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Otto Marine in the red for Q3, expects no improvement in market conditions
OFFSHORE marine group Otto Marine on Wednesday posted a loss of US$5.5 million for its third quarter ended Sept 30, 2015, compared to a profit of US$2 million a year ago.
Revenue fell 35 per cent to US$63 million. Otto Marine said that the revenue decline was across all segments. Revenue from its shipyards fell due to decrease in shipbuilding, fabrication and ship repair revenue in Q3. Shipping and chartering turnover fell because of a reduced fleet size and lower charter rates amid the current challenging market conditions. Subsea services revenue also fell on lower charter rates, despite increased utilisation.
Earnings fell as a result of the decrease in revenue, as well as an increase in depreciation from the capitalised dry-docking costs in 2014 for the shipping and chartering segment.
On the outlook, it said: "Amidst the persistent challenging market conditions, the group is focused on sustaining the vessels utilisation by stepping up efforts in improving its order book, while also concurrently rationalising its cost structure to remain competitive and relevant in the market.
"It is unlikely that market conditions in the oil and gas sector will improve significantly over the next 12 months."