Overview
Marco Polo Marine (MPM) has demonstrated a solid underlying performance in a challenging market environment, as detailed in the recent report by CGS International. The analysis highlights the company’s resilient earnings, steady charter rates, and fleet utilisation alongside strategic initiatives in its shipyard and offshore support segments. Despite a slight revenue decline in 1QFY9/25, the company continues to underpin growth through a mix shift towards higher-margin repair jobs and the planned expansion of its fleet and operational capabilities.
1QFY9/25 Performance Highlights
In the first quarter of FY9/25, Marco Polo Marine reported a revenue of S\$25.8 million, marking an 11% year-on-year decline. This decrease was driven by a 13% decline in ship chartering revenues and a 9% decline in shipyard revenues, following the termination of a key third-party charter contract in Taiwan. Despite these challenges, the company’s vessel charter rates and fleet utilisation maintained stable levels, and an improved mix with a focus on more profitable repair jobs bolstered the gross margin to 41% from 39.9% recorded in the same quarter of FY24.
Deep-Dive: Earnings and Operations
MPM’s strategic emphasis on generating income from chartering third-party vessels is evident in its operations in Taiwan, where the company is estimated to have generated approximately S\$14 million annually from such charters during FY23-24. However, owing to its 49% stake in the Taiwanese joint venture, the net profit impact is moderated to around S\$2 million, representing about 8% of the period’s earnings. While third-party charters yield slightly lower gross margins compared with owned vessels, they still form a vital component of the company’s revenue stream.
The report also underscores the diversification in service offerings, noting the stable yet strong performance across both chartering and shipyard segments. Yard utilisation saw a 4 percentage point expansion year-on-year, reaching 83%, supported by an increase in repair job volumes. MPM’s commitment to balancing short-term revenue declines with long-term operational improvements is central to its growth strategy.
Offshore Wind Vessels and Future Prospects
A significant growth catalyst for Marco Polo Marine is the rollout of three new offshore support vessels in Taiwan, which are slated to commence full operations from the second half of 2025. This fleet expansion includes two crew transfer vessels (CTVs) and one commissioning, service, and operations vessel (CSOV). The CSOV is already secured under a minimum three-year charter contract with Vestas, earning approximately US\$45,000 per day, with potential short-term charters to Siemens Gamesa during operational gaps capturing day rates of US\$60,000–70,000. Additionally, the company’s shipyard segment is expected to benefit from the timely exit of the CSOV from drydock and increased capacity following the commissioning of a new drydock facility.
Financial Summary & Key Ratios
The report provides an extensive financial summary, showcasing Marco Polo Marine’s revenue trajectory and robust operational metrics. The historical and forecasted financials include:
- Revenue: S\$127.1 million in Sep-23A to an estimated S\$180.5 million by Sep-27F.
- Operating EBITDA: Consistent growth from S\$43.30 million in Sep-23A to S\$61.93 million by Sep-27F.
- Net Profit: A gradual improvement from S\$22.58 million in Sep-23A to a forecasted S\$38.68 million by Sep-27F.
- Core EPS: Modest but steady EPS growth projected to increase from S\$0.006 to S\$0.010.
- Key Ratios: The company maintains attractive P/E multiples and valuation metrics, including a FD core P/E that remains below historical averages and a steadily increasing book value per share (BVPS) and ROE.
Capital structure details further highlight a strong balance sheet with net cash positions and a controlled gearing ratio, underscoring the company’s financial discipline amid its growth initiatives.
ESG Focus and Sustainability Initiatives
