Marco Polo Marine’s revenue crash 38% in 1QFY13

Check out what to blame.

According to OCBC Investment Research, Marco Polo Marine (MPM) reported a 38% YoY drop in revenue to S$15.2m but saw a 3% rise in net profit to S$4.5m in 1QFY13, such that the latter formed about 20% of its full year net profit estimate, within our expectations. The fall in revenue was mainly due to slower progress in newbuild orders, resulting in lower shipbuilding revenue. 

Here’s more:

This was offset by higher ship repair turnover, which grew 75.5% to S$8.6m in 1QFY13. Ship chartering revenue fell by 5.2% to $5.5m with the mandatory docking of an offshore vessel. Overall gross profit margin, however, increased from 25% in 1QFY12 to 39% in 1QFY13 with a higher proportion of ship repair revenue (generally commands higher margins compared to ship building).

Pending further details from management, we maintain our BUY rating but put our fair value estimate of S$0.56 under review.