenditures, due to the reduction by of the weighted average interest rate of
the financing and loans 7% and 38%, respectively.
7. INCOME TAX AND SOCIAL CONTRIBUTION (UNAUDITED)
+-------------------------------+----------+-----------+----------+-----------+
| | Mar 31, | Mar 31, | Mar 31, | Mar 31, |
| | 2007 | 2006 | 2007 | 2006 |
+-------------------------------+----------+-----------+----------+-----------+
| | US$000 | US$000 | R$000 | R$000 |
+-------------------------------+----------+-----------+----------+-----------+
|Current tax | | | | |
+-------------------------------+----------+-----------+----------+-----------+
|Income tax and Social |(6,042) |(6,293) |(12,389) |(13,671) |
|contribution | | | | |
+-------------------------------+----------+-----------+----------+-----------+
|Deferred tax | | | | |
+-------------------------------+----------+-----------+----------+-----------+
|Income tax and Social |1,282 |1,977 |2,629 |4,295 |
|contribution | | | | |
+-------------------------------+----------+-----------+----------+-----------+
|Total income tax and Social |(4,760) |(4,316) |(9,760) |(9,376) |
|contribution | | | | |
+-------------------------------+----------+-----------+----------+-----------+
Brazilian corporation tax is calculated at 25 percent (2006: 25 percent) of the
taxable profit for the year.
Brazilian social contribution tax is calculated at 9 percent (2006: 9 percent)
of the taxable profit for the year.
The charge for the year can be reconciled to the profit per the income statement
as follows:
Mar 31, Mar 31, Mar 31, Mar 31,
2007 2006 2007 2006
US$000 US$000 R$000 R$000
Profit before tax 16,738 12,490 34,320 27,133
Tax at the standard Brazilian 5,690 4,247 11,669 9,225
tax rate of 34%
Tax effect of expenses/income (930) 126 (1,909) 274
that are not
included in determining taxable
profit
Tax effect of utilization of tax - (57) - (123)
losses not
previously recognized
Income tax expense 4,760 4,316 9,760 9,376
Effective rate for the year 28% 34% 28% 34%
The Group earns its profits primarily in Brazil. Therefore the tax rate used for
tax on profit on ordinary activities is the standard rate in Brazil of 34%,
consisting of corporation tax, 25% and social contribution 9%.
8. EARNINGS PER SHARE (UNAUDITED)
The calculation of the basic profit diluted by action is based on the following
data:
Mar 31, Mar 31, Mar 31, Mar 31,
2007 2006 2007 2006
Earnings US$000 US$000 R$000 R$000
Earnings for the purposes of 11,978 8,174 24,560 17,757
basic earning per
share being net profit
attributable to equity
holders of the parent
Number of shares
Weighted average number of 25,227,067 5,012,000 25,227,067 5,012,000
ordinary shares for
the purposes of basic earnings
per share.
On 27 of February 2007 the Company increased the number of share to 60,144,000
(5,012,000 on 31 of December 2006). As result of this increase, the earnings per
share decreased from US$1.63 (R$3.54) on 31 of March 2006 to US$0.47 (R$0.97) on
31 of March 2007.
9. PROPERTY, PLANT AND EQUIPMENT
Mar 31,2007 Dec 31,2006
Cost Depreciation Net Cost Depreciation Net
accumulated Value accumulated Value
US$000 US$000 US$000 US$000 US$000 US$000
(Unaudited)
Land and buildings 45,958 (10,202) 35,756 42,982 (9,492) 33,490
Floating craft 120,686 (55,689) 64,997 126,359 (58,065) 68,294
Vehicles, plant and 89,734 (31,796) 57,938 86,742 (30,068) 56,674
equipment
Assets under 24,110 - 24,110 17,327 - 17,327
construction
Total 280,488 (97,687) 182,801 273,410 (97,625) 175,785
Mar 31,2007 Dec 31,2006
Cost Depreciation Net Cost Depreciation Net
accumulated accumulated
Value Value
R$000 R$000 R$000 R$000 R$000 R$000
(Unaudited)
Land and buildings 94,232 (20,918) 73,314 91,895 (20,294) 71,601
Floating Craft 247,455 (114,185) 133,270 270,156 (124,143) 146,013
Vehicles, plant and 183,991 (65,195) 118,796 185,454 (64,285) 121,169
equipment
Assets under 49,435 - 49,435 37,045 - 37,045
construction
Total 575,113 (200,298) 374,815 584,550 (208,722) 375,828
Assets under construction:
The increase in assets under construction was a consequence of the construction
of new boats (PSV - Platform supplier vessels) in the shipyard of the group in
the first quarter of 2007.
Guarantees:
Land and buildings with a book value of US$306 (R$628) - unaudited (2006: US$294
(R$629)) and tugs with a value of US$3,465 (R$7,104) (2006: US$3,500 (R$7,484));
have been given in guarantee of various legal processes.
The Group has pledged assets having a carrying amount of approximately US$39.2
million (R$80.4 million) - unaudited (2006: US$40.6 million (R$86.8 million));
to secure loans granted to the Group.
10. SUBSIDIARIES
Proportion Method used
Place of of to account
incorporation ownership for
and operation interest investment
Wilson Sons de Administracao e Comercio Brazil 100% Consolidation
Ltda.
Holding company
Saveiros Camuyrano Servicos Maritimos Ltda. Brazil 100% Consolidation
Tug operators
Wilson, Sons S.A., Comercio, Industria, e Brazil 100% Consolidation
Agencia de
Navegacao Ltda.
Shipbuilders
Wilson Sons Agencia Maritima Ltda. Brazil 100% Consolidation
Ship Agents
Sobrare-Servemar Ltda. Brazil 100% Consolidation
Tug operator
Wilport Operadores Portuarios Ltda. Brazil 100% Consolidation
Stevedoring
Companhia de Navegacao das Lagoas Ltda. Brazil 100% Consolidation
Tug operator
Companhia de Navegacao das Lagoas Norte Brazil 100% Consolidation
Ltda.
Tug operator
Wilson, Sons Logistica Ltda Brazil 100% Consolidation
Logistics
Wilson, Sons Terminais de Cargas Ltda. Brazil 100% Consolidation
Transport services
Eadi Santo Andre Terminal de Carga Ltda. Brazil 100% Consolidation
Bonded warehousing
Vis Limited Guernsey 100% Consolidation
Holding company
Tecon Rio Grande S.A. Brazil 100% Consolidation
Port terminal
Tecon Salvador S.A. Brazil 90% Consolidation
Port terminal
Brasco Logistica Offshore Ltda. Brazil 75% Consolidation
Port operator
Brasco Logistica Offshore Ltda. was proportionally consolidated as a joint
venture until it was acquired as a subsidiary in March 2006 (see note 18).
11. JOINT VENTURES
The following amounts are included in the Groups' financial statements as a
result of proportionate consolidation of joint ventures.
Mar 31,2007 Dec Mar 31,2007 Dec
31,2006 31,2006
US$000 US$000 R$000 R$000
(Unaudited) (Unaudited)
Current assets 4,438 7,054 9,100 16,511
Non-current assets 5,757 6,757 11,804 15,816
Current liabilities (5,335) (10,471) (10,939) (24,509)
Non-current liabilities (1,519) (1,912) (3,115) (4,475)
Mar 31,2007 Mar Mar 31,2007 Mar
31,2006 31,2006
US$000 US$000 R$000 R$000
(Unaudited) (Unaudited)
Income 6,071 8,355 12,448 18,150
Expenses (4,912) (6,151) (10,072) (13,362)
The Group has the following significant interests in joint ventures
Place of Proportion Method used
incorporation of to account
ownership
and operation interest for
investment
Consorcio de Rebocadores Baia de Sao Brazil 50% Proportional
Marcos
Tug operator consolidation
Allink Transportes Internacionais Brazil 50% Proportional
Limitada
Non-vessel operating common carrier consolidation
Consorcio de Rebocadores Barra de Brazil 50% Proportional
Coqueiros
Tug operator consolidation
Dragaport Limitada Brazil 33% Proportional
Dredge operator consolidation
Dragaport Engenharia Brazil 33% Proportional
Dredge operator consolidation
On April 7, 2006 the Group disposed of its 50% of shareholding in WR Operadores
Portuarios, a stevedoring and port operator.
12. TRADE AND OTHER RECEIVABLES
Mar 31,2007 Dec Mar 31,2007 Dec
31,2006 31,2006
US$000 US$000 R$000 R$000
(Unaudited) (Unaudited)
Amount receivable for the sale 26,727 28,614 54,801 61,177
of services
Amounts owed by joint ventures - 59 - 126
and
associates
Taxation recoverable 600 1,304 1,230 2,788
Prepayments and accrued income 32,161 23,768 65,943 50,816
Provision for doubtful (995) (933) (2,040) (1,995)
receivables
58,493 52,812 119,934 112,912
The Group considers that the carrying amount of trade and other receivables
approximates their fair value.
Credit Risk
The Group's principal financial assets are bank balances and cash, trade and
other receivables.
The Group's credit risk is primarily attributable to its bank balances and trade
receivables.
The amounts presented as receivables in the balance sheet are net of allowances
for doubtful receivables. An allowance for impairment is made where there is an
identified loss event which, based on previous experience, is evidence of a
reduction in the recoverability of the cash flows.
The Group has no significant concentration of credit risk, with exposure spread
over a large number of customers.
13. BANK OVERDRAFTS AND LOANS
Mar 31,2007 Dec Mar 31,2007 Dec
31,2006 31,2006
US$000 US$000 R$000 R$000
(Unaudited) (Unaudited)
Bank overdrafts (1,080) (809) (2,214) (1,730)
Bank loans (109,934) (109,352) (225,410) (233,794)
(111,014) 110,161 227,624 235,524
The borrowings are repayable as
follows:
Within one year (15,526) (14,945) (31,835) (31,952)
In the second year (14,289) (14,216) (29,298) (30,394)
In the third to fifth years (29,771) (32,170) (61,043) (68,779)
inclusive
After five years (51,428) (48,830) (105,448) (104,399)
(111,014) (110,161) (227,624) (235,524)
Total current (15,526) (14,945) (31,835) (31,952)
Total non current (95,488) (95,216) (195,789) (203,572)
Analysis of borrowings by currency:
$Real $Real
linked linked to
to
$ Real US US Total $ Real US US Total
Dollars Dollars Dollars Dollars
US$000 US$000 US$000 US$000 R$000 R$000 R$000 R$000
March 31th, 2007
(unaudited)
Bank overdrafts (1,080) - - (1,080) (2,214) - - (2,214)
Bank loans - (83,564) (26,370) (109,934) - (171,341) (54,069) (225,410)
Total (1,080) (83,564) (26,370) (111,014) (2,214) (171,341) (54,069) (227,624)
December 31 th ,
2006
Bank overdrafts 809 - - 809 1,730 - - 1,730
Bank loans - 78,417 30,935 109,352 - 167,656 66,139 233,794
Total 809 78,417 30,935 110,161 1,730 167,656 66,139 235,524
The weighted average interest rates paid were as follows:
1st Quarter Year ended
2007 2006
(Unaudited)
Bank overdrafts 14.9% 15.1%
Bank loans 5.1% 5.4%
In the first quarter 2007 the Group arranged new loans with BNDES for financing
the construction of three new boats (platform supplier vessels) in the amount of
US$5,955 (unaudited). In the same period there were interest and principal
amortizations of loan contracts already settled.
The other principal features of the Group's borrowings are as follows:
$Real denominated loans linked to the US dollar are monetarily corrected by the
movement in the US dollar/$Real exchange rate and bear interest of between 1.5%
and 6.0% per annum. These loans are to finance the building of new tugs,
platform supply vessels and refurbishment of dredges and are secured by
mortgages thereon. The amounts outstanding at 31 March 2007 are repayable over
periods varying up to 18 years.
US dollar denominated loans bear interest at between six month LIBOR plus 3.5%
per annum and six month LIBOR plus 4.15%. The majority of these loans are
project finance to fund the expansion of the container terminal at Tecon Rio
Grande and have no recourse to other companies in the Group. The amounts
outstanding at 31 March 2007 are repayable over periods varying up to 8 years.
14. DERIVATIVE FINANCIAL INSTRUMENTS
Operations of forward and currency swaps
The Group uses forward and currency swaps to fix its $Real cashflows associated
with repayments and servicing on the short term portion of its US$ and US$
linked loans.
To that end the Group entered into US$: $Real swaps with a nominal value of
US$3,832 (R$8,435) - unaudited (2006: US$2,038 (R$4,293)).
The fair value of swaps entered into as at 31 March 2007 was US$562 (R$1,152) -
unaudited (2006: US$782 (R$1,673)) and have been classified as derivative
liabilities in the balance sheet. US$397 (R$814) - unaudited (2006: US$252
(R$547)) has been recognized within finance costs in relation to losses on swaps
closed out during the period and the movement on swaps open as at the 31 March
2007.
15. TRADE AND OTHER PAYABLES
Group
Mar 31,2007 Dec Mar 31,2007 Dec
31,2006 31,2006
US$000 US$000 R$000 R$000
(Unaudited) (Unaudited)
Trade Creditors (46,627) (46,508) (95,604) (99,434)
Accruals and other payables (7,846) (5,997) (16,087) (12,822)
(54,473) (52,505) (111,691) (112,256)
The Group has financial risk management policies in place to ensure that
payables are paid within the credit timeframe.
The Group considers that the carrying amount of trade payables approximates
their fair value.
16. CONTINGENT LIABILITIES
The legal situation of the Group includes labour, civil, and tax processes. The
Administration, based on the opinion of its legal assessors, understands that
legal procedures in each situation are enough to preserve the equity of the
group, excluding the need of recognizing provisions in addition to those entered
on 31 of March 2007 in the amount of US$5,446 (R$11,166) - unaudited (US$5,913
(R$12,640) on 31 of December 2006). Additionally, it did not have substantial
changes in the legal situation of the group against those presented in the
consolidated financial statements presented on 31 of December 2006 and in the
final Prospect of it Public Offering of Primary and Secondary Distribution of
the Representative Certificates of Deposit of Shares of Common Shares of Wilson
Sons Limited, both presented on 26 of April 2007.
17. SHARE CAPITAL
Mar 31, Dec 31, Mar 31, Dec 31,
2007 2006 2007 2006
US$000 US$000 R$000 R$000
(Unaudited) (Unaudited)
Issued and fully paid
60.144.000 ordinary shares of 8 8,072 8,072 16,550 17,258
1/3p each
In February 2007 the Group performed a twelve for one share split increasing the
number of shares from 5,012,000 of £1 each to 60,144,000 of 8 1/3p each
(unaudited).
18. ACQUISITION AND DISPOSAL OF SUBSIDIARY
Acquisition of subsidiary
In March 2006 the Group acquired the remaining 60% shareholding in onshore base
manager and logistics business Brasco Logistica Offshore Ltda. for cash
consideration of US$1.2 million (R$2.6 million), which had previously been
accounted for using proportionate consolidation. Immediately following this
acquisition the Group sold a 25% interest in this company for US$0.5 million
(R$1.1 million). The surplus on acquisition of US$1.4 million (R$3.1 million)
was recognized in the income statement.
19. NOTES TO THE CASH FLOW STATEMENT (UNAUDITED)
Mar 31, Dec 31, Mar 31, Dec 31,
2007 2006 2007 2006
US$000 US$000 R$000 R$000
Operating profit from operations 15,010 13,503 30,777 29,334
Loss on disposal of investments
Adjustments for:
Depreciation of property, plant 4,092 4,363 8,390 9,478
and equipment
Amortisation of intangible assets 67 60 137 130
Gain on disposal of property, 587 (123) 1,204 (267)
plant and equipment
Net cash inflow/(outflow) arising - (1,433) - (3,113)
from acquisition
of subsidiary
Increase (decrease) in provisions (467) 423 (958) 919
Operating cash flows before
movements in working
capital 19,289 16,793 39,550 36,481
Increase in inventories (5,851) (1,635) (11,997) (3,552)
Increase in receivables (6,385) (1,796) (13,092) (3,902)
Increase in payables 1,968 5,733 4,035 12,454
Decrease (increase) in other (916) (2,149) (1,878) (4,668)
non-current assets
Cash generated by operations 8,105 16,946 16,618 36,813
Income taxes paid (5,920) (5,463) (12,137) (11,867)
Interest paid (1,162) (1,305) (2,383) (2,835)
Net cash from operating activities 1,023 10,178 2,098 22,111
20. SUBSEQUENT EVENTS
In April 2007, Wilson Sons Limited has issued for a public offering 11,000,000
Brazilian Depositary Receipts, each representing one common share.
The initial offering price was US$11.74 per share (R$23.77 per BDR) and the
estimated gross value generated by the BDRs issued and sold by Wilson Sons
Limited aggregate US$129.1 million (R$261.5 million).
After underwriter's fees, expenses, CBLC costs (Companhia Brasileira de
Liquidacao e Custodia) and Income Tax Expenses, the net proceeds received by the
Company was around US$122.3 million (R$248.8 million).
Accordingly, the estimated IPO cost is US$6.3 million (R$12.7 million).
On April 9, 2007, the Board of Directors of our majority Shareholder approved a
stock option plan (the 'Long-Term Incentive Scheme'), which allows for the grant
of 'phantom options' to eligible employees to be selected by the Board, over the
next five years. The option will provide cash payments, based on (a) the number
of options multiplied by (b) the difference between the Basic Value and the
value on the date of exercising the options. The Basic Price will be determined
on the basis of the three most recent market quotations of our BDRs at Bovespa
(market value), as long as, during the first four weeks after the approval of
the Plan, the Basis Price will be the price of BDR in the offering. The Exercise
Price will be the market price on the exercise date. The plan is regulated by
the Bermuda's laws.
21. SUMMARY OF DIFFERENCES BETWEEN INTERNATIONAL FINANCIAL REPORTING STANDARDS
('IFRS') AND ACCOUNTING PRACTICES ADOPTED IN BRASIL ('BR GAAP')
The consolidated financial reports were prepared according to International
Financial Reporting Standards ('IFRS'), which differ significantly from
accounting practices adopted in Brazil:
a. Reconciliation of differences between total equity according to IFRS
and BR GAAP
Mar 31, Dec 31,
2007 2006
R$000 R$000
(Unaudited)
Total Equity in IFRS 327,467 310,011
Differences between accounting practices:
Reversal of gain on negative goodwill (4,475) (4,475)
(discount)
Accumulated amortisation of goodwill (2,304) (1,615)
Goodwill provision by reverse incorporation (14,062) (15,205)
Financial lease:
Fixed assets:
Costs (22,322) (21,067)
Accumulated depreciation 9,481 7,944
Financial leasing obligation 3,004 3,642
Capitalized interest - cost:
Cost 24,254 24,655
Accumulated amortization (6,674) (5,873)
Conversion effects 104,892 84,372
Other materials (931) (424)
Deferred income tax and social contribution (36,975) (30,546)
Total Equity in BR GAAP 381,355 351,419
b. Reconciliation of differences in net profit (loss) between IFRS e BR GAAP
Mar 31, Mar 31, 2006
2007
R$000 R$000
(Unaudited) (Unaudited)
Net profit in IFRS 25,256 17,962
Differences between accounting practices:
Goodwill amortization (461) -
Financial lease (356) (1,233)
Capitalised interest (1,202) (3,707)
Pre-operational expenses (507) (174)
Conversion and exchange rate variation effect (2,311) (1,360)
Other material effects 574 -
Deferred Income tax and social contribution (1,449) (2,201)
Net profit according to BR GAAP 19,544 9,287
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