Marco Polo Marine 1QFY2026 Update: Strong Growth Trajectory, Record Contract Wins, and Strategic Expansion Into Renewables

1. Corporate Overview

Marco Polo Marine Ltd (“MPM”) is a leading regional integrated marine logistics company listed on the SGX (stock code: 5LY), primarily engaged in ship chartering and shipyard operations. The Group has a notable presence in Indonesia and Taiwan, with diversified assets comprising a significant fleet of offshore support vessels (OSVs), maintenance work vessels (MWVs), crew transfer vessels (CTVs), tugboats, and barges. As of 27 January 2026, the company reported an FY2025 revenue of S\$122.8 million and a free float of approximately 51.1%.

2. Segmental Business Operations and Recent Performance

Shipbuilding & Repair

• One of Indonesia’s largest shipyards, equipped with four dry docks.
• Extensive track record: Over 1,000 ship repair projects completed in the past decade.
• Capabilities include ship building, conversion, offshore fabrication, and ship repair/maintenance services.

Ship Chartering

• Fleet highlights: 1 CSOV (Commissioned mid-April 2025), 5 CTVs (wind farm support), 13 OSVs (including 1 MWV), 6 tugboats, and 6 barges.
• Strong Indonesian operations via PT Bina Buana Raya and growing Taiwan presence through PKR Offshore.
• Average OSV fleet age is approximately 11 years, balancing modernity and asset value.

3. 1QFY2026 Financial Highlights

• Revenue surged 27% year-on-year to S\$32.8 million, primarily driven by expansion in the Ship Chartering segment following the addition of a new CSOV and several CTVs.
• Gross profit rose 32% to S\$14.0 million, with gross profit margins improving to 43% (from 41% in 1QFY2025).
• Profitability improvement was attributed to an optimized revenue mix, with higher-margin Ship Chartering now contributing a larger share.

4. Segmental Performance and Outlook

Ship Chartering

• Revenue up 53% year-on-year, boosted by OSV fleet expansion, improved charter rates, and higher utilization (1QFY2026: 76% vs. 71% in 1QFY2025).
• Charter rates remain elevated due to stable demand from both offshore oil & gas and renewable energy sectors. The deployment of the CSOV and CTVs has further strengthened this segment.
• Seasonal patterns indicate stronger performance in the second half of the fiscal year.

Shipyard

• Shipyard revenue declined by 9% year-on-year, mainly due to reduced shipbuilding activity, partially offset by increased ship repair projects—an area with 50-70% repeat customers.
• Ship repair remains a stable long-term business for the Group.

5. Financial Position and Cash Flow

• Adjusted net profit for FY2025 was S\$25.2 million, down 4.2% year-on-year, but expected to see an uplift in FY2026 with full contributions from new CSOV and CTV deployments.
• Net cash position of S\$9.3 million as of 30 September 2025, reflecting a strong and liquid balance sheet.
• Group net asset value rose to S\$264.3 million as of end-September 2025 (S\$0.070/share), underpinned by tangible assets including the Batam shipyard and a diversified fleet.

6. Price-Sensitive and Strategic Developments

Offshore Wind and Renewables Pivot

• MPM’s strategic pivot to renewables is a key differentiator, increasing asset utilization and profitability while diversifying the customer base beyond the cyclical oil & gas sector.
• Full-year contributions from the CSOV and three CTVs deployed in Taiwan are expected to lift FY2026 earnings.
• PKR Offshore (Taiwan) is preparing for a public listing in 2026, which will provide fresh capital for fleet expansion and increase MPM’s exposure to high-growth offshore wind markets.

Major Contract Wins and Fleet Expansion

• Record S\$198 million shipbuilding contract: MPM secured its largest-ever contract to design and build a 4,000GT oceanographic research vessel for Taiwan’s National Academy of Marine Research. The vessel will be constructed over four years at the Batam shipyard, with no project-specific debt and engineering support from Singapore. This is a significant revenue and profile booster for the Group.
• Expansion of fleet: Two new Anchor Handling Tug Supply (AHTS) vessels (combined value ≈US\$34 million) are expected to join the fleet in 2026, increasing fleet size from 19 to 21 vessels. These vessels are DP2 class, with high bollard pull and firefighting capabilities, designed for both oil & gas and offshore wind support roles.
• The 4th dry dock commenced operations in late August 2025, immediately winning a S\$5 million contract and signing a 3-year service agreement with Cyan Renewables.

Innovation and Newbuilds

• CSOV+ Project: MPM is collaborating with Salt Ship Design to construct a next-generation, multifunctional, battery-hybrid CSOV with alternative fuel compatibility and advanced safety features. Construction starts in Q2 2026, with delivery slated for Q2 2028. This vessel targets both offshore wind and oil & gas sectors, enhancing MPM’s technical and sustainability credentials.

7. Investment Merits

• Attractive valuation underpinned by a tangible asset base and a healthy net cash position.
• Strong balance sheet and a clear strategy to capture growth in the renewables market and offshore support services.
• Unique integrated business model (designer, builder, owner, operator) positions MPM to meet the evolving needs of wind farm developers and operators.

Conclusion: Why This Is Newsworthy for Investors

Marco Polo Marine’s Q1FY2026 update signals a robust growth trajectory, supported by sound financials, strategic fleet expansion, and a successful pivot towards renewables and high-value contracts. The record S\$198m shipbuilding contract, imminent fleet upgrades, and the PKRO listing in Taiwan are highly price-sensitive developments that can materially impact MPM’s earnings, asset value, and market perception. Investors should monitor these catalysts closely, as they may drive share price re-rating in the near to medium term.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors should conduct their own due diligence and consult their financial advisors before making investment decisions. The author and publisher are not liable for any losses arising from reliance on the information herein. This article may contain forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

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