London, UK, 22 October 2022

Ocean Wilson Holdings (OCN): Adverse financial markets but PORT3 is doing well

Ocean Wilsons (OCN) reported in its Q322 trading update that its investment portfolio's (OWIL's) NAV had declined by 19.5% year to date due to the current difficult financial markets (eg the MSCI World Index fell by 25%). However, Wilson Sons (PORT3), the listed Brazilian maritime company in which OCN has a controlling 57% stake, saw its quarterly PBT grow 20% y-o-y in US dollar terms. The towage and offshore vessels divisions (two of PORT3's three key divisions) continue to have positive operating trends. The third division, container terminal ports, is still experiencing the headwinds of a global logistics bottleneck but the situation is expected to improve in the coming quarters. Despite the decline in OWIL's NAV, OCN is trading at a 52% discount to the look-through value of its stake in PORT3 and the OWIL portfolio. This rises to 58% if we use our fair value for PORT3.

Container terminals ports had a 10.4% y-o-y decline in full containers handling. We forecast a 10.6% y-o-y decline for FY22 so there was little surprise in these numbers. One of the key global logistics problems is the lack of available empty containers and this has led to shipping lines being cancelled. Most of the impact has been felt in the port of Rio Grande in southern Brazil, where container volumes fell by 16%.

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