HALF-YEARLY REPORT 30.06.2008

 

Wilson ASA - Business idea

Wilson`s main activity is the chartering and operation of small dry bulk vessels between 1,500 and 10,000 dwt in the European short sea trade. Wilson is a premier player in this market. Per 20.08.2008 the Wilson system is operating 108 ships, whereof 77 are owning-wise controlled by the company.
Wilson`s strategy is to offer Norwegian and European industry competitive, reliable, flexible and long-term transportation services. By controlling large contract volumes and long-term contract portfolios Wilson may optimize vessel operations and secure stable and long term income levels.

Result 2nd quarter 2008

During the 2nd quarter 2008 the company achieved freight income on TC basis of MNOK 310 compared to MNOK 257 in the 2nd quarter 2007. The company has had a higher activity level during the current quarter from more ships in operation than in 2007, but the increase is also due to higher nominations under the contracts, a good spot market and further improvements in fleet utilization.

The company`s operating cost (excl. depreciations) is MNOK 180 in the quarter compared to MNOK 159 in
the 2nd quarter 2007. Crewing cost and other operating cost ships shows a total increase of MNOK 26 which is reflecting a higher activity level as well as a general cost increase. TC and BB hire cost has been reduced due to fewer hired ships.

Operating result before depreciations (EBITDA) is MNOK 136 in the quarter compared to MNOK 106 in the 2nd quarter 2007.

Net finance cost is totalling MNOK 18 in the 2nd quarter 2008 compared to MNOK 17 for the 2nd quarter 2007. Value changes in financial instruments give a positive contribution of MNOK 10 in the quarter, an improvement of MNOK 22 compared to 2nd quarter 2007. Currency translation shows a net loss of MNOK 6 compared to a net gain of MNOK 4 in the 2nd quarter 2007. Net interest cost is charging the results with MNOK 20 in the quarter, an increase of MNOK 8 compared to the corresponding period in 2007.

The company`s result before minority and calculated tax is MNOK 77 in the 2nd quarter 2008 compared to MNOK 56 for the 2nd quarter 2007.


Market

In the quarter the company has had stable earnings from the contracts and the COA-share of the total sailing days is 68 % compared to 71 % in the 1st quarter 2008 and 66 % in the 2nd quarter 2007. Earnings are improving compared to the previous quarter, both from contract cargoes and from spot cargoes.

The activity level measured as the number of sailing days shows a decline of 2 % during the quarter compared to the 1st quarter. The decline may be ascribed in main to increased docking activity in the period.


Financing and capital structure

Interest bearing mortgage- and leasing obligations per 30.06.2008 in the balance is totalling MNOK 1,110 compared to MNOK 1,064 per 31.03.2008 and MNOK 905 per 30.06.2007. The company`s booked equity is MNOK 634 compared to MNOK 620 per 31.03.2008 and MNOK 578 per 30.06.2007. Booked equity ratio is thereby 28.2 % compared to 28.4 % per 31.03.2008 and 30.7 % per 30.06.2007.

A major refinancing of the fleet has been carried through by the company during the quarter. Amongst others it has been established a facility of the type `Reducing Revolving Credit Facility` where any drawdown is regulated directly by the company within agreed criteria. The loan has 7 years duration and has half yearly down payments of MNOK
45. Per 30.06.2008 the unused share under the facility was MNOK 125.

The company`s cash deposit per 30.06.2008 is MNOK 49 compared to MNOK 38 per 31.03.2008 and MNOK 107 per 30.06.2007. Per 30.06.2008 the company has an unused credit facility of MNOK 50 and the drawing
facility mentioned above.


Investments

During the 2nd quarter the company has not entered into any agreements regarding purchase of new tonnage.

The previously published contract with the Chinese building yard Shandong Baibuting Shipbuilding Co Ltd (Rong Cheng, China) for the building of a series of 8 bulk ships à 4.500 dwt was made effective 10th June 2008. The ships will be delivered from mid 2010 until primo 2012 and has a total cost price of around MNOK 475 depending on
rate of exchange.


Order reserves

Wilson`s contract coverage is satisfactory and the order reserve per 30.06.2008 is ca NOK 1.5 billions. The order reserve is defined as the expected future shipment commitments under the current Contracts of Affreightment (COA) during the agreed contract period. The company has long lasting and good relations to the customers with close to 100 % success rate in contract renewals.


Prospects

The Board of Directors have positive expectations to the income level from the first half year to be maintained also during the second half year. Looked at in isolation the Board of Directors expects a moderate decline in the earnings from the 2nd to the 3rd quarter due to normal seasonal variations. The activity level is expected to continue to be maintained on a high level.


Central risk- and uncertainty factors for the next half year

Market risk.
Demand; a general reduction in the demand of the company`s services will affect the company`s earnings negatively. Even in the short term reduced volumes from the contract customers will negatively affect company earnings during the second half-year compared to the first half-year 2008. The company has no indications of such drop
in demand.
Contract renewals; Contract renewals are done throughout the year, but the major part of the renewals are done during the 4th quarter. The outcome of the renewals will affect the company`s earnings in the period after the renewal.

Financial risk.
Rates of exchange; a strengthening of USD will affect the financial items positively, but will be negative for the company`s operating expenses expressed as NOK.

Financial obligations from sales options; external shareholders in the subsidiary company Nesskip hf may declare sales option on their shares, which would entail a payment obligation for the company. Per 30.06.2008 this obligation was MNOK 82. If this payment obligation was to become due this would affect the total investment capacity for the
company. The company has no indications as to whether the external shareholders will exercise their option during the second half year in 2008.

Operational risk;
The company`s two new building programs are both expected to be started during the second half-year. Satisfactory building supervision is in place.


Major transactions by related parties during the first half year 2008

In January 2008 the board member Gudmundur Asgeirsson received settlement for a sale of 10 % of the shares in Nesskip hf according to a sales option being exercised. The sales option exercised was published via the stock exchange on the 11th July 2007.

There have been no further transactions with related parties in the period 1st January and until 30th June 2008.


Responsibility statement

We confirm to the best of our knowledge that the condensed set of financial statements for the period 1 January to 30 June 2008 has been prepared in accordance with IAS 34 Interim Financial Reporting and gives a true and fair view of the company`s consolidated assets, liabilities, financial position and result for the period viewed in their entirety, and that the interim management report includes a fair review of any significant events that arose during the six-month period and their effect on the half-yearly financial report, any significant related partiestransactions and the description of the principal risks and uncertainties for the remaining six months of the year.



The Board of Directors in
Wilson ASA

Bergen, 20th August 2008



Kristian Eidesvik Katrine Trovik
Chairman Deputy chairman

Gudmundur Asgeirsson Eivind Eidesvik
Synnøve Seglem Bernt Daniel Odfjell
Ellen Solstad
Nina Hjellestad
Employees` repr. (Deputy)

Øyvind Gjerde
Managing Director