Otto Marine's Q3 net profit halved in absence of one-off gain

Mainboard-listed Otto Marine reported on Friday that its net proft for the three months ended September 30, 2014, fell by 50.9 per cent to US$2.0 million compared to the same period a year ago, primarily due to a one-off gain from disposal of assets registered in the corresponding quarter last year.

Group revenue for the third quarter of this year rose by US$13.9 million, or 16.8 per cent year-on-year to US$96.8 million as all three segments generated higher revenue.

Shipyard revenue increased US$4.4 million, boosted by more repairs and fabrication orders. Offshore chartering revenue increased US$8.8 million supported by higher daily charter rate. Subsea services revenue increased US$0.8 million due to the addition of one vessel.

Other income fell 86.4 per cent to US$1.1 million, largely due to a decrease in net foreign exchange difference and a reduced gain on disposal of property, plant and equipment, partially offset by a reduction in forward contract exchange loss.

The third quarter saw a strengthening order book for the offshore chartering segment and stronger demand for the group's larger vessels, the comany said. It said it has begin divesting out of smaller offshore support vessels (OSVs) to focus on larger tonnage vessels for greater utilisation and returns.

"Over the longer term, the recent decrease in oil price from above US$100 to US$80 per barrel has created significant uncertainty for new exploration and development activities. Any prolonged slowdown in investment in E&P activities will ultimately affect the OSV market," it warned.