Ocean Wilsons Holdings Limited – Preliminary Announcement And Chairman’s Statement

Hamilton, Bermuda – 24 March, 2010 - Ocean Wilsons Holdings Limited (OCN.BH) has today released the Chairman’s statement and preliminary results for fiscal year ending 31 December, 2009.

CHAIRMAN’S STATEMENT

Overview

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

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

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

Introduction

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

Results 

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

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

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

Investment Portfolio

Investment managers

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

Investment strategy

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

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

Investment portfolio performance

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

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

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

Wilson Sons Limited

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

Brazil

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

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

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

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

Dividend

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

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

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

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

Depository receipts

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

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

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

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

If you have any questions in relation to the Depositary Interests please contact Capita Registrars, at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU – telephone no. 0871 664 0300 (Calls cost 10 pence per minute plus network extras.) or from outside the UK  +44 208 639 3399.

Long term incentive plan

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

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

Charitable donations

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

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

Website: www.taskbrasil.org.uk

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

Website:www.escoladegente.org.br

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

Website www.amigosdozippy.org.br

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

Board of Directors

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

Outlook

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

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

Management and staff

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

J. F. Gouvêa Vieira

Chairman

23 March 2010