"Accounts and Dividends.
The unaudited accounts for the six months ended 30th June, 2001 show an operating profit for the period of £4,954,000 (2000 - £3,545,000). The operating business continued to perform well with underlying operating profit after excluding non-recurring items at £4.3 million in line with 2000 (£4.2 million). The share of operating profit from joint ventures increased by £1.0 million to £1.5 million (2000 - £467,000).
Towage revenue was up in $Reais terms and operating margins showed an improvement over the comparative period in 2000. Additional income was generated from towage support for salvage and margins at our towage joint ventures also showed an improvement.
Profitability at the Ship Agency continued to benefit from the devaluation of the $Real as most of the divisions revenues is in US dollars while costs are predominantly $Reais denominated.
Tecon Rio Grande continued to perform well with revenue increasing in both $Reais and sterling terms. Operating margins were marginally lower due to increased depreciation following completion of the expanded terminal. Business at Tecon Salvador continues to develop although more slowly than expected. Our joint venture bonded warehouse Eadi Santo Andre made good progress with both revenues and profit increasing in sterling terms.
In the six months to 30 June 2001 the $Real devalued 18% against the US dollar (from 1.95 to 2.30) and 11% against sterling (from 2.91 to 3.25). The Group's Brazilian subsidiaries have significant borrowings in US dollars and $Real denominated loans that are monetarily corrected by the movement in the US dollar / $Real exchange rate. The Group assumes this risk as there is no long-term financing denominated in $Reais available to us for capital expenditure. Current interest rates on $Reais commercial borrowings in Brazil are 25% per annum. Due to the prohibitive cost of hedging the $Real the Group does not hedge its net exposure. The devaluation of the $Real against the US dollar has generated a large $Real denominated loss on the Group's US dollar and US dollar linked loans of £8,826,000 (2000 - £487,000). The cashflow effect of these losses in $Reais is only realised when repayments are made over the life of the loans, up to 12 years. The average maturity is 9 years. The priority for management is to raise our $Real tariffs in order to service the increased $Reais debt repayments.
The loss before taxation was £2.4 million (2000 - £4.4 million profit). Excluding exchange losses on foreign currency borrowings and non recurring items included in the operating profit, the profit before tax was unchanged at £5.8 million (2000 - £5.6 million).
The loss per share based on ordinary activities after taxation and minority interests of 2.97p (2000 - Earnings per share 5.98p) reflected the negative impact of the exchange losses on foreign currency borrowings on the Group's results. The board has resolved that an interim dividend of 1.00p per share be paid on 2nd of November, 2001 to shareholders on the register at close of business on 12th October 2001.
Cash flow
Net cash inflow from operating activities during the period remained strong at £7.0 million (2000 - £4.8 million).
Group Net Assets.
At 30th June 2001 Group net assets amounted to 155.94p per share (31st December, 2000 - 164.73p) of which 78.05p (31st December 2000 - 86.08p) was attributable to assets located in Brazil and 77.89p (31st December 2000 - 78.65p) in other, primarily financial assets outside Brazil. At 19 September 2001 the total of the investment portfolio and cash balances held outside Brazil was approximately £25.8 million (73.0p per share).
Share repurchases
During the period the Group repurchased and cancelled a further 2.08 million shares at an average price of 81.3p per share. Consequently as at 25th September the number of shares in issue is 35,363,040.
Management
After 37 years of service to the company and having reached the age of 60, Mr Claudio Marote is retiring as Managing Director of the Group. We are delighted that he has agreed to remain on the board so the company will continue to benefit from his intimate knowledge of the Brazilian towage market. We are pleased to announce that Mr Cezar Baião, currently Finance Director has been appointed a Director of the Holding company and will assume responsibility of Managing Director from 31 October of this year. Mr Keith Middleton the Group Finance Director will assume Accounts and Dividends.
The unaudited accounts for the six months ended 30th June, 2001 show an operating profit for the period of £4,954,000 (2000 - £3,545,000) The operating business continued to perform well with underlying operating profit after excluding non-recurring items at £4.3 million in line with 2000 (£4.2 million). The share of operating profit from joint ventures increased by £1.0 million to £1.5 million (2000 - £467,000).
Towage revenue was up in $Reais terms and operating margins showed an improvement over the comparative period in 2000. Additional income was generated from towage support for salvage and margins at our towage joint ventures also showed an improvement.
Profitability at the Ship Agency continued to benefit from the devaluation of the $Real as most of the divisions revenues is in US dollars while costs are predominantly $Reais denominated.
Tecon Rio Grande continued to perform well with revenue increasing in both $Reais and sterling terms. Operating margins were marginally lower due to increased depreciation following completion of the expanded terminal. Business at Tecon Salvador continues to develop although more slowly than expected. Our joint venture bonded warehouse Eadi Santo Andre made good progress with both revenues and profit increasing in sterling terms.
In the six months to 30 June 2001 the $Real devalued 18% against the US dollar (from 1.95 to 2.30) and 11% against sterling (from 2.91 to 3.25). The Group's Brazilian subsidiaries have significant borrowings in US dollars and $Real denominated loans that are monetarily corrected by the movement in the US dollar / $Real exchange rate. The Group assumes this risk as there is no long-term financing denominated in $Reais available to us for capital expenditure. Current interest rates on $Reais commercial borrowings in Brazil are 25% per annum. Due to the prohibitive cost of hedging the $Real the Group does not hedge its net exposure. The devaluation of the $Real against the US dollar has generated a large $Real denominated loss on the Group's US dollar and US dollar linked loans of £8,826,000 (2000 - £487,000). The cashflow effect of these losses in $Reais is only realised when repayments are made over the life of the loans, up to 12 years. The average maturity is 9 years. The priority for management is to raise our $Real tariffs in order to service the increased $Reais debt repayments.
The loss before taxation was £2.4 million (2000 - £4.4 million profit). Excluding exchange losses on foreign currency borrowings and non recurring items included in the operating profit, the profit before tax was unchanged at £5.8 million (2000 - £5.6 million).
The loss per share based on ordinary activities after taxation and minority interests of 2.97p (2000 - Earnings per share 5.98p) reflected the negative impact of the exchange losses on foreign currency borrowings on the Group's results. The board has resolved that an interim dividend of 1.00p per share be paid on 2nd of November, 2001 to shareholders on the register at close of business on 12th October 2001.
Cash flow
Net cash inflow from operating activities during the period remained strong at £7.0 million (2000 - £4.8 million).
Group Net Assets.
At 30th June 2001 Group net assets amounted to 155.94p per share (31st December, 2000 - 164.73p) of which 78.05p (31st December 2000 - 86.08p) was attributable to assets located in Brazil and 77.89p (31st December 2000 - 78.65p) in other, primarily financial assets outside Brazil. At 19 September 2001 the total of the investment portfolio and cash balances held outside Brazil was approximately £25.8 million (73.0p per share).
Share repurchases
During the period the Group repurchased and cancelled a further 2.08 million shares at an average price of 81.3p per share. Consequently as at 25th September the number of shares in issue is 35,363,040.
Management
After 37 years of service to the company and having reached the age of 60, Mr Claudio Marote is retiring as Managing Director of the Group. We are delighted that he has agreed to remain on the board so the company will continue to benefit from his intimate knowledge of the Brazilian towage market. We are pleased to announce that Mr Cezar Baião, currently Finance Director has been appointed a Director of the Holding company and will assume responsibility of Managing Director from 31 October of this year. Mr Keith Middleton the Group Finance Director will assume responsibility for the finance function in the Brazilian subsidiaries.
Future Prospects.
The operating result for July and August are in line with the same period in 2000. Our insurance underwriting subsidiary operating at Lloyds is likely to suffer some losses as a result of the terrorist attack on the World Trade Centre. Our liability is limited to approximately £1.0 million.
The board will review the level of the final dividend payment to be announced in April 2002 in the light of trading conditions and the performance of the $Real which has fallen a further 19% against sterling to 3.98. If this exchange rate is maintained at the year end this will adversely impact the Groups results.
J F Gouvêa Vieira
responsibility for the finance function in the Brazilian subsidiaries.
Future Prospects.
The operating result for July and August are in line with the same period in 2000. Our insurance underwriting subsidiary operating at Lloyds is likely to suffer some losses as a result of the terrorist attack on the World Trade Centre. Our liability is limited to approximately £1.0 million.
The board will review the level of the final dividend payment to be announced in April 2002 in the light of trading conditions and the performance of the $Real which has fallen a further 19% against sterling to 3.98. If this exchange rate is maintained at the year end this will adversely impact the Groups results.
J F Gouvêa Vieira
The operating business continued to perform well with underlying operating profit after excluding non-recurring items at £4.3 million in line with 2000 (£4.2 million). The share of operating profit from joint ventures increased by £1.0 million to £1.5 million (2000 - £467,000).
Towage revenue was up in $Reais terms and operating margins showed an improvement over the comparative period in 2000. Additional income was generated from towage support for salvage and margins at our towage joint ventures also showed an improvement.
Profitability at the Ship Agency continued to benefit from the devaluation of the $Real as most of the divisions revenues is in US dollars while costs are predominantly $Reais denominated.
Tecon Rio Grande continued to perform well with revenue increasing in both $Reais and sterling terms. Operating margins were marginally lower due to increased depreciation following completion of the expanded terminal. Business at Tecon Salvador continues to develop although more slowly than expected. Our joint venture bonded warehouse Eadi Santo Andre made good progress with both revenues and profit increasing in sterling terms.
In the six months to 30 June 2001 the $Real devalued 18% against the US dollar (from 1.95 to 2.30) and 11% against sterling (from 2.91 to 3.25). The Group's Brazilian subsidiaries have significant borrowings in US dollars and $Real denominated loans that are monetarily corrected by the movement in the US dollar / $Real exchange rate. The Group assumes this risk as there is no long-term financing denominated in $Reais available to us for capital expenditure. Current interest rates on $Reais commercial borrowings in Brazil are 25% per annum. Due to the prohibitive cost of hedging the $Real the Group does not hedge its net exposure. The devaluation of the $Real against the US dollar has generated a large $Real denominated loss on the Group's US dollar and US dollar linked loans of £8,826,000 (2000 - £487,000). The cashflow effect of these losses in $Reais is only realised when repayments are made over the life of the loans, up to 12 years. The average maturity is 9 years. The priority for management is to raise our $Real tariffs in order to service the increased $Reais debt repayments.
The loss before taxation was £2.4 million (2000 - £4.4 million profit). Excluding exchange losses on foreign currency borrowings and non recurring items included in the operating profit, the profit before tax was unchanged at £5.8 million (2000 - £5.6 million).
The loss per share based on ordinary activities after taxation and minority interests of 2.97p (2000 - Earnings per share 5.98p) reflected the negative impact of the exchange losses on foreign currency borrowings on the Group's results. The board has resolved that an interim dividend of 1.00p per share be paid on 2nd of November, 2001 to shareholders on the register at close of business on 12th October 2001.
Cash flow
Net cash inflow from operating activities during the period remained strong at £7.0 million (2000 - £4.8 million).
Group Net Assets.
At 30th June 2001 Group net assets amounted to 155.94p per share (31st December, 2000 - 164.73p) of which 78.05p (31st December 2000 - 86.08p) was attributable to assets located in Brazil and 77.89p (31st December 2000 - 78.65p) in other, primarily financial assets outside Brazil. At 19 September 2001 the total of the investment portfolio and cash balances held outside Brazil was approximately £25.8 million (73.0p per share).
Share repurchases
During the period the Group repurchased and cancelled a further 2.08 million shares at an average price of 81.3p per share. Consequently as at 25th September the number of shares in issue is 35,363,040.
Management
After 37 years of service to the company and having reached the age of 60, Mr Claudio Marote is retiring as Managing Director of the Group. We are delighted that he has agreed to remain on the board so the company will continue to benefit from his intimate knowledge of the Brazilian towage market. We are pleased to announce that Mr Cezar Baião, currently Finance Director has been appointed a Director of the Holding company and will assume responsibility of Managing Director from 31 October of this year. Mr Keith Middleton the Group Finance Director will assume responsibility for the finance function in the Brazilian subsidiaries.
Future Prospects.
The operating result for July and August are in line with the same period in 2000. Our insurance underwriting subsidiary operating at Lloyds is likely to suffer some losses as a result of the terrorist attack on the World Trade Centre. Our liability is limited to approximately £1.0 million.
The board will review the level of the final dividend payment to be announced in April 2002 in the light of trading conditions and the performance of the $Real which has fallen a further 19% against sterling to 3.98. If this exchange rate is maintained at the year end this will adversely impact the Groups results."
J F Gouvêa Vieira,
Chairman