Singapore-listed offshore services provider Otto Marine has issued profit warning for its first quarter that ended on 31 March 2015 in its filing to the Singapore Exchange.
The company has attributed its losses for the first quarter mainly to the decrease in vessel utilisation and lower charter rates amid the current challenging market conditions, particularly for the oil and gas industry. In addition, Otto Marine expects further losses from provision and impairment cost.
Otto Marine has expected losses despite measures taken by the company to reduce cost in response to the market conditions. Thus, Otto Marine advises investors and shareholders to exercise caution when dealing with the shares of the company and, in case of doubt, to seek independent advices from professional or financial advisers.
Previously, Otto Marine was in the media limelight in defending itself against arbitration with a claim of USD8.8 million against its wholly owned Otto Ventures over the acquisition and operation of two offshore support vessels (OSVs).
The claimants, a holding company and its wholly owned subsidiary, have commenced arbitration proceedings with the Singapore International Arbitration Centre (SIAC) against Otto Ventures in an alleged breach of the term sheet by refusing to co-operate fully in securing the requisite financing for the vessels.
On the other hand, Otto Ventures informed the claimants of its intentions to terminate the term sheet as the claimants have failed to ensure the vessels were delivered within the contractually stipulated time and the joint-venture company’s failure to obtain financing.