Otto Marine

Otto Marine: Poor set of results, which was in-lin with its profit warning earlier this mth. Rev at $119.8m, +35.4% yoy and net profit at -9.0m vs profit of $5.5m yoy. Gross margins fell at 5.9% vs 14.3% yoy. Overall performance saw external rev increased by US$31.3m contributed primarily by the chartering segment partially offset by the shipbuilding and leasing segment. Shipbuilding, ship repair and conversion decreased US$24.5m as a result slower progress of work on existing vessels sold to external customers and smaller order book. Chartering rise in rev (US$57.5m) was contributed primarily by Go Marine Group (US$55.4m) and an enlarged fleet (US$2.1m). Go Group was consolidated in the last qtr in FY11. The decrease in leasing revenue (US$1.8m) is due to the sale of two of the vessels in the leasing segment. Going forward, grp note that Global economic conditions as well as the general environment of the shipbuilding industry remain challenging and aims to actively grow its shipbuilding order book, focus on the completion of vessels-under-construction as well as seek to strengthen its balance sheet and (ii) improve cash flow positions.