CGS International Securities
August 20, 2025
Marco Polo Marine: Riding the Offshore Wind Wave with Strategic Fleet Expansion
Introduction: Offshore & Marine Sector in Focus
Marco Polo Marine (MPM), a key player in Singapore’s offshore and marine industry, has delivered a strong performance in FY25, fueled by its strategic pivot toward offshore wind support and fleet modernization. CGS International Securities’ latest research dives deep into MPM’s financials, operational highlights, ESG achievements, and peer comparison, offering investors a comprehensive look at the company’s trajectory and sector outlook.
Key Highlights from Analyst Briefing
- Marco Polo’s new Commissioning Service Operation Vessel (CSOV) is contributing robustly, with minimal setup issues and strong revenue momentum.
- The company is actively considering the addition of a second CSOV, potentially to be announced in the second half of 2025.
- Bank financing conditions have eased for offshore support vessel (OSV) players, paving the way for further fleet growth.
- Yard enquiries for repairs are picking up, but newbuild orders remain subdued, tempering near-term revenue expectations from shipyard operations.
- CGS International reiterates an “Add” rating, raising its target price to S\$0.08, reflecting sector re-rating and valuation uplift.
Financial Performance: 3QFY25 and Nine-Months Overview
MPM’s financial results showcase the impact of its fleet and service diversification. The group reported S\$11 million in revenue from new offshore wind vessels over the first nine months of FY25, with S\$6-7 million attributed to its flagship CSOV. However, overall group revenue reached only 66% of FY25 forecasts, slightly below expectations due to lower oil & gas charter income and the sale of two tugs.
| Metric |
3QFY25 |
3QFY24 |
% YoY Change |
2QFY25 |
% QoQ Change |
| Ship Chartering Revenue (S\$m) |
22.2 |
23.1 |
-3.9% |
n/a |
n/a |
| Shipyard Revenue (S\$m) |
9.5 |
11.8 |
-19.5% |
n/a |
n/a |
| Total Revenue (S\$m) |
31.7 |
34.9 |
-9.2% |
26.9 |
+17.9% |
| Gross Profit (S\$m) |
14.0 |
14.6 |
-4.1% |
11.0 |
+27.0% |
| Gross Margin (%) |
44.2% |
41.8% |
+2.4 pts |
41.0% |
n/a |
Key Financial Summary (FY23A–FY27F)
| Metric |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Revenue (S\$m) |
127.1 |
123.5 |
118.3 |
142.4 |
152.7 |
| Operating EBITDA (S\$m) |
43.30 |
42.70 |
40.68 |
53.31 |
59.27 |
| Net Profit (S\$m) |
22.58 |
21.70 |
22.15 |
32.01 |
35.77 |
| Core EPS (S\$) |
0.006 |
0.007 |
0.006 |
0.009 |
0.010 |
| Dividend Yield (%) |
1.52 |
1.52 |
1.67 |
1.67 |
1.82 |
| Net Gearing (%) |
-33.1 |
-17.8 |
-14.0 |
-18.0 |
-16.2 |
| ROE (%) |
15.1 |
14.0 |
11.3 |
14.5 |
14.2 |
Fleet Expansion and Strategic Outlook
MPM’s successful deployment of its first CSOV has led to active client discussions, with expectations for a second CSOV contract in 2H25. Construction is estimated at two years, with revenue contribution likely from end-2027. The company continues to divest older assets, such as tugs, to redeploy capital toward offshore wind opportunities.
- Fleet utilization in 3QFY25 improved to 88%, up from 73% in 2QFY25.
- Yard utilization also strengthened, but shipyard revenues declined 19% YoY due to weak newbuild demand.
- MPM is leveraging its strong net cash position and the improving bank financing landscape to accelerate fleet additions.
Shipyard Operations: Repairs vs. Newbuilds
Ship repair enquiries have picked up, contributing to higher gross margins, but newbuild orders remain elusive. MPM’s gross margin rose 2 percentage points YoY to 44% in 3QFY25, driven by a shift in sales mix toward repair work and away from low-value third-party charters.
ESG Initiatives: Sustainability and Safety
MPM stands out for its commitment to environmental sustainability, social responsibility, and governance. Highlights include:
- Hybrid energy storage systems in CSOVs, reducing fuel consumption and emissions by up to 15–20% compared to conventional vessels.
- MoU signed with Amogy to deploy ammonia-to-power systems on new and existing wind vessels.
- Green ship recycling initiatives, with Indonesia’s first ISO 30000:2009-certified shipyard.
- Scope 1 and 2 emissions reduced by 12% YoY and energy intensity cut by over 50% YoY in FY23.
- Challenge: Workplace safety incidents rose from 8 in FY21 to 32 in FY23, highlighting the need for stricter safety protocols and investments in staff training.
Peer Comparison: Offshore & Marine Sector
The report provides a thorough peer analysis across the region, benchmarking MPM against direct competitors and sector players.
| Company |
Ticker |
Recommendation |
Target Price |
Market Cap (US\$m) |
P/E CY25F |
P/E CY26F |
ROE CY25F (%) |
Dividend Yield CY25F (%) |
| Marco Polo Marine |
MPM SP |
Add |
0.08 |
193 |
10.1 |
7.5 |
12.2 |
1.7 |
| Pacific Radiance |
PACRA SP |
Add |
0.09 |
70 |
5.5 |
4.9 |
13.8 |
0.7 |
| Mermaid Maritime |
MMT SP |
Add |
0.16 |
168 |
8.2 |
5.9 |
8.2 |
0.0 |
Balance Sheet Strength and Cash Flow
MPM’s healthy balance sheet is a foundation for its expansion:
- Total cash and equivalents are projected to rise from S\$63.1m (Sep-23A) to S\$78.4m (Sep-27F).
- Shareholder equity grows steadily, reaching S\$268.9m by Sep-27F.
- Net gearing remains low, supporting financial flexibility for fleet investments.
- Free cash flow to equity expected to rebound post-FY25, with S\$17.31m in FY26F and S\$8.87m in FY27F.
Key Operational Ratios and Drivers
| Metric |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Fleet Utilisation (%) |
79.8 |
68.5 |
69.3 |
71.8 |
71.7 |
| Yard Utilisation (%) |
85.0 |
91.0 |
81.0 |
83.0 |
85.0 |
| Operating EBITDA Margin (%) |
34.1 |
34.6 |
34.4 |
37.4 |
38.8 |
Investment Thesis: Rating, Target Price, and Catalysts
- CGS International maintains its “Add” rating for Marco Polo Marine, with a revised target price of S\$0.08 (from S\$0.06), representing a 21.2% upside from the current price.
- Valuation is now set at 10x FY26F P/E, aligned with sector peers.
- Key catalysts include: contract wins for a second CSOV, further fleet expansion announcements, and higher-than-expected fleet utilization.
- Risks to watch: lower yard utilization, project delays in the offshore wind sector, and safety compliance challenges.
Conclusion: Marco Polo Marine’s Path Forward
Marco Polo Marine’s strategic positioning in the offshore wind supply chain, commitment to ESG, and robust balance sheet underpin its growth prospects. As the sector enjoys an upward re-rating and financing conditions improve, MPM’s planned fleet expansion and repair yard activities make it a compelling watch for investors seeking exposure to Asia’s offshore and marine rebound.
Coverage Universe: Peer Group Snapshot
The sector peer group includes Pacific Radiance, Mermaid Maritime, Vallianz Holdings, ASL Marine, Kim Heng, Nam Cheong, Wintermar Offshore, Logindo Samudramakmur, Sillo Maritime Perdana, Sealink International, Marine & General, Lianson Fleet Group, Perdana Petroleum, Sea1 Offshore, Tidewater, Helix Energy Solutions, Subsea 7, and SEACOR Marine. Each company’s valuation, growth, and yield metrics are benchmarked for investors’ comparative analysis.
Investment Ratings Framework
- Add: Expected total return >10% over next 12 months
- Hold: Expected total return 0–10%
- Reduce: Expected total return <0%
Sector and country ratings follow similar overweight, neutral, and underweight definitions, guiding investors in portfolio positioning.
Final Note
Investors should independently evaluate all information, considering individual objectives and risks. Marco Polo Marine is a dynamic player to watch as the offshore wind and marine sector enters a new cycle of growth and innovation.
