OTTO MARINE LIMITED
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OTTO MARINE LIMITED
DISCLAIMER
This presentation and the associated slides contain confidential information about Otto Marine Limited (the “Company”) and its subsidiaries and
associates (together with the Company, the “Group”).
By accepting such information, the recipient agrees to 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 the Company.
This presentation includes only summary information and does not 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, is made as
to, and no reliance should be placed on, the fairness, accuracy, reliability, completeness or correctness of the information or opinions contained
herein. Neither the Company, any other company within the Group or its advisors, nor any of their directors, officers or employees or any
representatives of such persons, shall have any responsibility or liability whatsoever (in negligence or otherwise) for any loss arising from any use
of the information or any other information or material discussed.
This presentation contains forward-looking statements relating to the business, financial performance and results of the Company. These
statements are based on current beliefs, expectations or assumptions and are subject to unknown risks and uncertainties that could cause actual
results, performance or events to differ materially from those described in such statements. These risks, uncertainties and other factors include, but
are not limited to, economic conditions globally, the impact of competition, political and economic developments in countries in which the Group
operates and regulatory developments in those countries and internationally, foreign exchange rates, oil and gas prices and the completion of
ongoing transactions. Many of these factors are beyond the Company's ability to control or predict. Although the Company believes that its
expectations and the information in this presentation were based upon reasonable assumptions at the time when they were made, it can give no
assurance that those expectations will be achieved or that the actual results will be as set out in this presentation.
Nothing in this presentation constitutes and shall not in any circumstances be construed as an invitation or an offer to purchase or the solicitation
of an offer to purchase any securities issued by the Company or any advice or recommendation with respect to such securities and no part of this
presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
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OTTO MARINE LIMITED
• Overview of Otto Marine
• Investment Merits
• Business Segments
• Financial Highlights
• Industry Outlook, Growth Strategies
3
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1. Overview of Otto Marine
Corporate Presentation
OTTO MARINE LIMITED
4 4
OTTO MARINE LIMITED
•
Offshore Marine Group - in Shipbuilding / Repair &
•
Headquartered in Singapore – commercial, procurement,
•
Shipyard in Batam Indonesia – strong management and
•
Strategic direction – provider of specialised offshore vessels
•
Customers – primarily specialised offshore service providers in
Conversion, Chartering and Specialised Offshore Services
and treasury support to our overseas operations (Indonesia,
China, UAE, etc)
engineering team capable of delivering complex and deep water
offshore vessels
and services in niche technical segments (i.e. seismic, subsea,
offshore construction, etc.)
niche segments, and fleet operators in the O&G industry
5
OTTO MARINE LIMITED
Share price (Closing on 10 Nov 2010)
S$0.35
Market capitalization
S$661.7 million
52 week high / low
S$0.295 / S$0.575
P/B
1.35
Net Gearing
0.90
Number of shares
1,890,429,000
Major shareholders
Yaw Chee Siew (63.38%)
Lee Kok Wah (5.28%)
Standard Chartered (4.30%)
6
OTTO MARINE LIMITED
2. Investment Merits
Corporate Presentation
OTTO MARINE LIMITED
•
Shipbuilding net order book of S$218m/US$169m (at 30 Sep 2010) –
•
Chartering revenue to provide steady cash flow – OSVs chartered on a
•
Specialised Offshore services – service and vessel provider in strategic
•
Reputable customer base – ABCmaritime, Esnaad, Falcon Energy Group
•
Strong engineering and experienced management team – average of 34
delivered 32 OSVs in the last 5 years worth US$624m
long term, bareboat basis
niche segments which command higher margin (i.e. seismic, subsea vessels for
well intervention, ROV, IMR, etc)
Limited, Mosvold Supply, Marine Subsea AS, Norshore Shipping, Robert Knutzen
Shipholdings
years experience in offshore vessels building
*(US$1.00 = S$1.29)
8
OTTO MARINE LIMITED
Reputable customer base includes:
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OTTO MARINE LIMITED
Front L to R: Reggie Thein (Director), Lee Kok Wah (President & Group CEO) and Yaw Chee Siew (Executive Chairman)
Back L to R: William Alastair Morrison (Director), Craig Foster Pickett (Director) and Ng Chee Keong (Director)
10
OTTO MARINE LIMITED
Front L to R: See Kian Heng (CFO) and Lum Kin Wah (COO)
Back L to R: Peter Jantzen (EVP), Chua Peng Chua (General Manager of PT Batamec) and David Lamb (CEO of Reflect)
11
OTTO MARINE LIMITED
3. Business Segments
Corporate Presentation
1212
OTTO MARINE LIMITED
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OTTO MARINE LIMITED
1414
OTTO MARINE LIMITED
5th largest AHTS builder globally
Target European / North Sea
market that require ABS or DNV
class vessels
44.0%
8.4%
7.8%
7.3%
6.7%
6.2%
Global customer base
− Mosvold Supply AS
− Norshore AS
− ABCmaritime
5.6%
4.5%
Dubai Nam Aker
Dry- Cheong
docks
3.4%
3.4%
Ship designs from renowned
Norwegian design houses
− Marin Teknikk AS
− Vik-Sandvik
2.8%
Sino- Otto ABG Yang- Kleven Fincan- Jaya Others
pacific Marine Ship- zhou Verft
tieri
Group
yard Dayang
Selective outsourcing
− Allows focus on sophisticated
vessels in Batam shipyard
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.
Source: Braemar Seascope Offshore as at 2008
15
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OTTO MARINE LIMITED
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
− Access to large pool of workers in Indonesia
− Only 1 hour away from Singapore by ferry
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OTTO MARINE LIMITED
Land area of 64 hectares
Waterfront of 650 meters
1 dry dock
2 slipways (under construction)
Syncrolift
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OTTO MARINE LIMITED
What is it
• Large lifting system, which raises and
lowers vessels in and out of the water for
dry-docking ashore
• Allows construction and repair of up to 16*
vessels at one time
What it
does
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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OTTO MARINE LIMITED
2424
Investor Relations Contact : Kamal Samuel | Tel: 6438 2990 | Email: kamal@financialpr.com.sg
OTTO MARINE LIMITED
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Offshore Service that provides better margin and enhance our performance
25
OTTO MARINE LIMITED
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
OTTO MARINE LIMITED
4. Financial Highlights
Corporate Presentation
2727
OTTO MARINE LIMITED
Revenue
(SGD millions)
486.6
80.3
129.7
483.6
314.0
147.3
2006
2007
425.2
2008
1Q2010
2009
2Q2010
276.6
9M2010
3Q2010
Net Profit
(SGD millions)
50.1
60.0
41.9
20.2
2006
2007
2008
1Q2010
2Q2010
8.3
17.3
52.0
24.5
2009
9M2010
3Q2010
28
OTTO MARINE LIMITED
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OTTO MARINE LIMITED
Revenue
(SGD millions)
9M2010 vs. 9M2009 Revenue
Revenue increased by 53.0% to S$486.6 mil from S$318.0 mil due to:
•
(To be explained in segmental breakdown)
Gross Profit and Gross Profit Margin
(SGD millions)
%
9M2010 vs. 9M2009 Gross Profit & Gross Profit Margin
Gross Profit increased 64.8% to S$96.8 million
Gross Profit Margin up from 18.5% to 19.9%
32
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OTTO MARINE LIMITED
Net Profit (att.to shh.) and Net Profit Margin
(SGD millions)
%
9M2010 vs. 9M2009 Net Profit & Net Profit Margin
Net Profit surged 17.5% to S$49.9 mil & Net Profit Margin
decreased from 13.4% to 10.3% due to:
•
Decrease in other income by S$3.1 mil primarily due to decline
in net foreign exchange gain and write back of reversal of
unrealized profit for sale of vessels to associates partially offset
by forfeiture of deposits
Other expenses swells to S$27.5 mil from S$2.4 mil due to
increase in foreign exchange losses (S$18.3mil), reversal of
unrealized profit for sale of vessels to associates (S$3.0mil)
and S$4.0 mil loss arising from fair value changes of currency
swaps
•
•
Increase in selling and administrative expenses and finance
costs by S$2.5 mil and S$5.0 mil respectively
33
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OTTO MARINE LIMITED
Revenue and Gross Profit
(SGD millions)
(SGD millions)
Revenue surges 36.1% to S$416.3 million
and gross profit improves to S$69.3 million
from S$51.9 million:
(#
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• Due to
the progress of work achieved for number of
vessels with sales contract for which revenue is
recognised based on the % completion method
36
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OTTO MARINE LIMITED
Revenue and Gross Profit
(SGD millions)
(SGD millions)
( #
) " * "'%
Revenue surges 123.8% to S$27.0 million
and gross profit improves from S$6.8 million
to S$21.0 million:
• Due to
increased fleet size
37
OTTO MARINE LIMITED
Revenue and Gross Profit
(SGD millions)
Reflect Geophysical generated S$43.3 million
of Revenue and S$6.5 million Gross Profit
( #
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(Reflect business commenced operations in
4Q2009)
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38
OTTO MARINE LIMITED
5. Industry Outlook
Growth Strategies
Corporate Presentation
*
+
(
OTTO MARINE LIMITED
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
40
% #
OTTO MARINE LIMITED
• 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
41
OTTO MARINE LIMITED
OTTO MARINE LIMITED
6. Thank You
Q&A
Investor Relations Contact : Kamal Samuel | Tel: 6438 2990 | Email: kamal@financialpr.com.sg
4242