Proactive Investors - Run By Investors For Investors

Ocean Wilsons sinks as softer towage business and exchange rates dent profits

The Brazil-focused marine services group said pre-tax profits had dropped to US$85.3mln from US$145.5mln in 2017, with revenues slipping to US$460.2mln from US$496.3mln
Port services
Ocean added that the offshore oil and gas market, which it supplies support services for, was facing “another difficult year” in 2019

Ocean Wilsons Holdings Limited (LON:OCN) shares sank in early deals on Friday after the marine services firm saw its profits dented by a softer performance at its tonnage business and exchange rate movements.

In the year ended 31 December, the Brazil-focused group said pre-tax profits had dropped to US$85.3mln from US$145.5mln in 2017, with revenues slipping to US$460.2mln from US$496.3mln.

Softer margins

The company blamed the profit slip on “softer” operating margins in its towage business, which pushed total operating margins down to 21.6% from 22.1% in the year, as well as a higher average US Dollar to Brazilian Real exchange rate, which prompted a revenue fall in dollar terms despite a 6% rise in the Brazilian currency.

The dividend for the year was unchanged at 70 US cents (53p) per share.

Looking forward, Ocean said competition in the Brazilian towage market where it operates “remains strong” and that the offshore oil and gas market, which it supplies support services for, was facing “another difficult year” with sluggish demand for both offshore vessel hire and new vessel construction.

J F Gouvêa Vieira, the company’s chairman, added that while factors “normally associated with recession” were not in place going into 2019 if a recession did occur emerging markets such as Brazil were “typically some of the worst hit”.

Shares were down 5.5% at 1,120p.

View full OCN profile View Profile

Related Articles

Aircraft
January 03 2019
In an update at the company’s annual meeting in November, investors were told lease income for the six months to the end of December will be in the order of US$58mln, up 39% year on year
cargo trucks
April 30 2019
Investors have been nervous about what effect Brexit might have on a UK-based transport group with a big presence in Europe, but Xpediator thinks demand for its services will be greater than ever
Copyright © Proactiveinvestors.com, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use