Otto Marine's Q3 net profit halved in absence of gain from disposal of assets

OTTO Marine's net profit was about halved from US$4.12 million to US$2.02 million for the third quarter ended Sept 30, as the corresponding quarter last year was lifted by a one-off gain from disposal of assets.

This was despite revenue for the quarter jumping 16.8 per cent year on year to US$96.82 million on stronger contributions from all segments, while earnings per share worked out to 0.05 US cent, down from 0.11 US cent.

Other income in Q3 2014 slumped 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.

Meanwhile, share of profit of associates and joint ventures came to US$1.65 million, versus a loss of US$103,000 previously.

Q3 saw a strengthening order book for the offshore chartering segment and stronger demand for the group's larger vessels, Otto said. The group has commenced the process of 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," Otto warned.