emphasis on the port and shipping sector. The principal operating segments of
the business are port terminals, towage, logistics, shipping agency and offshore
Highlights
* Net revenue grew by 23.3% to US$498.3 million from US$404 million in 2007
* EBITDA increased by 34.7% from US$91.4 million to US$122.7 million.
* Capital expenditure of US$93.5 million in the year principally on the expansion
of the Tecon Rio Grande container terminal, and further vessel construction for
our offshore and tug boat fleets.
* Net debt of US$ 5.2 million at 31 December 2008. 92% of all debt is long-term
with 98% US Dollar or linked to the US Dollar.
2008 presented a number of challenges ranging from operational and financial
targets, international trade flow uncertainty and a slowdown in export volumes
late in the year. The adverse business environment became more critical with the
onset of the latest global financial crisis, which deepened late in the third
quarter of 2008. Wilson Sons met these challenges diligently, while delivering
in 2008 positive year-over-year results, demonstrating the operational and
financial strengths of our business model.
Port Operations
Wilson Sons port terminals operates two container terminals, located in Rio
Grande, Rio Grande do Sul and Salvador in Bahia, Brazil (Tecon Rio Grande and
Tecon Salvador). Both terminals, offer assistance in port operations for loading
and unloading of vessels, storage, and auxiliary services. The Company also
operates Brasco, located in Rio de Janeiro, which provides support services to
the oil and gas industry
Net revenue increased by 14.4%, from US$ 149.0 million in 2007 to US$ 170.5
million in 2008. Building on strong results throughout the first three quarters
of 2008, total net revenues at port terminals declined moderately in 4Q2008,
negatively affected by the stronger US Dollar, since its revenue base is
predominately denominated in Brazilian Reais. Container volumes at 865,114 were
3.8% lower than 2007. In October 2008, the third berth expansion at Tecon Rio
Grande was delivered, increasing operating capacity by 60%. This had an
immediate impact in terms of new liner services calling at the terminal and a
decrease in call cancelations by ship owners (from longer "port stays" being
offered).
Operating profit at US$50.9 million for 2008 was 25% ahead of 2007, (US$40.8
million) due to higher-margin services provided, mostly from warehousing
activities, a better mix of deep-sea containers handled, and the benefit from
non-recurring fiscal credits reclaimed.
Towage
Wilson Sons offers harbour towage, ocean towage, salvage support and maritime
support to the offshore oil and gas industry.
Towage net revenue at US$ 147.1 million was in line with 2007, US$ 146.8
million. Net revenues were lower in 4Q08, relative to 2007, as a result of the
deepening of the global crisis, and a decrease in the number of harbour
manoeuvres. Revenues were further negatively affected by the adverse foreign
exchange impact on Brazilian Real denominated revenues and by a reduction in the
number of special operations performed in the quarter. Full year 2008 revenues
were mostly in line with the previous-year figures and special operations
represented 9.1% of towage net revenues for the year 2008, a 1.5 percentage
point increase over 2007.
Operating profit increased by 7%, from US$ 45.4 million in 2007 to US$ 48.6
million in 2008. Margins benefitted from a high margin deal to support LNG
activities in Pecém, the stronger US Dollar against the Brazilian Real (as the
majority of towage revenues are denominated in US Dollars, whereas most costs
are in Reais), and from the benefit derived from non-recurring fiscal credits.
These items offset the adverse impact of lower volumes in the fourth quarter.
Two new tugboats were added to the Company's fleet in 2008, one of which
replaced an older unit, the tugboat 'Corona'. Overall, the entire fleet
increased to 68 units.
Logistics
Wilson Sons develops and provides differentiated logistics solutions for the
management of the supply chain of our clients and the distribution of products,
including a number of logistics services, such as, storage, customs storage,
distribution, highway transportation, multimodal transportation and NVOCC - Non
Vessel Operating Common Carrier.
Net revenue from our Logistics business grew 29% from US$ 69.1 million in 2007
to US$89.3 million in 2008. Fourth quarter revenues declined 7% relative to 2007
principally due to the strengthening of the US Dollar in late 2008, as almost
all revenue is Real denominated. Revenue from the Company's bonded warehouse
(EADI), located in Santo André, improved mainly due to an increase in the value
of goods stored, longer storage time and the strengthening of the US Dollar
versus the Real.
Operating profit increased by 15%, from US$ 4.6 million in 2007 to US$ 5.3
million in 2008 due to improved results from the EADI Santo Andre and an
increase in the range of services offered to existing clients.
Shipping agency
Wilson Sons acts as the ship owners' representative as well providing the
following services to ship owners: commercial representation, cargo
documentation, container control and vessel support.
Net revenue declined 14% from US$ 20.4 million in 2007 to US$ 17.6 million in
2008. Despite challenging market conditions, higher bill of lading fees and
agency fees partially offset the negative impact from the decline in container
volumes caused by the loss of a major agency client.
Operating profit was in line with 2007. The reversal in the doubtful debts
provision and increased revenue from the strengthening US Dollar against the
Brazilian Real, (revenues are principally US Dollar denominated) offset the
negative impact from the loss of a major client in 2008.
Offshore
Wilson Sons operates platform supply vessels (PSVs), to transport equipment and
supplies to and from offshore oil and gas installations.
Net revenue increased by 102%, from US$ 10.7 million in 2007 to US$ 21.6 million
in 2007 due to the larger fleet size (a total of 5 PSVs, 2 of which having
operated at spot rates) and better pricing. Pricing improved due to the
strengthening of the US Dollar against the Real, annual correction on our long
term contacts and premium pricing from the two vessels operating in the spot
market. The improvement in revenue was reflected in improved operating margins
with 2008 operating margins improving to 37% from 17% in 2007. Operating profit
increased 350% from US$ 1.8 million to US$ 8.1 million. The Company's offshore
business continued to achieve high levels of growth and maintained its position
as the Company's third largest business segment, in terms of EBITDA generation.
In November 2008 Wilson Sons announced that it was negotiating with Magallanes
Navegacao Brasileira S.A., owned by the Ultratug Group from Chile, to create a
joint venture to operate offshore support vessels. The proposed joint venture
would merge the offshore operations in Brazil of the two companies into a 50/50
joint venture, to include OSVs (Offshore Support Vessels) currently under
construction, as well as OSVs in operation. Through the joint venture, Wilson
Sons will gain additional expertise and economies of scale from an expanded
offshore operation, while taking advantage of growth opportunities in Brazil's
offshore oil and gas industry.
Non Segmental
Non-segmented activities include shipyard and our joint venture dredging company
Dragaport and unallocated corporate costs.
All revenue in 2008 is derived from shipbuilding activities as in 2007 Dragaport
sold its 2 Dredgers. Revenue increased from US$8.1 million in 2007 to US$ 52.2
million in 2008 due to the construction of platform supply vessels for third
parties. Construction contracts are accounted for upon completion of each phase
of the contract.
Unallocated corporate costs accounted for as non-segmented activities, remained
fairly stable, as measured on a year-over-year basis.
+--+------------------------------+----------+-------+--+------------+---+------------+
| Ocean Wilsons Holdings Limited | |
+------------------------------------------------------------------------+------------+
| Consolidated Income Statement | |
+------------------------------------------------------------------------+------------+
| for the year ended 31 December 2008 | |
+------------------------------------------------------------------------+------------+
| | | | | | | | |
+--+------------------------------+----------+-------+--+------------+---+------------+
| | | | | | 31 | | 31 |
| | | | | | December | | December |
+--+------------------------------+----------+-------+--+------------+---+------------+
| | | | | | 2008 | | 2007 |
+--+------------------------------+----------+-------+--+------------+---+------------+
| | | |Notes | | US$'000 | | US$'000 |
+--+------------------------------+----------+-------+--+------------+---+------------+
| | | | | | | | |
+--+------------------------------+----------+-------+--+------------+---+------------+
| | Revenue | 3 | | 498,285 | | 404,046 |
+--+-----------------------------------------+-------+--+------------+---+------------+
| | | | | | | | |
+--+------------------------------+----------+-------+--+------------+---+------------+
|