Meanwhile, using discounted cash flow, RHB’s Alfie Yeo calculates TP at 14 cents, up from the previous 12.2 cents. He adds that this valuation is 13 times of FY2026 forecasted P/E, below its 20% CAGR for FY2025 to FY2028.
Marco Polo Marine’s net profit attributable to shareholders jumped to $58.5 million, a y-o-y increase of nearly 170%. The performance was attributed to one-off gains and stronger performance for the ship-chartering segment.
Meanwhile, compared to the previous corresponding period of 39.3%, gross profit margin strengthened to 44.1%, with gross profit rising 11.8% y-o-y to $54.2 million.
The CGSI analysts noted that full-year revenue was in line with expectations, while net profit (excluding one-off gains) of $25.2 million was “ahead” of expectations.
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They attributed gross margin improvement to the new commissioning service operation vessel (CSOV) that has been chartered to Siemens Gamesa at a day rate of US$65,000 ($84,000) since April.
However, for FY2026 to FY2028, they think that gross margin could decrease and “stabilise” to between 36% to 43% as the CSOV will be chartered to a long-term contract at US$45,000 ($58,000) daily with Vestas. Gross margin could also decrease as work begins on a newbuild order, which typically carries lower margins.
Kande and Lim are optimistic about upcoming new projects that would propel long-term growth into FY2028. With a new dry dock that became operational in August, they see an increase in ship repair work and revenue to flow in from newbuilds for FY2027.
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For chartering revenues, they forecast an increase in FY2026 due to contributions from the CSOV and two new anchor handling tug supply (AHTS) coming into operation in the second half of FY2026.
They forecast a FY2028 net profit of $46.8 million, representing a 23% CAGR from FY2025 to FY2028. They attribute the profit increase to a second CSOV scheduled for delivery in 2Q FY2028 and a $198 million newbuild contract for a research vessel to be built over FY2027 to FY2029.
Key downsides for Kande and Lim include lower-than-expected utilisation for yard or fleet, and delays in offshore wind projects affecting vessel demand.
Similarly, Yeo is bullish on Marco Polo Marine due to its “accelerating growth outlook” and has gained more confidence on the company’s prospects with FY2025’s operating profit “outperforming strongly”.
He notes that revenue grew in the ship chartering segment on the back of the first CSOV’s deployment and three additional crew transfer vessels (CTV). Fleet utilisation also increased to 71%, compared to 68% for FY2024.
Yeo attributed the revenue decline for shipbuilding and repair to the construction of its already deployed CSOV, which reduced its shipyard’s capacity for third-party shipbuilding projects. However, this decline was offset by more shipbuilding projects with higher contract values and an increase in shipyard utilisation rate for ship repair to 83% from FY2024’s 74%.
Although both EBIT and core earnings outperformed his earlier estimates by 29% and 14% respectively, he does not expect revenue to increase for FY2026 and FY2027. However, he believes margins will be stronger and has raised earnings forecasts by 15% and 13% for the afore-mentioned two years. He writes that the forecast is “premised on a higher fleet size, improved charter rates, stronger utilisation rates, and the recent shipbuilding contract coming through”.
Marco Polo Marine shares gained two cents or 16.7% from the previous day to close at 14 cents on Dec 2.
