CFO Michael See: Otto has a track record of building logistics vessels like bulk carriers, but wants to focus on high-spec vessels like offshore support or subsea vessels.

Gross profit increased 113.6% to S$89.6 million in 1H2010, translating to gross margins of 22.1% or an improvement of 5.1 percentage points margin-wise.

Current margins are more reflective of normal operating conditions as the previous period had been affected by 3 vessel cancellations, said Mr See.

1H10 gross profits were S$89.6 million

 

Net profit attributable to shareholders grew 19.2% to S$41.2 million, affected by a foreign exchange loss of S$24.8 million, of which S$19.7 million was unrealized.

The forex loss was due to the slide in the Euro (from US$1.43 on 31 Dec 2009 to US$1.23 on 30 Jun 2010).

Mr See expects the forex loss to be reversed in the coming quarter now that the Euro is recovering. It was US$1.32 as at 4 Aug.

Otto has been aggressive in expanding its new ‘special offshore services”.

Its flurry of corporate action for the new segment just last month alone includes the following:

On 2 Jun, Otto increased its stake in its seismic vessel-operating subsidiary, Reflect Geophysical, by 7.6% to 81.6%.

Reflect Geophysical was recently awarded a seismic data acquisition contract worth at least US$8 million from Anardarko Petroleum.

The customer is one of the largest independent oil and natural gas exploration and production companies in the world.

On 25 Jun, it took a 19.2% stake in US-based SURF Subsea, which recently procured from a liquidator a 292-feet Class 2 DP MSV worth US$55 million.

This vessel allows Otto to offer subsea and offshore construction work, in addition to its current seismic activities.

On 30 Jun, it took a 19.9% stake in Hako Offshore for S$4.8 million in cash.  Hako Offshore is integrated marine offshore services provider.

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