Presentation Slides (1056 KB) - Otto Marine Limited

OTTO MARINE LIMITED 

Click to edit OTTO Master MARINE text stylesLIMITED 

Second 

Charting 

level 

New Chapters of Growth 

Third level 

Fourth level 

Fifth level 


DISCLAIMER 

Thispresentation and the associated slidescontain confidential information about Otto Marine Limited (the “Company”) and itssubsidiariesand 

associates(together with the Company, the “Group”). 

By accepting such information, the recipient agreesto keep permanently confidential all information contained herein and that it will use such 

information only for the purpose it has disclosed to the Company for participating in this presentation and not for other purposes and will not 

divulge any such information to any other party without the express consent of the Company. Any reproduction of such information, in whole or 

in part, is prohibited without the permission of theCompany. 

Thispresentation includes only summary information and doesnot purport to be comprehensive. The information contained in this presentation 

has not been subject to independent verification. No promise, guarantee, representation, warranty or undertaking, express or implied, ismade as 

to, and no reliance should be placed on, the fairness, accuracy, reliability, completeness or correctness of the information or opinionscontained 

herein. Neither the Company, any other company within the Group or itsadvisors, nor any of their directors, officers or employees or any 

representativesof such persons, shall have any responsibility or liability whatsoever (in negligence or otherwise) for any lossarising from any use 

of the information or any other information or materialdiscussed. 

This presentation contains forward-looking statements relating to the business, financial performance and results of the Company. These 

statementsare based on current beliefs, expectationsor assumptionsand are subject to unknown risks and uncertaintiesthat could cause actual 

results, performance or eventsto differ materially from those described in such statements. These risks, uncertaintiesand other factorsinclude, but 

are not limited to, economic conditions globally, the impact of competition, political and economic developmentsin countriesin which the Group 

operates and regulatory developments in those countries and internationally, foreign exchange rates, oil and gas pricesand the completion of 

ongoing transactions. Many of these factors are beyond the Company'sability to control or predict. Although the Company believes that its 

expectations and the information in thispresentation were based upon reasonable assumptionsat the time when they were made, it can give no 

assurance that those expectations will beachieved or that the actual results will beasset out in this presentation. 

Nothing in this presentation constitutes and shall not in any circumstances be construed asan invitation or an offer to purchase or the solicitation 

of an offer to purchase any securitiesissued by the Company or any advice or recommendation with respect to such securities and no part of this 

presentation shall form the basisof or be relied upon in connection with any contract or commitment whatsoever. 

2


• Overview of Otto Marine 

• Investment Merits 

• Business Segments 

• Financial Highlights 

• Industry Outlook, Growth Strategies 

3 

Click to edit Master text styles 

Second level 

Third level 

Fourth level 

Fifth level 

1. Overview of Otto Marine 

Corporate Presentation 


4 4


• Offshore Marine Group - in Shipbuilding / Repair & 

Conversion, Chartering and Specialised Offshore Services 

• Headquartered in Singapore – commercial, procurement, 

and treasury support to our overseas operations (Indonesia, 

China, UAE, etc) 

• Shipyard in Batam Indonesia – strong management and 

engineering team capable of delivering complex and deep water 

offshore vessels 

• Strategic direction – provider of specialised offshore vessels 

and services in niche technical segments (i.e. seismic, subsea, 

offshore construction, etc.) 

• Customers – primarily specialised offshore service providers in 

niche segments, and fleet operators in the O&G industry 

5 

 


Share price (Closing on 14 Feb 2011) 

Market capitalization 

S$0.32 

S$604.9 million 

52 week high / low S$0.315 / S$0.535 

P/B 1.29 

Net Gearing 1.04 

Number of shares 1,890,429,000 

Major shareholders Yaw Chee Siew (63.38%) 

Lee Kok Wah (5.28%) 

Standard Chartered (4.30%) 

6


2. Investment Merits 


 


• Shipbuilding net order book of S$168m/US$131m (at 31 Dec 2010) – 

delivered 32 OSVs in the last 5 years worth US$624m 

• Chartering revenue to provide steady cash flow – OSVs chartered on a 

long term, bareboat basis 

• Specialised Offshore services – service and vessel provider in strategic 

niche segments which command higher margin (i.e. seismic, subsea vessels for 

well intervention, ROV, IMR, etc) 

• Reputable customer base – ABCmaritime, Esnaad, Falcon Energy Group 

Limited, Mosvold Supply, Marine Subsea AS, Norshore Shipping, Robert Knutzen 

Shipholdings 

• Strong engineering and experienced management team – average of 34 

years experience in offshore vessels building 

*(US$1.00 = S$1.29) 

8


Reputable customer base includes: 

9 

 


Front L to R: Reggie Thein (Director), Lee Kok Wah (President & Group CEO), Yaw Chee Siew (Executive Chairman) and 

Heng Hock Cheng @ Heng Heyok Chiang (Director) 

Back L to R: William Alastair Morrison (Director), Craig Foster Pickett (Director) and Ng Chee Keong (Director) 10


Front L to R: See Kian Heng (CFO) and Lum Kin Wah (COO) 

Back L to R: Eric Ang (General Manager ,UAE), Chua Peng Chua (Senior VP, PT Batamec) and David Lamb (CEO of Reflect) 

11 


3. Business Segments 


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1414


5 th largest AHTS builder globally 

8.4% 

7.8% 

7.3% 

Nam A ker 

Cheong 

6.7% 

Dubai 

Drydocks 

Sinopacific 

Group 

6.2% 

5.6% 

4.5% 

Otto ABG 

Marine S hipyard 

Yangzhou 

Dayang 

3.4% 

3.4% 

2.8% 

Kleven Fincantieri 

Jaya 

Verft 

44.0% 

Others 

Note: Ten shipyards which have ~ 56% market share of global order 

book in AHTS vessel construction. Remaining 44% is shared by > 

35 yards, predominantly in China. 

 

 

 

 

Target European / North Sea 

market that require ABS or DNV 

class vessels 

Global customer base 

− Mosvold Supply AS 

− Norshore AS 

− ABCmaritime 

Ship designs from renowned 

Norwegian design houses 

− Marin Teknikk AS 

− Vik-Sandvik 

Selective outsourcing 

− Allows focus on sophisticated 

vessels in Batam shipyard 

Source: Braemar Seascope Offshore as at 2008 

15 

! 


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, Indonesia 

Own and operate PT. Batamec - 64 hectare 

shipyard in Batam 

Major South-East Asian shipbuilding hub 

− 

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Access to large pool of workers in Indonesia 

Only 1 hour away from Singapore by ferry 

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Land area of 64 hectares 

Waterf ront of 650 meters 

1 dry dock 

2 slipway s (under construction) 

Sy ncrolif t 

18

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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 

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23 


Investor Relations Contact : Kamal Samuel | Tel: 6438 2990 | Email: kamal@financialpr.com.sg 2424


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Offshore Service that provides better margin and enhance our performance 

25 

% ** 


Reflect Resolution 

4 streamer 3D vessel 

Built in 1983, rebuilt in 1990 and 2006 

Operating for over 4 years in current 

configuration by Norfield 

3 Months Operation by Reflect 

Offshore Service that provides better margin and enhance our performance 

26


4. Financial Highlights 


1 1 

 


(SGD millions) 


Revenue 

0 

147.3 

0 

314.0 

579.9 

0 

0 93.3 

80.3 

129.7 

483.6 425.2 

276.6 

2006 2007 2008 2009 2010 

Net Profit (Loss) 

1Q2010 2Q2010 3Q2010 4Q2010 

37.6 

8.3 (12.6) 

20.2 41.9 60.0 52.0 17.3 

24.5 

2006 2007 2008 2009 2010 

1Q2010 2Q2010 3Q2010 4Q2010 

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Revenue 

 

 

 

 

 

 

 

 

 

93.3 

 

 

 

 

FY2010 vs. FY2009 Revenue 

Revenue increased by 36.4% to S$579.9 mil from S$425.2 mil due to: 

• (To be explained in segmental breakdown) 

Gross Profit and Gross Profit % Margin 


 

 

 

 

 

 

 

 

 

 

 

FY2010 vs. FY2009 Gross Profit & Gross Profit Margin 

Gross Profit increased 19.9% to S$90.8 million 

Gross Profit Margin down from 17.8% to 15.7% 

 

 

 

 

 

6

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


 

 

 

 

 

 

 

 

 

% 

 

 

 

FY2010 vs. FY2009 Net Profit & Net Profit Margin 

Net Profit decreased 22.3% to S$40.7 mil & Net Profit 

Margin decreased from 12.3% to 7.0% due to: 

• Increase in other expense by S$29.6 mil primarily due to 

increase in net foreign exchange loss and reversal of 

unrealized profit for sale of vessels to associates, advances 

written off and loss arising from changes in fair value of 

currency swap and interest rate swap contracts 

• Increase in selling and administrative expenses and finance 

costs by S$9.8 mil and S$7.4 mil respectively 

• Other income swells to S$18.7mil from S$7.4 mil due to write 

back of reversal of unrealised profits from sale of vessels to an 

associate and forfeiture of deposits. 

7 

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Revenue and Gross Profit 

 


 


 

 

 

 

 

 

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Revenue increases 18.7% to S$478.6 million 

while gross profit decreases to S$57.1million 

from S$64.5 million: 

•Due to reversal of profits recognised for the 

terminated sales contract s for vessels sold to an 

associate partially offset by the progress of work 

achieved for number of vessels with sales contract 

for which revenue is recognised based on the % 

completion method 

 

 

 

 

10

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) $ 

* #+#(& 

Revenue surges 116% to S$38.6 million and 

gross profit improves from S$11.6 million to 

S$30.3 million: 

•Due to increased fleet size 

 

 

 

 

 

 

11 

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) $ 

*#+#(&,# 

Reflect Geophysical generated S$62.6 million 

of Revenue and S$3.4 million Gross Profit 

(Reflect business commenced operations in 

4Q2009) 

 

 

 

 

 

 

12


5. Industry Outlook 

Growth Strategies 


* +) & 


MACRO 

• Tough market conditions appears to be tapering off slowly 

• Lower interest rates, improving liquidity 

INDUSTRY 

• Oil price stable at viable levels – O&G CAPEX increasing 

• Increasing enquiries for Sales / Charters 

• Oversupply in certain segments, depressing charter rates 

• Industry consolidation – speculative building removed 

• Easier to get equipments and cheaper too; also skilled personnel more 

available 

14

" 


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

remains strong 

• 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 

• Moving into specialised offshore services by leveraging on our network of 

global players in the deep water and subsea activities 

15 



6. Thank You 

Q & A 

Investor Relations Contact : Kamal Samuel | Tel: 6438 2990 | Email: kamal@financialpr.com.sg 1616

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