Ocean Wilsons Holdings Ltd (LON:OCN) is an investment holding company that offers investors an unusual proposition: a controlling interest in a long-established Brazilian maritime services company (Wilson Sons) and a diversified investment portfolio, both run with a long-term view. While the trading background in Brazil is challenging, this is factored into market thinking and Wilson Sons has demonstrated resilience. An investor in OCN also gains the diversification provided by the global portfolio and a substantial discount cushion (35% based on a look-through NAV).
Recent results: Currency and economic headwinds
OCN’s Wilson Sons subsidiary reported Q1 results in May, with the devaluation of the Brazilian real (-26.5% vs Q115) and the soft Brazilian economy holding back revenues and EBITDA (-26% and -25% respectively). The fact that nearly half of revenues are earned in dollars and costs are primarily in Brazilian reals mitigated the impact. At the net income level, a positive move in the Brazilian real in the first quarter gave rise to currency gains relating to monetary items, deferred taxes and loans and investments that resulted in a move from the $8.1m net loss recorded in Q115 to net income of $22.0m. The OCN investment portfolio generated a return of 1% during 2015, but the value reported for end April showed a decline of 1.9% from the year end following a turbulent period in equity markets.
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