Marco Polo Marine (MPM) reported a 3% YoY fall in revenue to S$19.8m and a 10% increase in net profit to S$3.9m in 4Q12, bringing full year revenue and net profit to S$89.8m and S$21.3m, respectively. Results were in line with our expectations; full year net profit was exactly what we had forecasted earlier. As for the long-awaited BBR listing, we think there is a possibility of it coming through in the coming months. We expect its offshore vessel fleet to grow while BBR downsizes its tugs and barges fleet. Meanwhile the ship repair business remains healthy while charter rates are expected to be stable. Rolling forward to FY13 earnings with an unchanged peg of 8x, our fair value estimate rises from S$0.53 to S$0.56. Maintain BUY.
4QFY12 results in line with expectations
Marco Polo Marine (MPM) reported a 3% YoY fall in revenue to S$19.8m and a 10% increase in net profit to S$3.9m in 4Q12, bringing full year revenue and net profit to S$89.8m and S$21.3m, respectively. Results were in line with our expectations; full year net profit was exactly what we had forecasted earlier. Gross profit margin was 32.5% in FY12 vs 28.1% in FY11, mainly due to ship repair which performed well in the year.
Business demarcation accounts for fall in chartering revenue
Revenue from shipbuilding and repair increased 32.8% to S$69.3m while shipchartering registered a 22.8% fall to S$20.5m in FY12. MPM has been reflagging its vessels to Indonesian flag and parking them under its 49%-owned associate, BBR, due to the Indonesian cabotage rule. Now the shipping business of MPM has been confined to waters outside of Indonesia while BBR assumes the Indonesian chartering business.
BBR banking on offshore sector growth Indonesia
We think there is a possibility of a BBR listing on the Jakarta Stock Exchange in the coming months. It currently has 35 pairs of tugs and barges and three offshore support vessels (OSV), but the former is expected to decrease over time as proceeds from sales will be used to fund the growth of the OSV fleet. As the OSV fleet grows, BBR may be able to brand itself as an entity for investors to gain exposure to Indonesia’s growing offshore sector. There are currently relatively few of such companies listed in Indonesia.
Maintain BUY
Management mentioned that it is still receiving enquiries for ship repair, outfitting and conversion services. As for the chartering side, MPM expects charter rates for offshore vessels as well as tugs and barges to remain stable. Rolling forward to FY13 earnings with an unchanged peg of 8x, our fair value estimate rises from S$0.53 to S$0.56. Maintain BUY.
Marco Polo Marine (MPM) reported a 3% YoY fall in revenue to S$19.8m and a 10% increase in net profit to S$3.9m in 4Q12, bringing full year revenue and net profit to S$89.8m and S$21.3m, respectively. Results were in line with our expectations; full year net profit was exactly what we had forecasted earlier. Gross profit margin was 32.5% in FY12 vs 28.1% in FY11, mainly due to ship repair which performed well in the year.
Business demarcation accounts for fall in chartering revenue
Revenue from shipbuilding and repair increased 32.8% to S$69.3m while shipchartering registered a 22.8% fall to S$20.5m in FY12. MPM has been reflagging its vessels to Indonesian flag and parking them under its 49%-owned associate, BBR, due to the Indonesian cabotage rule. Now the shipping business of MPM has been confined to waters outside of Indonesia while BBR assumes the Indonesian chartering business.
BBR banking on offshore sector growth Indonesia
We think there is a possibility of a BBR listing on the Jakarta Stock Exchange in the coming months. It currently has 35 pairs of tugs and barges and three offshore support vessels (OSV), but the former is expected to decrease over time as proceeds from sales will be used to fund the growth of the OSV fleet. As the OSV fleet grows, BBR may be able to brand itself as an entity for investors to gain exposure to Indonesia’s growing offshore sector. There are currently relatively few of such companies listed in Indonesia.
Maintain BUY
Management mentioned that it is still receiving enquiries for ship repair, outfitting and conversion services. As for the chartering side, MPM expects charter rates for offshore vessels as well as tugs and barges to remain stable. Rolling forward to FY13 earnings with an unchanged peg of 8x, our fair value estimate rises from S$0.53 to S$0.56. Maintain BUY.
No comments:
Post a Comment