- Marco Polo Marine posted lower 1QFY25 revenue of S$25.8m (-11% y-o-y), while gross profit of S$10.6m fell 9% y-o-y from its record-high in 1QFY24. This accounted for 19% and 20% of our forecasts respectively, in line with expectations as 1H is typically more subdued due to the monsoon season.
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Ship chartering: Lower demand for third-party chartering in Taiwan, but new vessels and positive offshore sector outlook ahead.
- Ship-chartering revenue declined 13% y-o-y, primarily due to lower third-party chartering income from Taiwan, with the downturn expected to persist throughout FY25 as current wind farm projects have completed construction. The fall was partially offset by higher average charter rates and a slight y-o-y increase of 1ppt in average fleet utilisation to 71%.
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- We estimate that a CSOV and CTV may generate around US$13m (~S$17m) and US$2m (~S$3m) in revenue respectively over a full year of operations.
Shipyard: Expect more higher-margin ship repair projects on increased vessel volume in the market.
- Shipyard revenue dropped 9% y-o-y in 1QFY25, attributed to fewer shipbuilding activities. However, this was partially offset by a rise in ship repair projects, which led to a higher yard utilisation rate of 83% (+4ppt y-o-y). The rising number of vessels in the market benefits Marco Polo Marine’s ship repair business, as it naturally drives potential repair demand given that vessel maintenance is mandatory.
- The consistently robust yard utilisation rate underscores the effectiveness of Marco Polo Marine’s new fourth dry dock, which is expected to complete construction by end-Mar 25. This will boost ship repair capacity by up to 25% and start contributing in 2HFY25.
Batam shipyard site visit takeaways.
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