Ocean Wilson Holdings Releases Chairman's Interim Statement

Towage continued to perform well. Operating margins improved, enabling the Group to recover its US dollar denominated cost of finance. Additionally the number of vessels attended increased modestly. The two PSV's (Platform Supply Vessels) constructed at our shipyard in Guaruja were completed during the period and are currently being operated by the Group under contract to Petrobras.

Ship Agency results were ahead of the comparative period in 2002 as a result of a new liner service added in the second half of 2002 and increased tramp volumes.

Container volumes at Tecon Rio Grande increased 26% over the first half 2002 to 257,611 TEUs (twenty foot equivalent units). Revenue was up 47% in $Real terms and operating margins showed an improvement over the comparative period in 2002. Business at Tecon Salvador continues to develop with both turnover and profit showing improvement over 2002

Profit before taxation was £22.5 million (2002: - £4.3 million loss) benefiting from exchange gains on foreign currency borrowings of £11.3 million (2002: - £ 12.8 million loss), a movement of £24.1 million. Earnings per share based on ordinary activities after taxation and minority interests improved significantly to 41.92p (2002: - 6.43p loss).

Exchange rates

In the six months to 30 June 2003, the $Real strengthened 19% against the US dollar (from 3.54 to 2.87) and 17% against sterling (from 5.70 to 4.73). In contrast the sterling average exchange rate in the period used to translate the profit and loss account and cash flow was 5.18 against 3.53 for the comparative period in 2002, a change of 47%.

Exchange gains/losses on foreign currency borrowings

As in prior periods the Group's Brazilian subsidiaries have significant US dollar loans and $Real denominated loans that are monetarily corrected by the movement in the US dollar/ $Real exchange rate. The revaluation of the $Real against the US dollar has generated an £11.3 million (2002: - £12.8 million loss) $Real denominated gain on the Group's US dollar and US dollar linked loans. Under UK GAAP the Group is required to recognise this result in the profit and loss account in the period it occurs.

The cash flow effect of these exchange movements will only be realised over the life of the loans when repayments are made. Whilst the value of the loans remain unchanged in US Dollars, repayments need to be made out of local currency. The Board, in internally evaluating the Group's performance, spreads the exchange gain / loss on borrowings over the remaining life of the loans. On the basis of spreading the exchange gains / losses, the portion of current exchange gains and past exchange losses attributable to the period would be a loss of £3.0 million (2002: - £2.9 million loss) as compared to the reported exchange gain of £11.3 million (2002: - £12.8 million loss).

Dividend

The board has resolved that an interim dividend of 1.00p per share (2002: 1.00p per share) be paid on 31 October, 2003 to shareholders on the register at close of business on 10 October 2003. As previously stated future dividend payments will be determined by the Board taking into consideration all aspects of the Group's business, but especially profitability and free cash flow.

Cash flow

The net cash inflow from operating activities during the period was £7.7 million which is £1.6 million lower than prior period (2002: - £9.3 million), principally due to an adverse movement in working capital of £4.1 million (2002: - £0.3 million). Free cash flow fell £3.9 million to £1.8 million (2002: - £5.7 million) as a result of lower operating cash flow and higher taxation payments. Free cash flow represents net cash inflow from operations, less net capex, taxation payments and net interest. At 30 June 2003 Group net debt was £26.9 million (31 December 2002: - £30.7 million).

Group Net Assets

At 30 June 2003, the Group's net assets amounted to £64.2 million (31 December 2002: - £42.0 million). The increase in the Group's net assets is principally attributable to the revaluation of the $Real as the greater part of the Group's net assets are $Real denominated and financed in US dollars.

The Group's net assets represent 181.6p per share (31 December 2002: - 118.9p). Net assets located in Brazil account for 103.8p (31 December 2002: - 47.6p) and net assets outside Brazil 77.8p (31 December 2002: - 71.3p). At 18 September 2003 the total of the investment portfolio (including cash under management) was £25.0 million, an increase of 17% since year end.

Future Prospects

The operating results for July and August are in line with the same period in 2002 and the operational forecast for the year is positive. However the Group's results remain sensitive to movements in the $Real exchange rate. The Brazilian export sector is performing well and the $Real has remained relatively stable since the period end, trading against the US dollar between 2.88 and 3.13.

The Board will review the level of the final dividend payment to be announced in April 2004 in the light of trading conditions and the performance of the $Real.

Signed by:

J F Gouvea Vieira