Marco Polo Marine profits crash 30% in 2014

Outlook remains good, however.

Despite concerns over the weak tugs-and-barges segment, MPM’s other three divisions - offshore suppor vessels (OSVs), shipbuilding and repairs - remained healthily profitable.

According to a report by OSK-DMG, Marco Polo Marine’s (MPM) FY14 core PATMI was SGD11.5m (-30% YoY), beating our forecast by 8% as 4QFY14 (Sep) rebounded strongly QoQ. 13 new OSVs will more than double the current fleet of nine OSVs.

OSK-DMG adds that a total of 13 new OSVs will join the fleet (we estimate four for MPM, nine for BBRM, see Figure 3) in FY15-16 from MPM and Nam Cheong (NCL SP, BUY, TP SGD0.61), potentially driving FY15 growth and a third of FY16 growth. Our FY15 figures have deconsolidated BBRM after Nam Cheong takes a 30% stake later this year.

The jack-up rig will be delivered in Nov 2015, and OSK-DMG believes that the signing of a rig contract will be a key revaluation catalyst in the next six months. In addition, cabotage for jack-up rigs will kick in from Jan 2016, right after MPM takes delivery of its first rig.