- As expected, Marco Polo Marine's 1HFY25 earnings was weak, down 13.7% y-o-y to S$9.6m but we forecast 2HFY25 earnings growth to be strong, especially with the full contribution of its CSOV. We also expect charter rates to remain stable, but third-party chartering should continue to decline for the rest of FY25E.
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Lower third party + CSOV upfront costs hit 1HFY25
- As the CSOV won’t commence operations until 3QFY25, full contribution won’t be until 3Q25E onwards, but upfront costs for the crew and sea trials etc have affected 1HFY25.
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- Lastly, its shipyard repairs were also affected by the on-going construction of the CSOV in 1HFY25, which reduced capacity for the other projects.
Oil price may impact charter rates
- As oil price has been trending down significantly over the past few months, we expect charter rates to be impacted. There are signs charter rates for O&G are declining, which may impact Marco Polo Marine. However, Marco Polo Marine has diversified about 50% of its chartering revenue to offshore windfarms, which should act as a safety net if oil prices continue to fall.
Long term still positive
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