Michael See Kian Heng, Group Executive Director of Singapore-based offshore vessel owners & shipbuilders Otto Marine, says that his company reported revenue of US$512.0 million in year 2013, an increase of 36.8% over US$374.4 million in 2012. The shipping and shipyard segments were the main contributors to 2013’s revenue at 51.9% and 43.5% respectively. Excerpts from the firm's financial report follow:
Revenue from the shipping segment remained stable at US$265.6 million in 2013. As at 31 December 2013, the Group’s fleet has expanded to 65 vessels, consisting of 23 owned vessels, 35 chartered in vessels and 7 vessels held with strategic partners. During the year, our fleet profile was significantly enhanced with the additions of Go Phoenix and Go Pegasus, which will be deployed to the North Sea.
In a broad stroke, the Group has observed a marginal increase in charter rates and utilisation rates in 2013. However, due to the timing of vessel sales and additions, this improvement was not reflected in the segment revenue. The Group secured charter contracts amounting to a total of US$253.2 million in 2013, building on to our presence in Australia and North Sea, and venturing into new markets such as Indonesia and Malaysia.
The shipyard segment witnessed a rebound in 2013, generating revenue of US$222.8 million compared to US$55.4 million in 2012. In addition, the level of activity for shipyard works were higher during the year. Consequently, gross profit for the segment improved from a gross loss of US$25.8 million in 2012 to gross profit US$11.8 million in 2013.
With the change in the Group’s strategic direction, we anticipate that shipyard utilisation will be raised significantly. However, the focus is to provide repair and maintainance services to our fleet. Nevertheless, the release of capacity arising from the delivery of the complex vessels in 2013 leaves room for the Group to secure third party vessel construction, ship repair and conversion, and fabrication jobs on a selective basis
Strengthened Balance Sheet
The Group’s financial position improved significantly during the year. Notably, working capital requirements eased as the construction of the ultra large and high specification vessels nears completion.
Cash flow generated from operating activities was strong at US$114.9 million compared to US$62.1 million in 2012. As such, the Group took the opportunity to deleverage with the full redemption of S$100 million (approximately US$83.2 million) including interest on our three year Medium Term Notes programme.