Yep, percentage chance for critical hit. You should also notice a multiplier, which gets aplied to the actual damage that comes up in case of a critical hit.
It usualy wont have much impact on that particular compartment, because a torpedo hit is enough to destroy most compartments to begin with. But a higher damage means more damage further out in the splash-zone, making it more likely to also destroy any compartments that are within the radius.
* the increased damage will also impact the overall ship HP. If that runs out, the ship is destroyed, regadless of actual physical damage.
Sorry to but in, and hope I got it right, but there ya go.
