For its 1HFY2025, MPM reported core patmi of $9.6 million, down 14% y-o-y. Revenue in the same period was down 14% y-o-y to $52.7 million without third-party charter revenue of some $7.5 million in Taiwan. Shipbuilding activity was subdued as well.
On the other hand, the company enjoyed better chartering rates in southeast Asia and stronger fleet utilisation. It enjoyed an overall favourable revenue mix which helped generate better margins.
MPM's new CSOV, or commissioning, service, and operations vessel, has started generating revenue, as it is now chartered at a rate of US$65,000 per day. MPM is in talks for a second CSOV which could be ready by late FY2027.
Kande and Lim note that MPM will have two new crew transfer vessels added in 2HFY2025, which could offset lower revenues from third-party chartering in Taiwan.
See also: AEM’s outlook draws mixed reactions from analysts
Meanwhile, MPM's yard utilisation rate fell from 89% in 1HFY2024 to 1HFY2025's 78%.
The analysts have kept their FY2025 earnings projections but have lowered estimates for the coming FY2026 and FY2027 by 4.3% and 7.5% respectively to factor in a slower yard recovery.
They have also lowered their target multiple from 9x FY2026 earnings to 7x, which is "roughly" in line with peers.
"We reiterate 'add' as we see net profit CAGR of 18% over FY2024 to FY2027," state Kande and Lim.
For them, key re-rating catalysts include contract win for the second CSOV and higher-than-expected fleet utilisation.
On the other hand, downside risks include lower-than-expected yard utilisation and delays in offshore wind projects affecting vessel demand.
Marco Polo Marine shares closed at 4.4 cents on May 16, up 2.33% for the day, but down 12% year to date.
