OTTO MARINE LTD (Company Registration Number 197902647M)
(Incorporated with limited liability in the Republic of Singapore on 5 September 1979)
RESPONSE TO SGX'S QUERIES REGARDING 2Q 2014 RESULTS
In response to the query from Singapore Exchange Securities Trading Limited ("SGX")
dated 13 August 2014, the Company wishes to provide the information as set out below:-
Query
Please provide a review of the material factors that affected the 2Q 2014 cash flow statement.
Compan y' s r esponse
The material factors that affected the 2Q 2014 cash flow statement are detailed below:
In 2Q 2014, the Group's cash used in operating activities amounted to US$18.0 million consisting of operating cash inflow before working capital changes of US$22.3 million and net cash outflow from working capital changes of US$40.3 million, income tax paid of US$0.2 million and interest received of US$0.2 million. Cash outflows from changes in working capital of US$40.3 million were primarily due to increases in trade receivables of US$34.4 million, construction work-in-progress US$13.0 million, finance lease receivables of US$10.9 million, inventories of US$32.4 million, trade payables of US$35.3 million and other payables of US$11.4 million and decreases in other receivables of US$3.7 million. The increase in trade receivables was as a result of the invoices for sale for vessels pending collection while the increase in finance lease is resulting from the leasing of a vessel from the Group to a customer in 2Q 2014. The increase in inventories and construction-work-progress resulted from progressive work performed on vessels under construction. The increase in trade payables is due to slower in payment to suppliers.
In 2Q 2014, the Group's net cash used in investing activities amounted to US$48.6 million
arising mainly from capital expenditure spending on fixed assets.
In 2Q 2014, the Group's net cash from financing activities amounted to US$4.7 million consisting of proceeds from bank borrowings amounting to US$116.8 million partially offset by repayments of bank borrowings and finance lease obligations of US$75.7 million and US$1.4 respectively, dividends and interest paid of US$3.3 million and US$3.3 million respectively and increase in deposits pledged for borrowings from financial institutions of US$37.8 million. The proceeds and repayment of bank borrowings include the gross amount received and gross amount paid for the receivable financing facility provided by a bank.
By Order of the Board
Garrick James Stanley
Executive Director and
Group Chief Executive Officer
14 August 2014
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