Otto Marine

Otto Marine: Shocking 1Q14 results, as net profit turned into red with loss of US$14.4m from profit of US$0.3m a year before, while revenue halved y/y to US$77.2m (-42.6%), caused by absence of a sale of vessel in 1Q13 ($34.5m), lower utilization resulting from vessel docking for survey and re-position and mobilization of vessels, partially offset by higher charter rates in the subsea segment. The bottom line was also plagued by loss on disposal (US$0.7m) and FX loss (US$4.2m). Gearing is high at 200%. Management sees a marginal increase in charter rates in the market, which are anticipated to improve in a tightening market, while cabotage rulings in the region have created attractive markets for both ship chartering and shipbuilding. NAV of US$0.07/share.