Penguin International Limited: 1H2025 Financial Results Analysis

Penguin International Limited has reported its condensed interim financial statements for the six months ended 30 June 2025. The company, listed on the Singapore Exchange, is an owner and operator of workboats and passenger boats, a designer and builder of aluminium high-speed vessels, and an investment holding entity. This article analyzes Penguin’s key financial metrics, performance drivers, and outlook for investors.

Key Financial Metrics

Performance Drivers and Highlights

• Revenue Surge: Group revenue more than doubled year-on-year to \$122.0 million, driven by a 156.2% increase in shipbuilding, ship repair and maintenance revenues and a 15.2% rise in vessel chartering revenue. This was attributed to robust demand for shipbuilding activities, including fireboats, windfarm vessels, and RoPax ferries, as well as sales of Flex Fighter armoured vessels to West Africa.
• Profitability: Gross profit rose 47.2% to \$39.7 million. Net profit after tax soared 142.9% to \$7.0 million, reflecting not only higher revenues but also gains from the sale of fleet vessels and improved gross margins.
• Operating Expenses: Administrative expenses increased due to higher personnel costs, in line with expanded business activity. Other operating expenses spiked, largely due to a net foreign exchange loss of \$7.4 million, compared to a gain of \$1.5 million the previous year.
• Cash Flow: Net cash from operating activities was \$21.7 million, mainly from shipbuilding. Investing activities used \$4.4 million, largely for fleet expansion. Financing activities saw an outflow of \$18.6 million, mainly for dividend payments and bank loan repayments. Cash and cash equivalents decreased to \$24.5 million as at 30 June 2025.
• Balance Sheet: Inventories rose due to more build-to-stock vessels, while trade receivables decreased on timing differences. Other receivables and deposits increased from payments for shipbuilding equipment.

Business Segments and Geographical Trends

• Shipbuilding, Ship Repair & Maintenance: This segment accounted for \$96.4 million in revenue, up 156.2% YoY, making it the principal driver of group performance in the period.
• Vessel Chartering: Revenue reached \$25.7 million, up 15.2% YoY, reflecting deployment of newbuild crewboats to the Middle East and Africa.
• Geography: Major revenue contributions came from Europe, Middle East, Africa, and Southeast Asia, with Europe and the Middle East especially strong in shipbuilding and chartering respectively.

Exceptional Items and Expenses

• Foreign Exchange Loss: The company reported a net foreign exchange loss of \$7.4 million in 1H2025 (vs. a gain of \$1.5 million in 1H2024), primarily due to USD/SGD exchange movements.
• Gains on Vessel Sales: The increase in other income was largely from gains on sales of fleet vessels, contributing \$4.3 million.
• No Significant Related-Party Transactions: There were no transactions over S\$100,000 or shareholder mandates for interested person transactions during the period.

Dividends

• No interim dividend was declared for 1H2025, similar to 1H2024, as the company is conserving cash for fleet and shipyard expansion projects.
• The company paid a final dividend of S\$10.7 million in the period (not interim), compared to S\$7.5 million in the previous year.

Outlook and Management Commentary

Management’s Tone: The tone of the commentary is cautiously positive, noting strong demand for the company’s multi-role Flex crewboats and WindFlex Crew Transfer Vessels (CTV), even as oil prices weaken and offshore windfarm developments in Europe slow. These vessels serve essential transport roles in offshore sectors, supporting resilience in demand. Management notes a low risk of vessel oversupply at present but is monitoring geopolitical risks in the Middle East and currency fluctuations that could affect contract profitability and margins.

• Growth Drivers: Ongoing demand for crewboats and CTVs in offshore energy and windfarm sectors, especially in Europe, Middle East, and Africa.
• Main Risks: Geopolitical instability (especially in the Middle East), currency volatility (notably USD/SGD), and potential vessel oversupply.
• Capital Management: Ongoing investments in fleet and shipyard expansion, funded by a combination of internal cash flows and reduced bank borrowings.

Conclusion

Penguin International Limited delivered a very strong financial performance in the first half of 2025, with substantial year-on-year gains in revenue, gross and net profit, and earnings per share. The company’s robust operational cash flow and prudent capital allocation support ongoing investment in fleet and yard expansion. Management’s outlook remains cautiously optimistic, citing resilient demand for its core products despite macroeconomic and geopolitical uncertainties. The absence of an interim dividend is a conservative move to fund future growth. Overall, the company’s performance and outlook appear strong, underpinned by operational execution, market demand, and disciplined financial management.

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