Pacific Radiance Ltd. 1H 2025 Financial Results: Strong Operational Recovery Amid Market Headwinds

Pacific Radiance Ltd., listed on the SGX, has released its condensed interim financial statements for the six months ended 30 June 2025. The Group is principally engaged in owning, managing, chartering, and operating offshore support vessels, as well as ship repair activities. This review dissects the key financial metrics, trends, and management commentary, providing investors with a clear snapshot of Pacific Radiance’s performance and outlook.

Key Financial Metrics

• Revenue: US\$24.4 million for 6M 2025, up 28% YoY
• Gross Profit: US\$12.0 million, up 89% YoY
• Net Profit: US\$8.8 million, down 46% YoY (due to absence of exceptional gains)
• Net Asset Value (NAV) per share: 6.26 US cents (June 2025), up from 5.52 US cents (Dec 2024)
• Cash and Bank Balances: US\$15.4 million (June 2025)
• Dividend: No dividend declared for 1H 2025. Previous year’s final dividend of US\$547,000 was paid in May 2025

Performance Table: Year-over-Year and Sequential Comparisons

*HoH = Half-on-Half; 2H 2024 not disclosed in the report.

Historical Performance Trends

Pacific Radiance’s 1H 2025 financials reflect a sharp operational recovery, with revenue and gross profit rising significantly year-on-year. This was largely driven by increased ship repair jobs and higher chartering activity. The YoY decline in net profit and EPS, however, is attributed to the absence of exceptional one-off gains (notably, debt forgiveness on bank loans and gains on vessel revaluation) that boosted 1H 2024 results.

Exceptional Earnings and Expenses

• 1H 2024 included US\$10.8 million gain from debt forgiveness and US\$4.3 million in deferred gains, neither of which recurred in 1H 2025.
• Operating income in 1H 2025 (US\$1.9 million) was substantially lower than 1H 2024 (US\$17.1 million) for this reason.
• There was no impairment of property, plant, and equipment in 1H 2025, versus US\$0.5 million in 1H 2024.

Balance Sheet and Cash Flow Highlights

• Net assets rose to US\$90.6 million (from US\$80.0 million at Dec 2024), reflecting improved retained earnings and foreign currency translation gains.
• Cash and bank balances declined to US\$15.4 million from US\$17.8 million at Dec 2024, mainly due to capital expenditure (US\$3.9 million), dividend payout, and lease payments.
• Current liabilities decreased by US\$10.3 million, driven by reduction in trade payables and other liabilities.

Segment Analysis

• Ship Management: Revenue grew 43% YoY to US\$14.1 million, with segment profit before tax of US\$6.0 million.
• Shipyard (Ship Repair): Revenue rose 12% YoY to US\$10.3 million, with segment profit before tax of US\$1.0 million.

Dividend Policy

• No interim dividend declared for 1H 2025.
• A final dividend of US\$547,000 was paid for FY2024 in May 2025. There was no interim dividend for 1H 2024 either.

Related Party Transactions and Unusual Items

• Significant related party income (charter hire, management fees) from joint ventures and associates.
• No general mandate for interested person transactions in place.
• Derivative warrant liabilities decreased in fair value to US\$289,000 (from US\$515,000 at Dec 2024).

Macroeconomic and Industry Outlook

Management noted that the offshore oil and gas market remained challenging in 1H 2025, with oil prices stable but demand growth uncertain. However, offshore wind projects continue to gain momentum, driven by government investments in energy transition and security. The Group expects stability in its business activities over the next 12 months, barring unforeseen circumstances.

Chairman’s Statement and Management Tone

“The offshore oil and gas market faced significant challenges in the first half of 2025, driven by a complex mix of geopolitical tensions, regional conflicts, and macroeconomic uncertainty. Despite these headwinds, offshore activity remained resilient, supported by stable U.S. production, recovering OPEC+ output, and continued investment in deepwater developments… In parallel, the offshore wind sector continued to gain momentum… As both traditional and renewable offshore markets evolve, the Group remains focused on capturing emerging opportunities while managing operational, geopolitical, and economic risks. Barring unforeseen circumstances, the Group expects its business activities to remain stable over the next 12 months.”

The tone is cautiously optimistic, highlighting resilience in core markets and increasing opportunities in renewables, but acknowledging ongoing external risks.

Conclusion and Investment Recommendation

Overall Assessment: The 1H 2025 results show a robust operational recovery, with strong growth in core revenue and profitability (excluding exceptional items). The balance sheet has strengthened, and the company remains well positioned to benefit from both traditional and renewable offshore energy markets. The drop in headline net profit is due to non-recurring items in the prior period, not a deterioration in underlying business performance.

• If you currently hold Pacific Radiance shares: Consider maintaining your position. The underlying business appears to be on a stable growth trajectory, and the company is adapting to evolving industry trends. Watch for further evidence of margin improvement and new contract wins, especially in the renewables segment.
• If you are not currently holding Pacific Radiance shares: Monitor for continued growth in operating performance and recurring profitability. The absence of a dividend and the recent reliance on exceptional gains may make the stock less attractive in the short term, but the improving NAV and sector developments could present medium-term opportunities.

Disclaimer: This analysis is based solely on information disclosed in the company’s 1H 2025 financial report. It does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance and investment objectives before making any investment decisions.

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