Otto Marine ppt 11 Aug 2011(2 of 2)ottomarine.listedcompany.com/newsroom/20110811_231431_G4F_BAC… · Source: OTTO MARINE LIMITED 1212. OTTO MARINE LIMITED 13 Expansion of Chartering

OTTO MARINE LIMITED

3. Business Segments

OTTO MARINE LIMITED

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Business Segments

Shipbuilding / Ship Repair and Conversion• Construction of complex, high-

spec & environment friendlyOSVs (e.g. AHTS, PSV,offshore construction vessel)

• Repair / conversion of widerange of vessels (e.g. OSVs,ocean-going tug)

• Sophisticated vessels for NorthSea operations that meet theABS or DNV class

• Owns 64 ha shipyard in Batam• Selective outsourcing to

China shipyards• Build-to-order

Ship Chartering• Two-pronged approach –

Strategic Partnerships and100% owned fleet

• Mainly deployed by customersin Singapore, Indonesia,Australia, West Africa andother South East Asiacountries

• Vessels are on medium to longterm time and bareboatcharters

SpecialisedServices• Service and vessel provider in

strategic niche segmentswhich command higher marginsuch as seismic and subseavessels

• Seismic operator – Reflect Geophysical

*Orient Explorer *Reflect Aries *Pacific Titan

• Subsea vessel provider, with ROV capabilities – Surf Subsea Inc

* Surf Challenger

OTTO MARINE LIMITED

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OTTO MARINE LIMITED

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Focus on high specifications and higher value vessels

Target European / North Sea market that

require ABS or DNV class

vessels

Global customer base:

- Norshore AS- ABCMaritime

- Mosvold Supply AS

Ship designs from renowned

Norwegian design houses- Marin Teknikk

AS - Vik-Sandvik

Selective outsourcing

- Allows focus on sophisticated

vessels in Batamshipyard

OTTO MARINE LIMITED

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Strategically Located Shipyard

Singapore

Headquarters

� Strategic advantage due to Singapore’s position as a regional marine and offshore industry hub

− Access to marine and offshore support

− Access to expertise

− Close proximity to SEA shipbuilding hub

− Ready supply of qualified Indonesian workers

Batam, IndonesiaOwn and operate PT. Batamec - 64 hectare shipyard in Batam

� Major South-East Asian shipbuilding hub

− Access to large pool of workers in Indonesia

− Only 1 hour away from Singapore by ferry

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OTTO MARINE LIMITED

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Shipbuilding: Complex Offshore Support Vessel

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One of the largest yards in Batam

� Land area of 64 hectares

� Waterfront of 650 meters

� 1 dry dock

� 2 slipways (under construction)

� Syncrolift

OTTO MARINE LIMITED

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The Syncrolift® : Increasing Efficiency of Yard

What is it

• Large lifting system, which raises and lowers vessels in and out of the water for dry-docking ashore

What it does

• Allows construction and repair of up to 16* vessels at one time

The Advantage

• Waterfront efficiency is multiplied • Much faster than using a drydock or

traditional vessel launch

*using 10,800 bhp vessels as a benchmark

OTTO MARINE LIMITED

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Shipbuilding: Strong Engineering Capabilities

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OTTO MARINE LIMITED

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Competitive Market Share

Batamec Shipyard -Ranked 8th in Asia AHT/AHTS newbuilds

Source: quoted from DnB NOR initiation report dated 1 February 2010

OTTO MARINE LIMITED

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Globally Recognised Sophisticated Yard

•Efficient operational capabilities and technical expertise elevates Otto’sposition as a sophisticated shipbuilder.

Source: http://www.standard-club.com/docs/MikeMeade.pdf

OTTO MARINE LIMITED

1212

OTTO MARINE LIMITED

13

Expansion of Chartering Operations (As at 30 June 2011)

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OTTO MARINE LIMITED

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Strategic Partnerships

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Investor Relations Contact : Kamal Samuel | Tel: 6438 2990 | Email: [email protected] 1515

OTTO MARINE LIMITED

16

Specialised Services

Offshore Service that provides better margin and enhance our performance

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OTTO MARINE LIMITED

4. Financial Highlights

OTTO MARINE LIMITED

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Results Summary: 1H2011

Revenue

Gross Profit / Loss

Operational Expenses

PATMI

62% S$155.0m

S$9.4m Loss

S$17.3m

S$31.3m Loss

10%

OTTO MARINE LIMITED

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Historical PerformanceRevenue

(SGD millions)

PATMI

(SGD millions)

155.0

(31.3)

OTTO MARINE LIMITED

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Segmental Performance 1H2011 vs. 1H2010

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OTTO MARINE LIMITED

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Segmental Performance 2Q2011 vs. 2Q2010

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OTTO MARINE LIMITED

22

Consolidated Balance Sheet

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OTTO MARINE LIMITED

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Consolidated CashflowStatement

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OTTO MARINE LIMITED

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Revenue Breakdown

Revenue (S$’mil)

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OTTO MARINE LIMITED

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Gross Profit Breakdown

Gross Profit & Margin

Gross Profit (S$’m) Gross Profit Margin

OTTO MARINE LIMITED

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Revenue and Gross Profit by Business Segments

Shipbuilding, Ship Repair and Conversion

Revenue decreased 74.4% to S$94.0 million while gross profit decreased from S$71.8

million to gross loss of S$17.1 million:•Due to less progress of work achieved with sales contract for which revenue is recognised based on

the % completion method

•The loss was mainly due to the reversal of profits recognised for the terminated sale contracts for the

two vessels

(SGD’000)

OTTO MARINE LIMITED

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Revenue increased 50.3% to S$24.2 million and gross profit improved from S$12.2 million

to S$14.6 million in 1H2011:•Due to enlarged fleet size


Ship Chartering

(SGD’000)

OTTO MARINE LIMITED

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Reflect Geophysical registered revenue of S$30.2 million, up 26.7% but incurred a S$7.4

million gross loss in 1H2011• Due to lower utilisation of seismic vessels

Subsea business contributed S$6.6 million in revenue and S$0.4 million in gross profit in

1H2011


Specialised Services

(SGD’000)

OTTO MARINE LIMITED

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Net Profit & Profit Margin

Net Profit (att.to shh.) and Net Profit Margin

1H2011 vs. 1H2010 Net Profit & Net Profit Margin

Net Profit decreased from S$41.2 million in 1H2010 to a net loss of S$31.3 million in 1H2011 & Net Profit Margin

decreased from 10.1% to (20.2)% due to:• Decrease in revenue in 1H2011 due to less progress work

achieved with sales contract

• Decreased profitability due to the reversal of profit recognised for the terminated sales contract for two vessels and reduction in gross profit from geophysical segment due to lower utilisation

of seismic vessels

(SGD’000)

OTTO MARINE LIMITED

5. Industry Outlook Growth Strategies

OTTO MARINE LIMITED

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Industry Outlook

� Soaring oil prices will excite O&G spending which will increase demand for OSV and PSV

8% growth previously, now expected 12% - 15%

Source: Graph A: DnB NOR initiation report dated 1 February 2010Graph B: http://www.dockwise4.com/annual2009/?id=14

CAPEX spending

Graph A Graph B

OTTO MARINE LIMITED

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Industry Outlook

� Otto Marine will stand to benefit from the recovery in the industry as players move towards deeper water

Source: Graph A: http://www.dockwise4.com/annual2009/?id=14Graph B: http://www.epmag.com/Magazine/2010/5/item58177.php

CAPEX development (includes next to drilling activities, also engineering, geosciences and support services)

Graph A

Graph B

Deepwater CAPEX by region

Potential demand for new builds!

OTTO MARINE LIMITED

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Growth Strategies

• Focus on the demand for offshore vessels for deep water operations which is

expected to improve gradually as the oil majors have increased their spending

and looking more towards deep-water drilling projects

• Ride on our strength as a premium builder to attract the top OSV operators

• Accelerate growth of chartering business to compliment cyclical nature of

shipbuilding business

• Strengthen our specialised services segment by leveraging on our network of

global players in the deep water and subsea activities

OTTO MARINE LIMITED

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Tackling Issues

Immediate Concern – 2 cancelled vessels (Hull No. 7048 and Hull No. 7049)

• Management is evaluating various options on hand to deal with the cancelled

vessels

• May either sell these vessels at market value or aim at amalgamating them in the

Group’s fleet to charter them out

• These very sophisticated vessels are sister vessels to ‘Deep Sea 1’ that recently

attained the coveted maritime class certification from DNV

• Already a number of enquiries for these vessels

• World market for this size AHTS has improved in the past months as evidenced by

the rise in the charter rates in the North Sea

OTTO MARINE LIMITED

6. Thank YouQ & A

Documents

Otto Marine ppt 11 Aug 2011(2 of 2)ottomarine.listedcompany.com/newsroom/20110811_231431_G4F_BAC… · Source: OTTO MARINE LIMITED 1212. OTTO MARINE LIMITED 13 Expansion of Chartering