Otto Marine: No recovery in sight

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED

Research House: CIMB

Price Call: SELL

Target Price: 0.14

Otto Marine  [PDF] No recovery in sightOTML SP / OTTO.SI |  UNDERPERFORM - Maintained  |  Share Price S$0.14- Tgt. S$0.10 Offshore & Marine  | - by Zhi Bin YEO

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Otto is struggling to stay afloat.All of its business segments have underperformed. While FY11 could havemarked the bottom, we project it to remain in the red. Without a concretebusiness strategy to steer its way ahead, we advise investors to stay clearof the stock. 4Q core net loss was larger than expected (full-year at 286%).We now expect losses for FY12 and cut FY13 EPS by 40%. We also introduceFY14 numbers. We lower our target price, still at 0.6x CY12 P/BV (bottomend of its trading range). Maintain Underperform.



Source: CIMB 24 February 2012

Otto Marine Holdings rated 'underperform' by CIMB

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED

Research House: CIMB

Price Call: SELL

Target Price: 0.12

CIMB in a Jan 3 research report says: "To improve its cash flows (9M11 operating outflows of $143 million) and financial position, Otto has sold its 49% JV, West African Invest Ltd (WAIL), to Swiss Overseas Invest Ltd for US$26.6 million cash.

"Otto will book a profit of US$8.2 million, comprising US$0.6 million from the excess consideration of WAIL's net assets and US$7.6 million from the recognition of deferred gains-unrecognised profits when Otto sold its 51% stake in WAIL to ABC Maritime for US$30 million in 2007/2008. (Otto retained 49%, which is now being sold).

"Target price of 12 cents, still at 0.6x CY12 P/BV, a 15% discount to ASL Marine. Excluding disposal gains, we maintain our FY11 core loss (but reduce FY11 reported loss by 29%); andcutFY12-13 EPS by 23-41% as we erase contributions from the two vessels. MAINTAIN UNDERPERFORM."

Otto Marine Holdings rated 'underperform' by CIMB

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED

Research House: CIMB

Price Call: SELL

Target Price: 0.17

CIMB in a Sept 12 research report says: "Just a day after Otto delivered a US$24 million 8,000bhp AHTS to its 19%-owned affiliate Go Marine, the company secured another order for two 12,000bhp AHTS for US$77 million.

"Factoring in these new orders, we narrow our loss estimates for FY2011 by 27% and lift our earnings estimates for FY2012-2013 by 20-87%. However, these newbuild orders should not be judged as a reversal of fortune.

"We remain cautious given that Go Marine is not in a strong financial position while the back-end loaded payments under the contracts do not improve Otto's high net gearing. Unchanged target price of 17 cents, still based on 0.8x CY11 P/BV (20% discount in view of the quality of Otto's assets). MAINTAIN UNDERPERFORM."

Otto Marine rated 'neutral' by DMG

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

DMG & Partners Securities in an Apr 7 research report says: "Otto Marine (OM) has entered into a sales agreement to sell its Norwegian design MT6009 MKII DNV Class Platform Supply Vessel(PSV) for US$31.5 million (US$39.8 million) to Mermaid Maritime Australia.

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Otto Marine upgraded to 'neutral' by CIMB

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: CIMB

CIMB in a Mar 24 research report says: "GC Rieber, the initial customer for hull no. 7040 (3,200 dwt PSV), has agreed to novate its shipbuilding contract (third party replacing the original party as party to the contract) in favour of Aries AP.

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DMG ups Otto Marine to neutral, keeps $0.25 target

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

DMG & Partners has upgraded Singapore’s offshore marine firm Otto Marine (OTTO.SI) to neutral from sell following a sharp selldown in the shares but kept the target price at $0.25.

DMG believes Otto Marine shares has been “excessively beaten down”, following a 20% price drop since it reported a quarterly loss of $9.3 million.

While there are concerns such as Otto’s failure to secure major shipbuilding contracts from third parties over the past two years as well as the threat of orders cancellation, DMG said there were also potential upsides from the sale of chartering vessels.

Otto could also benefit from better utilisation of two seismic vessels owned by subsidiary Reflect Geophysical.

At 10:36 a.m., shares of Otto Marine were flat at $0.235. They had earlier risen 2.1% to $0.24.

Otto Marine rated 'hold' by Phillip Securities

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: Phillip Securities

Phillip Securities Research in a Feb 21 research report says: "Otto Marine reported FY2010 revenue of $579.9 million (+36.4% y-o-y) and net profit of $40.7 million (-22.3% y-o-y). The revenue was 10.1% below our estimate of $645.2 million while the net profit was 31.9% lower than our forecast of $59.7 million.

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Otto Marine off 6.7%; orderbook risk

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

Otto Marine (G4F.SG) is down 6.7% at $0.280, falling sharply for the second straight session in heavy volume after its 4Q results Friday showed a loss of $9.3 million.

DMG downgrades the stock to Sell and cuts its target price to $0.25 from $0.335. “The shipbuilding segment was the biggest drag...with a gross loss of $12.2 million due to the reversal of profit and forex loss. Excluding those items, we estimate the shipbuilding segment would have turned in a gross profit of around $10 million.” 

The house reduces its FY11F-FY12F net profit estimates by 39%-43% respectively due to lower new shipbuilding order assumptions. BNP Paribas, which has a Reduce rating and $0.34 target, says the risk to its earnings estimates is skewed to the downside, as the current order book has high customer concentration risk and still faces potential cancellation risks.

“The imbedded risk factors are increasing, given the wide spread of unrelated operations,” it says. Orderbook suggests a $0.270 floor for the session. 

Otto Marine down 1.6%; posts 4Q loss on one-off items

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

Otto Marine (G4F.SG) is down 1.6% at $0.310 after reporting a 4QFY10 loss of $9.3 million compared with a net profit of $9.8 million a year earlier, with revenue down 13.0% on-year at $93.3 million, largely due to one-off items.

DMG notes these included a reversal of profits recognized for the terminated sale contracts for vessels sold to an associate in the shipbuilding, ship repair and conversion segment, and start up costs and a suboptimal utilization rate of vessels in the subsea services segment.

“Amongst the segments, the shipbuilding segment made a gross loss of $12.1 million while geophysical and subsea services made a gross loss of $3.2 million.” 

It adds, a rise in other expenses also contributed to the losses with a forex loss at $4.2 million, and advance write off of $2.5 million. 

While the house awaits an analyst briefing later today, it places its Neutral call and $0.335 target price under review. Orderbook suggests $0.300 support. 

Otto Marine - Otto Marine cut to Neutral by DMG; Target $0.39

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

DMG downgrades Otto Marine (G4F.SG) to Neutral from Buy, cuts target price to $0.39 from $0.46, based on 10x blended FY10-11 earnings, says Dow Jones.



Changes follow reduction in FY10-12 earnings forecasts by 13.3%, 4.6%, 1.9% respectively to reflect order cancelation, fewer contract assumptions.



DMG notes Norwegian customer Mosvold Supply’s intention to cancel order for vessel being built by Otto: “The highly leveraged position of Mosvold Supply has made it difficult for the company to take delivery.”



Says Otto hasn’t secured any new shipbuilding contract so far this year. Shares up 1.4% at $0.375.

Otto Marine - Otto Marine cut to Underperform by CIMB; Cuts target

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: CIMB

CIMB downgrades Otto Marine (G4F.SG) to Underperform from Outperform, cuts target price to $0.30 from $0.48 after lowering FY11-12 earnings estimates by 31%-23%, according to Dow Jones.



Changes reflect risk of more order cancellations by Mosvold, which accounts for 45% of shipbuilder’s orderbook. Notes Mosvold’s cancellation of its first anchor handling, towing & supply order dragged down Otto’s share price in April: “We see cancellation risks in December 2010 and June 2011.”

Notes Mosvold set up during offshore & marine boom in 2007 as “pure and highly leveraged” vehicle to own, operate high-end, large AHTS vessels; “with its vessels under construction, Mosvold is not generating any operating cash flow.” Shares flat at $0.37.

Otto Marine - Otto Marine cut to Hold vs Buy by Phillip Securities

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: Phillip Securities

Phillip Securities downgrades Otto Marine (G4F.SG) to Hold from Buy, cuts target price to $0.40 from $0.58 based on 1.40x P/B vs 1.95x previously, according to Dow Jones.



Phillip says company’s chartering, specialised offshore services businesses expected to continue growing for next 3 years, but chartering rates may decrease as new vessels enter market.

“We are (also) concerned that Otto Marine may see weakness in its shipbuilding segment next year as its order book has been declining due to a lack of new orders,” says research house. Shares off 1.2% at $0.405.