Marco Polo’s ship building operations threatened by strong competition in the region

Worsened by subdued global economic outlook.

Marco Polo’s Ship Building & Repair Operations recorded a decrease in revenue of 34.3% in Q4FY2014, relative to Q4FY2013, chiefly as a result of reduced utilization of the three dry docks as well as lower amount of work done in respect of ship building contracts due to external customers.

According to a media release by the company, total revenue increased by 21.0% to S$113.1 million in FY2014 relative to that of FY2013, albeit the Group’s total revenue decreased by 16.9% to S$23.6 million in Q4FY2014, vis-à-vis Q4FY2013’s S$28.4 million.

Additionally, the Ship Chartering Operations’ revenue of the Group decreased by 6.3% in Q4FY2014, relative to Q4FY2013, due primarily to lower utilization of its fleet of tugboats and barges amidst the continued weakened shipping demand in Indonesia for the shipment of coal and other commodities.

With the global economic condition being anemic with tepid and uncertain signs of recovery, Marco Polo continues to keep a vigilant watch on market conditions and their ensuing impact on its operations. While oil prices have been volatile and are generally declining recently to multi-year lows, the offshore oil and gas exploration and production activities in the region have so far remained resilient given that the region is characterized by relatively shallow waters with an active and sizeable fleet of jack-up rigs in operation.

The Group’s Ship Building and Repair Operations are also expected to continue to be affected by the global subdued economic outlook and strong competition in the region.