Ocean Wilsons Holdings - Hit by markets, valuation eye-catching
Ocean Wilsons (OCN) reported a H122 loss of $34.7m (H121 profit of $39.5m), chiefly due to weak financial markets which led OCN’s international investment portfolio (OWIL) to report a $48.9m loss. Despite headwinds in the container terminal business, some good operating trends allowed Wilson Sons (PORT3) to boost OCN’s H122 revenue by 12% y-o-y and EBITDA by 2%. We are cutting our forecasts for FY22e (to a $14.8m net loss) and FY23e (22% EPS reduction). OCN is trading at 50% of the look-through value of its 56.5% PORT3 stake and OWIL portfolio. This discount seems excessive, especially as PORT3’s market valuation is undemanding. To further highlight this valuation gap, we have introduced a valuation range for PORT3; at the mid-point of the range OCN’s discount increases to 59%. OCN has a 6.8% dividend yield.Ocean Wilsons Holdings is a holding company. Through its subsidiaries, Co. is engaged in the provision of transport services; the activities of tug and port operator; the construction and building of ships; the provision of shipping agency and logistics services; the operation of warehousing and stevedoring; and investment holding and dealing. Co. carries out its business in Brazil, Bermuda and the United Kingdom, and organized its business into three segments: towage, offshore anad shipyard, port operations and logistics, and ship agency.
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