Mermaid Maritime Public Company Limited Q2 2025 Financial Analysis

Mermaid Maritime Public Company Limited, a leading provider of subsea and offshore services in Asia and the Middle East, has released its condensed interim financial statements for the three-month and six-month periods ended 30 June 2025. This article examines the company’s latest performance, trends, and critical events impacting its outlook.

Key Financial Metrics

Historical Performance Trends

• Revenue Downturn: Revenue for Q2 2025 was USD 112.4m, significantly down from USD 158.0m in Q2 2024, reflecting a YoY decline of nearly 29%. The six-month revenue was USD 229.6m, also lower than the USD 246.1m for H1 2024.
• Profitability Under Pressure: Mermaid posted a net loss of USD 15.5m for the first half of 2025, a sharp reversal from the USD 3.3m profit in H1 2024. The trend reflects margin compression and cost pressures.
• EPS Negative: Earnings per share also swung to a loss, with Q2 2025 at (0.0055) USD compared to a positive 0.0020 USD in Q2 2024.
• Operating Cash Flows Improved: Despite losses, operating cash flow for H1 2025 turned positive at USD 8.5m (vs. a negative USD 12.4m in H1 2024), driven by better working capital management.
• No Dividend: No interim dividend was proposed.

Balance Sheet Highlights

• Liquidity: Cash and cash equivalents fell to USD 18.5m at 30 June 2025, down from USD 22.9m at year-end 2024.
• Negative Working Capital: The company and group reported negative working capital of USD 77.2m and USD 17.1m respectively, raising ongoing liquidity concerns.
• Borrowings: Total borrowings from parent and financial institutions increased to USD 110.9m (short + long-term), with long-term debt growing due to vessel acquisitions and refinancing.

Corporate Actions and Capital Structure

• Capital Reduction and Rights Issue: In Q2 2025, Mermaid reduced registered capital, then raised it via a rights issue of 807.6m shares. On 8 July 2025, 477.4m rights shares were allotted, increasing total shares to 1.89bn, resulting in share dilution.
• Deficit Offset: The company used share premium to offset a deficit of USD 267.6m (Baht 9,859m) on 30 May 2025, cleaning up the balance sheet.
• Subsidiary Actions: Substantial capital reduction at Mermaid Subsea Services (Thailand) Ltd. and capital increase at Zeaquest Co., Ltd., reflecting restructuring and recapitalization efforts.

Legal and Regulatory Events

• Legal Proceedings: Mermaid is involved in an ongoing lawsuit in Indonesia via a subsidiary, related to shareholding and management of PT Seascape Surveys Indonesia. The case is still on appeal and its outcome remains uncertain.
• Global Minimum Tax: The group became subject to a global minimum tax in 2025, but management noted no material impact for the reporting period.

Related Party Transactions

• Significant Intercompany Flows: Material borrowings from parent company (USD 80.5m), management fees from subsidiaries, and loans to related parties. These warrant scrutiny for potential conflicts and cash flow risk.
• Guarantees: Mermaid issued guarantees for subsidiaries’ loans totaling up to USD 30.7m.

Business Segment Performance

Events After Reporting Date

• Share Allotment: On 8 July 2025, Mermaid completed the allotment of 477.4m rights shares, increasing the share count and further diluting existing holdings.
• New Joint Venture: Mermaid Subsea Services (Thailand) invested in Mermate Co., Ltd. (Taiwan), targeting offshore wind and subsea projects, signaling strategic expansion.

Conclusion & Investment Recommendations

Performance and Outlook: Mermaid Maritime’s Q2 and H1 2025 results reflect operational and financial challenges: revenue and profit declined sharply year-over-year, with losses and negative working capital highlighting liquidity risk. The group took decisive steps to restructure capital and offset accumulated losses, but further share dilution and ongoing legal uncertainties weigh on its short-term prospects. The absence of dividends and negative EPS further dampen investor sentiment.

Recommendations

• If you currently hold the stock: Consider reducing exposure or holding only if you have a high risk tolerance and believe in the long-term subsea sector recovery. Monitor liquidity, further restructuring, and operational improvements closely.
• If you do not currently hold the stock: Wait for clear signs of turnaround in both operating performance and balance sheet stability. Entry may be considered if evidence of sustained profitability and cash flow emerges, or if strategic initiatives bear fruit.

Disclaimer: This analysis is based strictly on the company’s disclosed interim financial statements for Q2 and H1 2025. It does not constitute investment advice. Investors should conduct their own due diligence, consider personal financial circumstances, and consult professional advisers before making portfolio decisions.

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