Mermaid Maritime Public Company Limited (2025): Full-Year Financial Analysis and Investor Insights

Mermaid Maritime Public Company Limited (“Mermaid Maritime”) has released its audited financial statements for the year ended 31 December 2025. The following analysis provides an in-depth review of the company’s financial performance, key metrics, notable events, and a data-driven outlook for investors.

Key Financial Metrics and Performance Overview

Historical Performance Trends

• Revenue: Declined by 4.7% YoY, primarily due to lower contributions from some geographical markets.
• Net Profit and EPS: Both declined significantly. The YoY drop in EPS by 54.6% reflects weaker profitability, despite ongoing cost controls and reversal of impairment losses.
• Equity Position: Strengthened, with a 27.4% YoY increase in total equity, largely due to a successful rights issue and improved retained earnings.
• Dividend: The board proposed a cash dividend of USD 0.001 per share, reflecting a more stable capital base.

Exceptional Earnings and Expenses

• Reversal of impairment loss on property, plant, and equipment: USD 4.4 million in 2025, following a USD 9.9 million reversal in 2024. This positively impacted the bottom line but was not sufficient to offset the overall decline in operational profitability.
• Expected Credit Losses (ECL): USD 0.5 million recognized, indicating ongoing caution regarding receivables.

Corporate Actions: Fundraising and Share Capital Events

• Share Issue: In 2025, the company completed a rights issue, increasing issued and paid-up capital from USD 47.3 million to USD 62.1 million. This raised USD 43.4 million, strengthening the balance sheet.
• Share Premium Utilization: The company used share premium to offset a large historical deficit, improving the equity position.
• Capital Reduction Proposal (Post-Year-End): In February 2026, the board approved a registered capital reduction by cancelling unissued shares, to be voted on at the next AGM.

Legal and Regulatory Events

• Legal Dispute (Indonesia): The group’s subsidiary was involved in a legal dispute regarding shareholdings in PT Seascape Surveys Indonesia. The final court judgment was unfavorable to Mermaid Maritime and is now binding. While the financial impact is not detailed, this represents a closure to a long-running legal risk.
• Global Minimum Tax (Pillar Two): The group assessed the impact of new global minimum tax regulations and concluded there was no material effect on 2025 financials. However, this will remain an area to monitor for future tax expense volatility.

Related Party Transactions and Unusual Fund Flows

• Significant Related Party Borrowings: USD 70 million in unsecured borrowings from the parent company (Thoresen Thai Agencies PCL), with a 7.0% interest rate and a 5-year term under a restructuring agreement.
• Guarantees: The company and subsidiaries continue to provide corporate guarantees for borrowings by other group entities, which concentrates financial risk within the group.
• Management Remuneration: Key management compensation for 2025 amounted to USD 1.7 million (short-term and post-employment benefits).

Segment and Geographic Performance

• Subsea Services: Main revenue driver, with the highest contributions from Thailand and Saudi Arabia. Revenue from the UK and Angola has declined sharply.
• Holding Segment: Minor direct revenue contribution but absorbs significant costs due to group financing structure.

Proposed Dividend

The board has proposed a dividend of USD 0.001 per share (totaling USD 1.9 million), to be approved at the 2026 AGM. There was no dividend declared for 2024, making this a return to shareholder distributions.

Notable Risks and Outlook

• Profitability Pressure: The company’s operating profit margin and net profit have declined, with EPS nearly halved. This underscores margin pressure and less robust cash generation.
• Balance Sheet Strengthening: The rights issue and capital restructuring have materially improved the equity position, reducing the risk of covenant breaches.
• Legal and Regulatory Risks: While the Indonesian legal case has concluded, further developments in tax regulation (Pillar Two) and continued reliance on related-party borrowings remain monitoring points.
• Dividend Resumption: The proposed dividend, though modest, signals management’s confidence in the company’s liquidity position post-fundraising.

Conclusion and Investor Recommendation

Overall, Mermaid Maritime delivers a mixed set of results for FY2025. The company’s balance sheet is now materially stronger following the rights issue, and equity has increased. However, profitability has weakened, with both revenue and EPS declining sharply year-over-year. The resumption of a dividend, albeit small, is a positive signal, but the underlying business remains under margin pressure and is still dependent on credit from its parent company.

• If you are currently holding the stock:
  Consider maintaining your position for the short term, especially if you favor a turnaround story and value the company’s improved capital structure and renewed dividend. However, stay cautious and closely monitor quarterly results for signs of operational improvement. Tight stop-losses or partial profit-taking may be warranted if profitability continues to disappoint.
• If you are not currently holding the stock:
  It may be prudent to remain on the sidelines until there is clear evidence of a sustainable earnings recovery. The improved balance sheet and dividend are positives, but wait for demonstrable growth in revenue or profit margins before initiating a position.

Disclaimer: This analysis is based solely on information disclosed in the company’s official financial statements for the year ended 31 December 2025. It does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance before making any investment decisions.

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