Half Yearly Report

RNS Number : 4499X

Ocean Wilsons Holdings Ld

14 August 2009

 



Ocean Wilsons Holdings Limited

Preliminary Announcement

Chairman's Interim 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. The Group's activities include harbour and ocean towage, container terminal operation, offshore support services, logistics, small vessel construction and ship agency. The Group has over four thousand employees and operates in nearly thirty locations throughout Brazil.  

Ocean Wilsons Investments Limited is a wholly owned Bermuda investment company. The Company holds a portfolio of international investments. Hanseatic Asset Management LBG, a Guernsey registered and regulated investment group acts as investment manager.

Results  

Against the background of a global recession and slowing Brazilian economy, I am pleased to report another strong performance in the first half of 2009. Group revenue for the six months ended 30 June 2009 was 12% lower at US$219.0 million (2008 US$248.4 million) mainly due to weaker business volumes and a decrease in our shipbuilding business

Despite the fall in revenue, Group operating profit increased US$5.2 million to US$45.6 million (2008 US$ 40.4 million) due principally to the expansion of our offshore business, improved operating margins in towage, offshore and logistics as well as lower management costs. Offshore and towage operating margins benefitted from an increase in special towage operations and an increase in the number of offshore vessels operating in the premium priced spot market. Logistics margins grew due to an improved sales mix resulting from managements strategy to focus on higher margin business. Group margins were positively impacted by a lower average Real / US Dollar exchange rate in the period, as Real denominated costs were lower when translated into US Dollars. Raw material costs decreased from US$43.9 million to US$22.3 million reflecting the decrease in shipyard sales.

Investment revenues for the period rose by US$0.8 million to US$16.7 million (2008 US$ 15.9 million). Lower interest from bank deposits due to the fall in international interest rates was offset by increased exchange gains on cash and cash equivalents.

Other gains of US$16.7 million (2008 US$0.2 million loss) arise from the Group's portfolio of trading investments and reflect the increase in the fair value of trading investments held at period end and net losses on the disposal of trading investments. 

Finance costs for the period decreased US$ 0.3 million to US$ 3.7 million (2008: US$ 4.0 million). 

Group profit before tax increased US$23.3 million to US$75.4 million (2008: US$ 52.1 million) benefitting from the higher operating profit and investment portfolio gains.

The higher Profit before tax is reflected in improved earnings per share based on ordinary activities after taxation and minority interests of 109.3 cents (2008: 63.5 cents).

Wilson Sons Limited

At the close of business on the 12 August 2009, the Wilson Sons share price was Real 18.20 resulting in a market value for the Ocean Wilsons holding of 41,444,000 shares (58.25% of Wilson Sons) of approximately US$409.9 million which is the equivalent to US$11.59 per Ocean Wilsons Holdings Limited share. 

Exchange rates

In the six months to 30 June 2009, the Real appreciated 16% against the US Dollar from 2.33 at 1 January 2009 to 1.95 at the period end. The appreciation of the Real against the US Dollar generated a net exchange gain of US$ 11.4 million (US$6.5 million) on the Group's Real-denominated cash balances in the period although the average Real/US Dollar exchange rate in the period at 2.19 was 29% higher than the comparative period in 2008, 1.70. The higher average exchange rate had a beneficial affect on our Real denominated costs when translated into US Dollars.

Dividend

The Board has declared an interim dividend of 4.0 cents per share (2008: 4.0 cents per share) to be paid on 25 September 2009 to shareholders on the register at close of business on 28 August 2009. 

Depository interest facility

As previously informed in my letter of the 6 July 2009 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 has arranged 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.

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].

Cash flow and debt 

Net cash inflow from operating activities was up US$13.6 million to US$35.6 million compared with US$22.0 million in the same period last year benefitting from the higher operating profit in the period of US$ 45.6 million (2008: US$ 40.4 million) and lower outflows from working capital effects.

The Group's cash and cash equivalents decreased US$33.1 million at period end to US$172.2 million (31 December 2008: US$205.3 million) driven principally by higher capital expenditure. Capital expenditure in the period increased US$39.1 million to US$71.2 million (2008: US$32.1 million) with new equipment purchases for the port operations, continuation of the towage fleet renewal program and expansion of the offshore vessel fleet. 

Group borrowings increased US$2.8 million at 30 June 2009 to US$188.0 million with loan repayments of US$ 8.3 million slightly lower than new loans raised and overdrafts of US$ 9.5 million. 

Balance sheet 

Net assets at 30 June 2009 (excluding minority interests) increased US$35.5 million to US$ 460.1 million (31 December 2008: US$ 424.6 million) reflecting the strong profit performance and appreciation of the Real. This is the equivalent of US$ 13.01 per share (31 December 2008: US$ 12.01). At 30 June 2009 the investment portfolio including cash under management amounted to US$228.3 million. This is the equivalent of US$ 6.46 per share.

Wilson Sons Limited operating review

We have summarised the following highlights from the Wilson Sons 2nd quarter 2009 earnings results released on 14 August 2009. The full report is available on the Wilson Sons Limited website: www.wilsonsons.com:

Highlights

• Macro conditions -> Signs of resiliency in Brazil's economy and potential recovery in business volumes throughout 2009.  

• Business performance -> Wilson, Sons' results confirmed their long-term growth trend in the quarter and year-to-date:

  • Net revenues were 9.3% lower in 2Q09 and declined by 11.9% in 1H09, mainly from weaker business volumes;

  • On the positive side, volumes recovered in the port terminals business and improved in the offshore segment; 

  • Operating profit also ended higher, on a year-over-year basis;

  • Overall, 2Q09 and 1H09 consolidated results continued to grow, relative to the previous year.

• Key financials -> The Company's consolidated financials improved in the quarter and year-to-date 2009, despite lower volumes and negative net revenue growth in 2Q09 and 1H09.
  

• 
  Positive earnings growth -> 2Q09 was the third consecutive quarter in which the Company posted double-digit EBITDA growth, relative to the previous-year quarter. 2Q09 business highlights included the following: 

• Solid results in the Company's offshore business, linked to growing demand from oil & gas;

• Positive impact from volume recovery at port terminals, despite the continued market volatility in second quarter 2009; 

• Growth at Brasco, a terminal also linked to the oil & gas industry; The number of contracts more-than-doubled;

• Higher participation of special operations in the Company's towage net revenues; improved results from better daily rates.   

Management discussion and analysis

• Net Revenues declined from relatively weaker volumes, due to slow market recovery. The negative growth trend on the revenues side continued through Q2, albeit more modestly, partially affected by lower shipbuilding activities. Net revenue growth in offshore more-than-doubled.  

• Costs and Expenses: Raw material costs, personnel and other operating expenses declined in 2Q09, as well as in 1H09: 
  

• • Lower raw material costs derived mainly from relatively higher costs in 2Q08 associated with a concentration of PSV construction activities for third parties at the Company's shipyard, and from lower fuel costs in logistics and towage;

  • Savings in personnel expenses were mostly due to the positive net impact of exchange rate variation on costs linked to the Brazilian Real, as the value of the US Dollar ranged from the R$1.60 level in 2Q08, to the R$1.95 level in 2Q09; 

  • Decline in other operating expenses derived from lower freights and rentals in logistics and towage, given the current market conditions, which generally pressured business volumes.  

• EBITDA and Margins: EBITDA in the period at US$67.3 million (2008 US$52.6 million) was positively influenced by expanded presence in the offshore business, by the resilient volumes at port terminals and towage (despite the market volatility), by results in shipbuilding activities, and by the focus on value-added logistics operations.

• Operating Profit at US$52.4 million (2008 US$41.9 million) was also higher in the period. Positive growth in offshore and logistics results, as well as the net effect from cost-reduction initiatives at port terminals, combined, contributed the most to improved profitability in Q2 and year-to-date 2009.  

• Financial Results improved, especially on the financial revenues side, due in part to the net positive impact from exchange rate variation on Real-denominated cash investments.  

• Capex in the period at US$77.8 million was significantly higher, mostly given the ongoing investments in fleet expansion at towage and offshore. Capital expenditure increased in 1H09 as well, mainly in terms of new equipment for the port terminals and logistics businesses. 

• Debt Profile and Cash Position:

  • Debt Schedule: 91% of total debt is due in the long-term, while 97% is US Dollar-denominated;

  • Net Debt: The Company's (relatively de-leveraged) net debt position reached USD 36.6 million, from higher capital spending and USD 8.6 million in additional loans;

  • Cash holdings: As of June 2009, cash balance declined mainly as a result of new investments made and USD16 million paid in dividends to shareholders in May 2009, referring to the fiscal year ending in December 2008.

Port Terminals

• Volumes at the Company's Port Terminals recovered modestly in 2Q09, with a 4.3 % increase in container volumes to 416,413 TEU's in 1H09 relative to 1H08 although revenue declined 5.7% to US$78.0 million compared with 1H08. 

• Results in port terminals were resilient. By excluding the net effect from fiscal credits in 2Q08 (of USD 2.1 million), 2Q09 EBITDA was in line with the previous-year quarter. EBITDA at US$25.2 million was 11.3% lower than the comparative period in 2008. (2008 US$28.4 million). 

• Volume recovery at the Rio Grande and Salvador container terminals were confirmed, despite a relatively weaker product mix, from more empty containers handled, given the current global crisis. 

• Export volumes improved, especially for products such as apple, rice, petrochemical resins, and wood pulp. Warehousing-related activities declined in 2Q09, due to the impact from a stronger dollar on imports, but remained in line year-to-date.

• Brasco posted better results stemming from new contracts won in 2Q09, which more-than-doubled relative to 2Q08. 

Towage

• In Towage, the positive trend towards higher (double-digit) participation of special operations as a percentage of net revenues continued. This, combined with the ability to deliver higher volumes relative to 1Q09, played a significant role in mixed-to-positive results in 2Q09, amid high market volatility. Despite a fall in net revenue of 12.3% to US$67.5 million in the period operating profit increased 6.4% to US$26.1 million compared to 1H08 principally due to improved product mix.

• In addition to support to salvage and ocean towage operations, the Company broadened its portfolio of special services designed to the specialised terminals offshore support activities.

• Despite adverse local market conditions with respect to harbour towage volumes, generally larger and heavier ships of greater 'deadweight' calling Brazil's leading ports helped generate higher operating profit and EBITDA. 

• With respect to the Company's newbuildings, two tugboats, the Andromeda and Vega, were delivered by late second quarter 2009. 

Logistics

• In Logistics, Q2 and YTD 2009 results were positively impacted by warehousing-related activities and by the strategy to favour value-added operations, which are linked to both new and existing clients, and to reduce the number of low-margin operations, as alluded to in Q1 2009.

• Although net revenues declined from US$44.6 million in 1H08 to US$36.3 million in the period principally due to the FX impact from the weaker Real on Real denominated revenues when converted to US Dollars, results benefitted from new client business, value-added profile of cargo, higher turnover at EADI Santo Andre (a dry port), broader scope of services, and also from cost reductions implemented.

• Operating profit improved 20% to US$2.6 million and EBITDA 51% to US$4.2 million. Although having only 20 operations under way (as opposed to 25 operations in 2Q08), logistics results improved in 2Q09, given higher-margin, in-house operations in place.  

• Positive overall performance in warehousing-related activities at EADI also yielded higher EBITDA margin in the period.  

Shipping Agency

• Shipping Agency results pointed lower, relative to 2008 levels. Although the number of vessel calls increased in Q2 2009, by 8.6%, the downward trend in terms of business volume growth continued, mainly from loss of a major client, which has been felt since 3Q08. 

• In order to protect its shipping agency margins in the long run, despite a difficult market environment, the Company has taken the necessary steps to raise productivity in its current business processes.  

Offshore

• The Offshore business delivered high-growth performance with revenue increasing 145% from US$7.6 million in 1H08 to US$18.5 million in 1H09 principally due to a larger fleet - with six PSVs - considering that two of them were allocated to operate at spot rates, under medium-term contracts. In early 2Q09, PSV Petrel, owned by Magallanes and chartered by Wilson, Sons, became fully operational. 

• Due to a higher number of days in operation and better daily rates from higher value-added services rendered, operating profit in the period was US$8.4 million compared with US$1.5 million in 1H08. EBITDA rose 243% to US$11.1 million in 1H09 from US$3.2 million in 1H08.  

• With respect to the intended joint venture to operate vessels alongside Magallanes to support oil & gas exploration and production activities, the Company continued to seek the necessary approvals and expects to reach final stages in the structuring of the joint venture by late 2009.  

Non-Segmented activities

• Wilson, Sons' Non-Segmented Activities allocates services provided by the shipyard to third parties and accounts for all costs incurred with management of the Company. 

• Improved results in Q2 2009 derived from construction activities carried out to third parties at the shipyard and from lowering management costs. 

Investment Portfolio

Hanseatic Asset Management LBG that manages the Groups investment portfolio reports at the period end as follows:

Market Background

'The first half of 2009 witnessed two contrasting quarters with equities continuing their declines for much of the first quarter before staging one of the strongest rallies seen in decades. At the end of the first half, almost all of the major share markets were in positive territory for 2009. *In US dollar terms, the MSCI World Index recorded a gain of 6.4% and the MSCI Emerging Market Index was up 36.2%.

The first quarter marked the sixth consecutive negative quarter for the majority of global share markets. A number of factors contributed to the significant losses in many markets over the period. Fourth quarter 2008 corporate earnings, reported in January and February, were generally weaker than expected with many companies forced to slash dividends to conserve cash. During the first quarter, problems of the financial sector remained in the spotlight with mounting losses and extremely poor results. Global economic activity continued to deteriorate with most economists revising their forecasts downward. The Obama administration's budget, which called for increased spending and a steadily growing deficit, was poorly received by financial markets. However, policy actions intensified throughout the quarter and included 'quantitative easing'. On 23rd March, the US Treasury announced a public-private investment programme to help remove toxic assets from bank balance sheets. This helped soothe market nerves and provided the backdrop for a powerful rally in risk assets.

Investor sentiment underwent a wholesale turnaround in the second quarter as investors anticipated that the severity of the worst economic downturn in many years was abating. The stock market rally was sparked by several indications that the slowdown in the real economy was decelerating and it seems probable that equities will not breach their March lows. In addition, better than expected earnings from many companies, most notably financials, and positive news on the results of 'stress-tests' for the major US banks provided some indication that the government policy responses and coordinated central bank interventions had made some progress and an 'Armageddon' scenario had been avoided.

In particular, there were dramatic increases in Emerging Market equities with gains of 75.2% in the CSI 300 Index of China 'A' shares, 63.1% in the Bovespa Index of Brazil, 56.2% in the RTS Index of Russia and 58.2% in the Sensex Index of India. In Europe, the FTSE 100 Index in the UK gained 12.7% with the CAC Index in France and the DAX Index in Germany narrowly up over the first half of 2009. Elsewhere in Developed Markets, the S&P 500 Index in the US was up 3.2% and the Topix Index in Japan was up 2.8%. Overall, smaller companies outperformed their larger counterparts.

In the currency markets, there was generally further weakness in the US dollar which declined by 16% against the Brazilian Real, 11.3% against Sterling and 0.4% against the Euro. Against the Yen, the dollar appreciated by 6.3%. In the fixed income markets, corporate bonds outperformed sovereign debt as investors took advantage of the extreme dislocations in credit markets. Government bond yields rose following a glut of new issuance. The ten-year bond yield for US treasuries rose during the first half from 2.2% to 3.5%.  Likewise, yields on ten-year Euro bonds reached 3.4% at the end of June, having started the year at 2.9%, as deflationary fears subsided.

In the commodity complex, energy prices soared with a barrel of West Texas Intermediate rising by a spectacular 77.9%, the copper price rose by 62.7% and an ounce of gold increased by 5.4%. Agricultural commodities were largely down over the period with fears of oversupply largely responsible for 15.8% and 10.5% declines in the futures prices of corn and wheat respectively. Furthermore, livestock prices, especially lean hogs, suffered from negative sentiment connected to the swine flu pandemic.

*Note:     All index performance numbers in US dollar terms.

Performance

On a time-weighted basis, the portfolio finished the first half up 9.2% in US dollar terms. This compares to a 6.4% increase in the MSCI World Index. The invested portfolio performed relatively well, increasing by 18.7% over the same period. Absolute returns were generated from the portfolio's exposure to all regions. At the individual security level, there was particularly strong relative performance from investments in the US, UK, Continental Europe and Japan. The Fund gained approximately 1.9% from its currency exposure as the US dollar weakened against most of the major currencies following three quarters of strength.

BlackRock World Mining Trust and Lansdowne UK Equity once again headed the list of contributors to overall performance.  Aberdeen Global - Asia Pacific, Neptune Russia and Oaktree Value Opportunities Fund were also strong contributors. The top ten contributors to the investment portfolio in the period were:

Holding	% Contribution
BlackRock World Mining Trust Plc	1.30
Lansdowne UK Equity Fund Ltd	1.02
Aberdeen Global - Asia Pacific	0.57
Neptune Russia & Greater Russia Fund	0.52
OCM Value Opportunities (Cayman) Fund Ltd	0.43
ARC Capital Holdings Ltd	0.39
SR Global - Emerging Markets Portfolio	0.38
BlackRock Agriculture Fund	0.36
Investec GSF SICAV - Global Energy Fund	0.35
VinaCapital Vietnam Opportunity Fund Ltd	0.34
Total	5.67

The top performing investments, in US dollar terms, were dominated by listed investments: ACP Capital (+219%), Ramco Energy (+115%), Ivanhoe Mines (+112%), IFR Capital (+106%) and VinaCapital Vietnam Opportunity Fund (+95%), many of which had felt the full force of the financial crisis in 2008. The best performers were concentrated in Emerging Markets and Natural Resources, which were at the vanguard of the recent rally. Approximately 27% of the portfolio was invested in Emerging Markets and the Far East excluding-Japan as at 30 June 2009.

Portfolio Activity

At the beginning of the year, the portfolio had cash (including liquidity funds) of $119.8m available for investment. At the end of June 2009, cash (including liquidity funds) of $109.1m represented 47.8% of total assets, equities represented 35.1% with 9.6% in alternative assets and 7.5% in fixed income. Over the first half of 2009, excluding movements in liquidity funds, there were purchases (including drawdowns on private equity commitments) of $21.9m and sales of $11.9m. Details of the transactions are as follows:

Purchases:

BlackRock UK Emerging Companies Hedge Fund is a long/short hedge fund, making investments in UK listed small and mid capitalisation equities. During the second quarter, the Fund re-opened temporarily to new investors, having been closed for most of its life.

A small investment, equalling 6% of the original holding, was made into the existing holding in Pacific Alliance China Land. The investment was in advance of the company tendering for 6% of its shares at stated net asset value, whilst the shares were trading on a significant discount.

Phaunos Timber Fund makes investments in global timberlands and timber related investments with a focus on Emerging Markets.  The company is quoted on the Main Market of the London Stock Exchange. Timber is differentiated from other commodities by its consistent biological growth and has traditionally offered a negative correlation to traditional asset classes, as well as a positive correlation to inflation.  The investment was made with the company trading on a circa 30% discount to stated net asset value.

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.

Switches:

BlueBay High Income Loan Fund is primarily invested in European senior secured leveraged loans issued by corporate borrowers.  There is no leverage at the Fund level. The investment was made from the proceeds of BlueBay European Credit Opportunity Fund, which is being wound up.  To date, 92% of the original holding has been switched. The residual holding will be switched in due course.

The holding in the Close Far East Equity Fund was redeemed and the proceeds were invested equally into the existing holdings in the Aberdeen Global Asia Pacific Fund and the Prusik Asia Fund. The switch reflected dissatisfaction with the new manager's performance since being appointed in June 2007.

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 huge rally in oil prices so far in 2009, the manager decided to consolidate the portfolio's long energy exposure into a hedged vehicle. The holdings in BP Plc, Investec Global Energy (long fund) and Royal Dutch Shell 'B' were switched into the Fund.

Sales:

The sale of Genesis Emerging Markets Fund at the end of the second quarter was a profit-taking decision following a strong rally in Emerging Markets.

The manager issued a redemption request in the fourth quarter of 2008 for the Lansdowne Macro Fund, the proceeds from which were received in March. This decision followed disappointment with the Fund's performance.

The sale of Summit Germany followed the acceptance of a €0.21 per share offer to take the company private by management.

Market Outlook

At the time of writing, it is encouraging to report that equities, in the face of ongoing headwinds, are continuing their advances from their March lows. The manager remains cautious on the sustainability of the recent rally and in spite of the welcomed respite for beleaguered investors, financial markets continue to face significant pressures. The recent speculative stock market rally, beginning at the end of March, was in reaction to the extraordinary level of government interventions, together with severely oversold financial markets (exemplified by a ten year return, as at the end of March 2009, on the MSCI World Index of approximately -20%) and 'positive surprise' data suggesting that the decline in the global economy was getting worse at a slower rate. In short, whilst the global recession may be bottoming, it is premature to talk of any meaningful recovery in the real economy.

Hard economic data does not, as yet, signal a return to an environment of growth with several indicators, including the extension of bank credit to businesses, pointing to ongoing anaemic growth for the global economy and the developed economies in particular. Outperformance of slashed earnings estimates is therefore of little cheer in the face of sluggish growth conditions. Unemployment is continuing to climb and in many cases, improved earnings owe much to one-off cost-cutting programmes and aggressive destocking of inventories. The de-leveraging of the US consumer could take many years to unwind as debt-ridden households and unprecedented wealth erosion in home equity values, estimated to be in excess of $5 trillion, provides a challenging backdrop for future consumption.

Looking ahead, investors face several uncertainties as they continue to navigate through uncharted territory. In the near term, it would not be surprising to see a return to rapidly changing sentiment expressed in volatile stock markets. In the medium term, the need to regularise the balance sheets of Western governments will cap the returns available on equities and is likely to create a trading range environment. It remains to be seen how quickly governments will phase out the emergency liquidity interventions, including near-zero interest rates. Ballooning government deficits without a corresponding increase in domestic savings will overshadow policy action for years to come. In this context, sovereign default remains a possibility and further major stimuli cannot be ruled out. Over the first half, deflation fears have moderated and discussion of longer-term inflation has returned to the agenda as the excess liquidity created by central banks must be mopped up in due course. In addition, a tighter regulatory environment and an enlarged state sector are likely to be two of the enduring legacies of the credit crunch.

It is noteworthy that a number of respected fund managers have stated that the recent stock market rally may well be the start of a sustainable bull market. The optimists point to valuations, which are a considerable margin off their highs with the MSCI World Index (as at 30th June 2009) 40% off its 31st October 2007 peak. Indeed, in spite of the recent rally, stock market levels are barely changed from the end of 2008. Cash balances are very high, with approximately $4 trillion estimated to be on the sidelines in US money market funds alone, and there are further government commitments yet to reach their targets. Furthermore, record low interest rates combined with ongoing 'quantitative-easing' programmes and low expectations on the macroeconomic and earnings outlook may well ensure that markets stubbornly continue their ascent well into the second half of 2009 and beyond.

Investments in Emerging Markets and commodities were the dominant themes in the first half of 2009. Across asset classes, Emerging Markets were a one-way bet as the most battered investments of 2008 were at the vanguard of the rally. Commodities, led by oil, also enjoyed a strong first half, benefitting from the pullback in the US dollar. Globalisation has ensured that there has been no hiding place from the global recession although not all regions have suffered equally. Given the dramatic recent rises in Emerging Markets, it would not be unexpected to see these countries' bourses pause for breath in the forthcoming months. However, the manager remains positive on the fundamental outlook for Emerging Markets, where more supportive domestic growth conditions, particularly in China, India and Brazil, and generally stronger government balance sheets see these countries firmly positioned as the engines of global growth for many years to come.

Overall, the manager remains cautious in its outlook for investment returns. Economic forecasting will remain hazardous for some time and the challenge of capital preservation whilst seeking to achieve a satisfactory return continues to be a delicate balance. Ocean Wilsons Investments Limited is well placed with ample cash (circa 47% of the portfolio as at 31 July 2009) at its disposal to exploit the opportunities offered up in the aftermath of the financial crisis.'

Going concern

The Group closely monitors and manages its liquidity risk. The Group has considerable financial resources including US$172.2 million in cash and cash equivalents and the Groups borrowings have a long maturity profile. The Groups business activities together with the factors likely to affect its future development and performance are set out in Chairman's statement, operating review and investment managers report. The financial position, cash flows and borrowings of the Group are also set out in the Chairman's statement. Details of the Group's borrowings are set out in note 15. 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 operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.

Responsibility statement

The Directors confirm that to the best of our knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34;

• the interim management report includes a fair review of the information required by DTR 4.2.7R; and

• the interim management report includes a fair review of the information required by DTR 4.2.8R

By order of the Board

Jose Francisco Gouvea Vieira

13 August 2009

  This report contains certain forward looking statements with respect of the financial condition and results of Ocean Wilsons Holdings Limited. These should be treated with caution due to the inherent uncertainties, including both economic and business risk factors. Nothing in this statement should be construed as a profit forecast.

Investment Portfolio Information as at 30 June 2009

PORTFOLIO STATEMENT	Market Value		Percentage of NAV
JPM USD Liquidity Fund	37,004,291		16.3
Goldman Sachs Funds Plc USD - Liquid Reserves Fund	36,177,325		16.0
Morgan Stanley Funds Plc US Dollar Liquidity Fund	34,377,871		15.2
Lansdowne UK Equity Fund Ltd	8,832,031		3.9
Investec Global Energy Long/Short Fund	5,900,000		2.6
BlackRock World Mining Trust Plc	5,789,433		2.6
OCM Value Opportunities (Cayman) Fund Ltd	5,492,081		2.4
RWC Global Convertibles Fund	5,029,518		2.2
BlackRock UK Emerging Companies Hedge Fund	4,976,678		2.1
Prusik Asia Fund Plc	4,632,036		2.0
Top 10 Investments	148,211,264		65.3
Ashmore Global Special Situations Fund IV, LP	4,371,542		1.9
Ashmore Local Currency Debt Portfolio	4,273,617		1.9
SR Global - Emerging Markets Portfolio	4,242,960		1.9
Aberdeen Global - Asia Pacific	3,961,415		1.8
BlackRock Agriculture Fund	3,890,922		1.7
JO Hambro Japan Fund	3,890,181		1.7
Orbis SICAV - Japan Equity	3,509,156		1.6
Findlay Park American Smaller Companies Fund	3,494,466		1.5
Jupiter European Opportunities Trust Plc	3,406,711		1.5
BlackRock Middle East & North Africa Opportunities Fund	3,270,404		1.4
Top 20 Investments	186,522,638		82.2
Finsbury Growth & Income Trust Plc	2,927,245		1.3
SR Global - Asia Portfolio	2,681,158		1.2
Neptune Russia & Greater Russia Fund	2,591,616		1.2
Harbinger Capital Partners Special Situations Offshore Fund, LP	2,290,647		1.0
Pacific Alliance China Land Ltd	2,249,850		1.0
BlueBay High Income Loan Fund	2,128,265		0.9
Jupiter Financial Opportunities Fund	1,799,619		0.8
EFG-Hermes MEDA Fund	1,690,742		0.8
ARC Capital Holdings Ltd	1,687,681		0.7
Aberforth Smaller Companies Trust Plc	1,610,294		0.7
Top 30 Investments	208,179,755		91.8
Other Investments (28)	18,628,063		8.2
	226,807,818		100.0

The top ten contributors to the investment portfolio were:

Holding	% Contribution
BlackRock World Mining Trust	0.68
Lansdowne UK Equity Fund	0.53
Investec Global Strategy Fund Ltd	0.47
Harbinger Capital Partners Special Situations	0.47
Goldmans Sachs plc USD liquid reserves fund	0.27
Morgan Stanley Funds plc USD liquidity fund	0.26
Lehman Brothers Liquidity Fund plc USD	0.23
Lansdowne European Equity Fund	0.16
Gazsprom ADR	0.16
BlackRock Agricultural Fund Class 1 (US) Acc Shares	0.14
TOTAL	3.26

Ocean Wilsons Holdings Limited Condensed consolidated statement of comprehensive income for the six months ended 30 June 2009
					Unaudited		Unaudited		Audited
					six months to		six months to		Year to
					30 June		30 June		31 December
					2009		2008		2008
		Notes			US$'000		US$'000		US$'000
Revenue		3			218,982		248,443		498,285
Raw materials and consumables used					(22,295)		(43,901)		(86,480)
Employee benefits expense		5			(66,478)		(70,027)		(130,189)
Depreciation & amortisation expense					(14,816)		(10,636)		(26,259)
Other operating expenses					(69,855)		(83,697)		(157,699)
Profit on disposal of property, plant and equipment					109		241		681
Operating profit					45,647		40,423		98,339
Investment revenue		3, 6			16,707		15,892		6,751
Other gains and losses		7			16,695		(219)		(59,462)
Finance costs		8			(3,675)		(3,951)		(14,078)
Profit before tax					75,374		52,145		31,550
Income tax expense		9			(15,639)		(13,350)		(38,641)
Profit / (loss) for the period					59,735		38,795		(7,091)
Other comprehensive income
Available for sale financial assets:
Gains/(losses) arising during the period:					-		486		(2,341)
Exchange differences arising on translation of
foreign operations					10,382		6,738		(16,119)
Other comprehensive income for the period					10,382		7,224		(18,460)
Total comprehensive income / (loss) for the period					70,117		46,019		(25,551)
Profit / (loss) for the period attributable to:
Equity holders of parent					38,637		22,473		(26,700)
Minority interests					21,098		16,322		19,609
					59,735		38,795		(7,091)
Total comprehensive income / (loss) for the period attributable to:
Equity holders of parent					44,702		29,098		(40,087)
Minority interests					25,415		16,921		14,536
					70,117		46,019		(25,551)
Earnings / (loss) per share
Basic and diluted			11		109.3c		63.5c		(75.5c)

Ocean Wilsons Holdings Limited
Condensed consolidated balance sheet
as at 30 June 2009
				Unaudited		Unaudited		Audited
				as at		as at		as at
				30 June		30 June		31 December
				2009		2008		2008
			Notes	US$'000		US$'000		US$'000
	Non-current assets
		Goodwill		15,612		13,132		15,612
		Other intangible assets		2,073		2,096		1,799
		Property, plant and equipment	12	377,285		281,899		305,035
		Deferred tax assets		18,525		19,255		10,889
		Other non-current assets		9,569		13,153		8,065
				423,064		329,535		341,400
	Current assets
		Available for sale investment		-		7,204		-
		Inventories		16,816		9,308		9,401
		Trading investments	13	226,808		268,969		209,994
		Trade and other receivables	14	104,406		84,910		78,826
		Cash and cash equivalents		172,214		229,514		205,315
				520,244		599,905		503,536
	Total assets			943,308		929,440		844,936
	Current liabilities
		Trade and other payables		(95,056)		(95,750)		(66,093)
		Current tax liabilities		(4,530)		(2,367)		(1,102)
		Obligations under finance leases		(2,974)		(1,553)		(1,116)
		Bank overdrafts and loans	15	(17,161)		(15,631)		(17,777)
				(119,721)		(115,301)		(86,088)
	Net current assets			400,523		484,604		417,448
	Non-current liabilities
		Bank loans	15	(170,823)		(145,982)		(167,439)
		Deferred tax liabilities		(14,475)		(11,893)		(15,726)
		Provisions		(11,273)		(11,884)		(8,454)
		Obligations under finance leases		(6,903)		(4,716)		(3,138)
				(203,474)		(174,475)		(194,757)
	Total liabilities			(323,195)		(289,776)		(280,845)
	Net assets			620,113		639,664		564,091
	Capital and reserves
		Share capital		11,390		11,390		11,390
		Retained earnings		405,696		426,841		376,253
		Capital reserves		31,760		31,760		31,760
		Investment revaluation reserve		-		2,827		-
		Translation reserve		11,236		22,356		5,171
	Equity attributable to equity holders of the parent		460,082			495,174		424,574
	Minority interests			160,031		144,490		139,517
	Total equity			620,113		639,664		564,091

Ocean Wilsons Holdings Limited

Condensed consolidated statement of changes in equity

as at 30 June 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 six months ended  30 June 2008 (unaudited)
Balance at 1 January 2008		11,390	419,080	29,779		2,341	16,217	478,807	134,251	613,058
Losses on available for sale investment		-	-	-		486	-	486	-	486
Currency translation adjustment		-	-	-		-	6,139	6,139	599	6,738
Profit for the period		-	22,473	-		-	-	22,473	16,322	38,795
Total income and expense for  the period		-	22,473	-		486	6,139	29,098	16,921	46,019
Dividends		-	(12,731)	-		-	-	(12,731)	(6,682)	(19,413)
Transfer to capital reserves		-	(1,981)	1,981		-	-	-	-	-
Balance at 30 June 2008		11,390	426,841	31,760		2,827	22,356	495,174	144,490	639,664
For the year ended 31 December 2008 (audited)
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 six months ended  30 June 2009 (unaudited)
Balance at 1 January 2009		11,390	376,253	31,760		-	5,171	424,574	139,517	564,091
Currency translation adjustment		-	-	-		-	6,065	6,065	4,317	10,382
Profit for the period		-	38,637	-		-	-	38,637	21,098	59,735
Total income and expense for the period		-	38,637	-		-	6,065	44,702	25,415	70,117
Dividends		-	(9,194)	-		-	-	(9,194)	(6,682)	(15,876)
Increase in capital		-	-	-		-	-	-	1,781	1,781
Balance at 30 June 2009		11,390	405,696	31,760		-	11,236	460,082	160,031	620,113

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 is 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 Condensed consolidated cash flow statement for the six months ended 30 June 2009
					Unaudited		Unaudited		Audited
					six months to		six months to		Year to
					30 June		30 June		31 December
					2009		2008		2008
			Notes		US$'000		US$'000		US$'000
	Net cash inflow from operating activities		16		35,594		21,963		52,112
	Investing activities
	Interest received				4,809		8,124		23,554
	Dividends received from trading investments				752		1,247		2,250
	Proceeds on disposal of trading investments				23,640		66,699		115,683
	Income from underwriting activities				-		64		390
	Proceeds on disposal of property, plant and equipment				319		1,130		1,950
	Purchases of property, plant and equipment				(71,203)		(32,057)		(90,190)
	Purchases of trading investments				(23,759)		(63,053)		(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				(63,661)		(17,846)		(63,727)
	Financing activities
	Dividends paid			10	(9,194)		(12,731)		(14,146)
	Dividends paid to minority shareholders in subsidiary				(6,682)		(6,682)		(6,682)
	Repayments of borrowings				(8,268)		(7,232)		(13,449)
	Repayments of obligations under finance leases				(1,585)		(339)		(1,980)
	New bank loans raised				8,560		18,172		49,067
	Increase in bank overdrafts				989		111		113
	Net cash (used in)/from financing activities				(16,180)		(8,701)		12,923
	Net (decrease) / increase in cash and cash equivalents				(44,247)		(4,584)		1,308
	Cash and cash equivalents at beginning of year				205,315		227,641		227,641
	Effect of foreign exchange rate changes				11,146		6,457		(23,634)
	Cash and cash equivalents at end of year				172,214		229,514		205,315

Ocean Wilsons Holdings Limited

Notes to the condensed set of financial statements

for the six months ended 30 June 2009

1	General information
(a)	The interim financial information is not the Company's statutory accounts.
(b)	The auditors of the Company have not made any report thereon under section 90(2) of the Bermuda Companies Act.
2	Accounting policies
	The condensed set of financial statements has been prepared using accounting policies consistent with International Financial Reporting Standards ('IFRSs') and in accordance with IAS 34 - Interim Financial Reporting. For these purposes, IFRS comprise the standards issued by the International Accounting Standards Board ('IASB') and interpretations issued by the International Financial Reporting Interpretations Committee ('IFRIC').
	The condensed set of financial statements have been prepared on the basis of accounting policies consistent with those applied in the financial statements for the year ended 31 December 2008. The new IFRS 8 - Operating segments has been applied in these condensed financial statements.

3	Revenue
				Unaudited		Unaudited		Audited
				six months to		six months to		year to
	An analysis of the Group's revenue is as follows:			30 June		30 June		31 December
				2009		2008		2008
				US$'000		US$'000		US$'000
	Sales of services			209,376		223,488		449,652
	Revenue from construction contracts			9,606		24,955		48,633
				218,982		248,443		498,285
	Investment income (note 6)			16,707		15,892		6,751
				235,689		264,335		505,036
	All revenue is derived from continuing operations

4	Business and geographical segments
	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 six months ended 30 June 2009 (Unaudited)
		Maritime
		Services		Investment		Unallocated		Consolidated
		six months to		six months to		six months to		six months to
		30 June		30 June		30 June		30 June
		2009		2009		2009		2009
		US$'000		US$'000		US$'000		US$'000
Revenue		218,982		-		-		218,982
Result
Segment result		52,437		(1,185)		(5,605)		45,647
Investment revenue		16,164		493		50		16,707
Other gains and losses		-		16,695		-		16,695
Finance costs		(3,675)		-		-		(3,675)
Profit before tax		64,926		16,003		(5,555)		75,374
Tax		(15,639)		-		-		(15,639)
Profit after tax		49,287		16,003		(5,555)		59,735
Other information
Capital additions		(77,775)		-		-		(77,775)
Depreciation and amortisation		(14,815)		-		(1)		(14,816)
Balance Sheet
Assets
Segment assets		695,300		230,516		17,492		943,308
Liabilities
Segment liabilities		(316,440)		(499)		(6,256)		(323,195)
For the six months ended 30 June 2008 (Unaudited)
		Maritime
		services		Investment		Unallocated		Total
		six months to		six months to		six months to		six months to
		30 June		30 June		30 June		30 June
		2008		2008		2008		2008
		US$'000		US$'000		US$'000		US$'000
Revenue		248,443		-		-		248,443
Result
Segment result		42,015		(1,748)		156		40,423
Investment revenue		14,163		1,386		343		15,892
Other gains and losses		-		(219)		-		(219)
Finance costs		(3,951)		-		-		(3,951)
Profit before tax		52,227		(581)		499		52,145
Tax		(13,350)		-		-		(13,350)
Profit after tax		38,877		(581)		499		38,795
Other information
Capital additions		(36,438)		-		-		(36,438)
Depreciation and amortisation		(10,636)		-		-		(10,636)
Balance Sheet
Assets
Segment assets		632,566		274,366		22,508		929,440
Liabilities
Segment liabilities		(279,185)		(1,119)		(9,472)		(289,776)
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		(26,528)		-		(1)		(26,529)
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, United Kingdom and Guernsey.

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
									Unaudited		Unaudited		Audited
									six months to		six months to		year ended
			30 June		30 June		31 December		30 June		30 June		31 December
			2009		2008		2008		2009		2008		2008
			US$'000		US$'000		US$'000		US$'000		US$'000		US$'000
	Brazil		601,860		520,575		501,286		77,775		36,438		93,536
	Bermuda		339,004		405,726		341,129		-		-		6
	Other		2,444		3,139		2,521		-		-		-
			943,308		929,440		844,936		77,775		36,438		93,542

5	Employee benefits expense
			Unaudited		Unaudited		Audited
			six months to		six months to		year to
			30 June		30 June		31 December
			2009		2008		2008
			US$'000		US$'000		US$'000
	Aggregate remuneration comprised:
	Wages and salaries		50,202		54,704		110,665
	Share based payment expense		4,631		1,768		(8,148)
	Social security costs		11,388		13,063		26,623
	Other pension costs		257		492		1,049
			66,478		70,027		130,189
6	Investment revenue
			Unaudited		Unaudited		Audited
			six months to		six months to		year to
			30 June		30 June		31 December
			2009		2008		2008
			US$'000		US$'000		US$'000
	Interest on bank deposits		4,809		8,124		23,554
	Exchange gains / (losses) on cash		11,146		6,457		(23,634)
	Dividends from equity investments		752		1,247		2,250
	Investment revenues from underwriting activities		-		64		390
	Profit on sale of investment		-		-		4,191
			16,707		15,892		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.

7	Other gains and losses
			Unaudited		Unaudited		Audited
			six months to		six months to		year to
			30 June		30 June		31 December
			2009		2008		2008
			US$'000		US$'000		US$'000

	Increase / (decrease) in fair value of trading  investments held at year end		18,744			(3,252)		(65,406)
	(Loss) / profit on disposal of trading investments			(2,049)		3,033		5,944
				16,695		(219)		(59,462)
	Other gains and losses form part of the movement in trading investments as outlined in note 13.

8	Finance costs
			Unaudited		Unaudited		Audited
			six months to		six months to		year to
			30 June		30 June		31 December
			2009		2008		2008
			US$'000		US$'000		US$'000
	Interest on bank overdrafts and loans		3,512		3,584		7,028
	Exchange (gain) / losses on foreign currency borrowings		(1,299)		(734)		2,369
	Interest on obligations under finance leases		551		158		677
	Total borrowing costs		2,764		3,008		10,074
	Other interest		911		943		4,004
			3,675		3,951		14,078
9	Taxation
			Unaudited		Unaudited		Audited
			six months to		six months to		year to
			30 June		30 June		31 December
			2009		2008		2008
			US$'000		US$'000		US$'000
	Current
	Brazilian taxation
	Corporation tax		17,111		13,478		22,923
	Social contribution		6,296		5,237		9,310
	Total Brazilian currrent tax		23,407		18,715		32,233
	UK corporation tax		100		113		-
	Total current tax		23,507		18,828		32,233
	Deferred tax
	Charge for the year in respect of deferred tax liabilities		13,837		5,738		(22,635)
	Credit for the year in respect of deferred tax assets		(21,705)		(11,216)		29,043
	Total deferred tax		(7,868)		(5,478)		6,408
	Total taxation		15,639		13,350		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 is exempting it from all such taxes until 28 March 2016.

10	Dividends
			Unaudited		Unaudited		Audited
			six months to		six months to		year to
			30 June		30 June		31 December
			2009		2008		2008
			US$'000		US$'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		12,731
	Interim dividend paid for the year ended 31 December 2008 of 4.0c per share			-		-		1,415
				9,194		12,731		14,146
	Proposed interim dividend for the year ended 31 December 2009 of 4.0c (2008: 4.0c) per share			1,415		1,415		-
	Proposed final dividend for the year ended 31 December 2008 of 26.0c			-		-		9,194

The proposed interim dividend is subject was approved by the Board on the 14 August 2009 and has not  been included as a liability in these financial statements.

11	Earnings per share
	The calculation of the basic and diluted earnings per share is based on the following data:
		Unaudited		Unaudited		Audited
		six months to		six months to		year to
		30 June		30 June		31 December
		2009		2008		2008
	Earnings :	US$'000		US$'000		US$'000
	Earnings / (losses) for the purposes of basic earnings per share being net profit attributable to equity holders of the parent.
		38,637		22,473		(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		35,363,040

12	Property, plant and equipment
	During the period, the Group spent approximately US$ 77.8 million mainly on vessel construction and port terminal equipment. At 30 June 2009, the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to US$ 11.8 million.

13	Investments		`
			Unaudited		Unaudited		Audited
			30 June		30 June		31 December
	Trading investments		2009		2008		2008
			US$'000		US$'000		US$'000
	At 1 January		209,994		272,834		272,834
	Additions, at cost		23,759		63,053		112,305
	Disposals, at market value		(23,640)		(66,699)		(115,683)
	Increase / (decrease) in fair value of trading investments held at year end		18,744		(3,252)		(65,406)
	(Loss) / profit on disposal of trading investments		(2,049)		3,033		5,944
	At period end		226,808		268,969		209,994
	less trading investments held at cost		-		(6,226)		-
	Trading investments held at fair value at period end		226,808		262,743		209,994

	The Group has not designated any financial assets that are not classified as trading investments as financial assets at fair value through profit or loss.
	Trading investments above represent investments in listed equity securities, funds and unquoted equities and that present the Group with opportunity for return through dividend income and capital appreciation.
	Included in trading investments are open ended funds whose shares may not be listed on a recognised stock exchange but are redeemable for cash at the current net asset value at the option of the company. They have no fixed maturity or coupon rate. The fair values of these securities are based on quoted market prices where available.
	Where quoted market prices are not available, fair values are determined using various valuation techniques.

14	Trade and other receivables
			Unaudited		Unaudited		Audited
			30 June		30 June		31 December
			2009		2008		2008
	Trade and other receivables		US$'000		US$'000		US$'000
	Amount receivable for the sale of services		43,613		40,716		36,192
	Allowance for doubtful debts		(2,037)		(3,906)		(2,761)
			41,576		36,810		33,431
	Taxation recoverable		3,544		3,596		2,676
	Prepayments and accrued income		59,286		44,504		42,719
			104,406		84,910		78,826

	In determining recoverability of trade receivables, the Group considers any change in the credit quality of the trade.  Receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated except for one customer which accounts for 10% of Group revenue. The directors believe that there is no further credit provision required in excess of the allowance for doubtful debts. The directors consider that the carrying amount of trade and other receivables approximates their fair value.
	Cash and cash equivalents
	Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.
	Private investment funds
	The Group has investments in private investment funds that are consolidated in the financial statements as cash equivalents. The private investment funds are considered as cash equivalents as despite the certificates of deposit having maturities up to February 2012, 80% of funds invested are available on call and the balance on one days notice. The intention of the Group is that these resources will be used in the trading activities of the Group. These private investment funds comprise certificates of deposit and equivalent instruments with final maturities ranging from July 2009 to February 2012. The securities included in the portfolio of the private investment funds have daily liquidity and are marked to market on a daily basis against current earnings. These private investment funds do not have significant financial obligations. Any financial obligations are limited to service fees to the asset management company employed to execute investment transactions, audit fees and other similar expenses.
	Credit risk
	The Group's principal financial assets are cash, trade and other receivables and trading investments.
	The Group's credit risk is primarily attributable to its bank balances, trade receivables and investments.   The amounts presented as receivables in the balance sheet are net of allowances for doubtful receivables as outlined above.
	The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The credit risk on investments held for trading is limited because the counterparties with whom the Group transacts are regulated institutions or banks with high credit ratings.
	The company's appointed investment manager, Hanseatic Asset Management LBG, evaluates the credit risk on trading investments prior to and during the investment period.
	The Group has no significant concentration of credit risk except for one large customer, which makes up 10% of revenue.
	Ongoing credit evaluation is performed on the financial condition of accounts receivable.

15	Borrowings
			Unaudited	Unaudited	Audited
			30 June	30 June	31 December
			2009	2008	2008
		Interest	US$'000	US$'000	US$'000
	Unsecured borrowings
	Bank overdrafts	CDI +1.53% p.m.	1,102	155	113
	Secured borrowings
	Bank loans
	BNDES	2.64% to 5% p.a	164,257	130,825	159,721
	IFC	1.9% to 14.09% p.a	22,625	30,633	25,382
			186,882	161,458	185,103
	Total borrowings		187,984	161,613	185,216
	The borrowings are repayable as follows :
	On demand or within one year		17,161	15,631	17,777
	In the second year		14,768	15,473	15,095
	In the third to fifth years inclusive		44,483	37,408	43,321
	After five years		111,572	93,101	109,023
	Total borrowings		187,984	161,613	185,216
	Amounts due for settlement within 12 months		(17,161)	(15,631)	(17,777)
	Amounts due for settlement after 12 months		170,823	145,982	167,439

	Analysis of borrowings by currency :		$Real
			linked to
		$Real	US Dollars	US Dollars	Total
	30 June 2009 (unaudited)	US$'000	US$'000	US$'000	US$'000
	Bank overdrafts	1,102	-	-	1,102
	Bank loans	4,867	164,257	17,758	186,882
	Total	5,969	164,257	17,758	187,984
	30 June 2008 (unaudited)
	Bank overdrafts	155	-	-	155
	Bank loans	5,833	130,825	24,800	161,458
	Total	5,988	130,825	24,800	161,613
	31 December 2008 (audited)
	Bank overdrafts	113	-	-	113
	Bank loans	4,066	159,721	21,316	185,103
	Total	4,179	159,721	21,316	185,216

	The Group has two main sources of financing:
	BNDES (Banco Nacional de Desenvolvimento Economico e Social): As agent for the 'FMM' (Fundo de Marinha Mercante) the BNDES finances tug boat and platform supply vessel construction and secure mortgages on the vessels financed. Loans received from the BNDES are $Real denominated loans linked to the US Dollar are monetarily corrected by the movement in the US Dollar/$Real exchange rate and bear interest of between 1.5% and 5.0% per annum.
	The amounts outstanding at 30 June 2009 are repayable over periods varying up to 20 years.
	IFC (International Finance Corporation); The IFC finances the Group's two container terminals, Tecon Rio Grande and Tecon Salvador. 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.
	US dollar denominated loans consist of variable rate and fixed rate loans. Variable rate loans bear interest at between six month Libor per annum and six month Libor plus 4.0%. US dollar denominated fixed rate loans bear interest of 8.49% per annum. Real denominated loans bear interest at 14.09% per annum. The amounts outstanding at 30 June 2009 are repayable over periods varying up to 7 years.
	Three of the Group's platform supply vessels have a guarantee involving receivables from the client that has contracted the vessels. Funds received from the client pass through a special account before being immediately transferred to the Company's corporate account. The subsidiaries Tecon Rio Grande and Tecon Salvador have specific restrictive clauses in their financing contracts with financial institutions related, basically, to the maintenance of liquidity ratios. At 30 June 2009, the Group was in accordance with all clauses of these contracts.

16	Notes to the cash flow statement
			Unaudited		Unaudited		Audited
			30 June		30 June		31 December
			2009		2008		2008
	Reconciliation from profit before tax to net cash from operating activities		US$'000		US$'000		US$'000
	Profit before tax		75,374		52,145		31,550
	Investment revenues		(16,707)		(15,892)		(6,751)
	Other gains and losses		(16,695)		219		59,462
	Finance costs		3,675		3,951		14,078
	Operating profit		45,647		40,423		98,339
	Adjustments for:
	Depreciation of property, plant and equipment		14,749		10,486		25,960
	Amortisation of intangible assets		67		150		299
	Share based payment expense		4,631		1,768		(8,148)
	Gain on disposal of property, plant and equipment		(109)		(241)		(681)
	Increase / (decrease) in provisions		2,819		(600)		(4,030)
	Operating cash flows before movements in working capital		67,804		51,986		111,739
	Increase in inventories		(7,415)		(1,929)		(2,022)
	Increase in receivables		(22,043)		(14,417)		(9,253)
	Increase / (decrease) in payables		24,332		7,343		(6,887)
	Decrease / (increase) in other non-current assets		(1,504)		(2,032)		3,056
	Cash generated by operations		61,174		40,951		96,633
	Income taxes paid		(21,413)		(16,614)		(33,067)
	Interest paid		(4,167)		(2,374)		(11,454)
	Net cash from operating activities		35,594		21,963		52,112

17	Commitments
	At 30 June 2009 the Group had entered into five commitment agreements with respect to five separate trading investments. These commitments relate to capital subscription agreements entered into by Ocean Wilsons Investments Limited.
	The details of these commitments are as follows:

					Unaudited		Unaudited		Audited
					Outstanding at		Outstanding at		Outstanding at
					30 June		30 June		31 December
					2009		2008		2008
	Expiry date		Commitment		US$'000		US$'000		US$'000
	08 November 2008		5,000		-		1,500		-
	31 March 2009		3,000		840		1,200		1,200
	30 June 2010		991		248		399		253
	31 October 2012		3,000		271		866		3,904
	31 October 2012		5,000		3,786		3,368		271
	13 March 2013		5,000		3,509		4,774		3,693
	Total		21,991		8,654		12,107		9,321

18	Related party transactions
	Transactions between this company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the group and its associates, joint ventures and others investments are disclosed below.

		Dividends received / Revenue of services					Amounts paid /  Cost of services
		30 June	30 June		31 December		30 June	30 June		31 December
		2009	2008		2008		2009	2008		2008
		US$'000	US$'000		US$'000		US$'000	US$'000		US$'000
Joint ventures
1.Allink Transportes Internacionais Limitada		202	336		688			-		(5)
2. Consórcio de Rebocadores Barra de Coqueiros		177	91		221		-	-		-
3. Consórcio de Rebocadores Baía de São Marcos		1,924	3,006		4,749		-	-		-
4. Dragaport Engenharia		29	-		-		-	(222)		(296)
Others
5.Hanseatic Asset Management		-	-		-		(1,079)	(1,374)		(2,538)
6. Gouvea Vieira Advogados		-	-		-		(24)	(26)		(39)
7. Jofran Services		-	-		-		(40)	(40)		(70)
8. Frag Consulting		-	-		-		(25)	(25)		(50)
9. P Hamilton-Hill		-	-		-		-	-		-
		Amounts Owed  by related parties					Amounts Owed  by related parties
		30 June		30 June		31 December	30 June		30 June	31 December
		2009		2008		2008	2009		2008	2008
		US$'000		US$'000		US$'000	US$'000		US$'000	US$'000
Joint ventures
1.Allink Transportes Internacionais Limitada		8		15		18	-		-	-
2. Consórcio de Rebocadores Barra de Coqueiros		103		153		128	(87)		-	-
3. Consórcio de Rebocadores Baía de São Marcos		2,095		3,539		2,796	-		(121)	-
4. Dragaport Engenharia		-		-		-	-		-	-
Others
5.Hanseatic Asset Management		-		-		-	(202)		(224)	(195)
6. Gouvea Vieira Advogados		-		-		-	-		-	-
7. Jofran Services		-		-		-	-		-	-
8. Frag Consulting		-		-		-	-		-	-
9. P Hamilton-Hill		2,114		-		-	-		-	-

1-4.The transactions with the joint ventures are disclosed as a result of proportionate amounts not eliminated on consolidation.

5. Mr W H Salomon is Chairman of Hanseatic Asset Management. Fees were paid to Hanseatic asset management for acting as investment managers of the Groups investment portfolio and administration services.

6. Dr J.F. Gouvea Vieira is a managing partner in the law firm Gouvea Vieira Advogados. Fees were paid to Gouvea Vieira Advogados for legal services.

7. Mr J F Gouvea Vieira is a Director of Jofran Services. Directors fees and consultancy fees were paid to Jofran Services.

8. Mr F Gros is a Director of Frag Consulting. Directors fees and consulting fees relating to the Wilson Sons IPO were paid to Frag Consulting.

9. Mr P Hamilton-Hill is a minority shareholder in Brasco. A loan was made to Mr P Hamilton-Hill.

19	Financial instruments
	Capital risk management
	The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern.  The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 15, cash and cash equivalents and equity attributable to equity holders of the parent comprising issued capital, reserves and retained earnings and the consolidated statement of changes in equity.
	The Group borrows to fund capital projects and looks to cash flow from these projects to meet repayments.  Working capital is funded through cash generated by operating revenues.
	Externally imposed capital requirement
	The Group is not subject to externally imposed capital requirements.
	Financial risk management objectives
	The Group's Corporate Treasury function provides services to the business, co-ordinates access to domestic  and international financial markets and manages the financial risks relating to the operations of the Group through internal reports. These risks include market risk, (including currency risk, interest rate risk and price risk) credit risk and liquidity risk.
	The Group may use derivative financial instruments to hedge these risk exposures, with Board approval. The Group does not enter into trade financial instruments, including derivative financial instruments for  speculative purposes.
	Market risk
	The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
	Foreign currency risk management
	The Group undertakes certain transactions denominated or linked to foreign currencies and therefore exposures to exchange rate fluctuations arise. The Group operates principally in Brazil with a substantial proportion of the Group's revenue, expenses, assets and liabilities denominated in the Real. Due to the cost of hedging the Real, the Group does not normally hedge its net exposure to the Real as the Board does not consider it economically viable.
	Interest rate risk management
	The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates.
	The Group borrows from the BNDES (Banco Nacional de Desenvolvimento Economico e Social) to finance vessel construction. These loans are fixed interest rates loans linked to the US Dollar. Due to the favourable rates offered by the BNDES, in the Group's opinion, there is minimal market interest rate risk.
	The Group borrows from the BNDES (Banco Nacional de Desenvolvimento Economico e Social) to finance vessel construction.  These loans are fixed interest rates loans linked to the US Dollar. Due to the favourable rates offered by the BNDES, in the Group's opinion, there is minimal market interest rate risk.
	The Group's strategy for managing interest rate risk is to maintain a balanced portfolio of fixed and floating interest rates in order to  balance both cost and volatility. The Group may use derivative instruments to reduce cash flow interest rate attributable to interest rate volatility.
	As at 30 June 2009, the Company had no outstanding interest rate swap contracts.
	Credit risk management
	Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.  The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.
	The Group's sales policy is subordinated to the credit sales rules set by management, which seeks to mitigate any loss from customers' delinquency.
	Trade receivables consist of a large number of customers except for one large customer, which makes up 10% of revenue.  Ongoing credit evaluation is performed on the financial condition of accounts receivable.
	Liquidity risk management
	Ultimate responsibility for liquidity risk management rests with the Board of Directors .  The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
	Fair value of financial instruments
	The fair value of non-derivative financial assets traded on active liquid markets are determined with reference to quoted market prices.
	The carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial Statements approximate their fair value.

 

END

 

 

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