Asia/Pacific News
Profit Drops 39% at Singapore's Marco Polo Marine Despite Revenue Growth
Singapore-headquartered ship charterer, builder, and servicer Marco Polo Marine Ltd. (Marco Polo) has announced a 39 percent drop in year-on-year profits for the year ended September 30, 2014 (FY2014), despite revenue growth.
Marco Polo posted a profit, after finance costs and including contribution from jointly-controlled companies, of S$13.7 million (USD$15.5 million) for FY2014 versus S$22.4 million (USD$17.2 million) for FY2013.
The significant drop in profitability comes despite solid revenue growth, from S$93.5 million (USD$71.8 million)) last year to S$113.1 million (USD$86.6 million)for FY2014, a 21 percent increase year-on-year.
The company said that higher revenue growth in its Shipbuilding and Repair business, relative to its Ship Chartering business, meant the lower margin business weighed on the overall results more heavily than for FY2013.
Increased costs and interest payments, including a 34.2 percent jump in the cost of sales, further damaged profitability, while "intense competition" drove down the charter rates for bunker tankers, resulting in Marco Polo's contribution from jointly-controlled companies decrease by 48 percent against FY2013 from S$2.3 million (USD$1.8 million) to S$1.2 million (USD$920,000).
Nevertheless, Marco Polo remained upbeat about the year's results, noting that both its Group operations saw positive growth for the full financial year.
"The Group expects the offshore business of its Ship Chartering Operations to continue to spearhead its growth for the next 12 months as evident by the elevated utilization rates registered by its existing OSVs," the company added.
DNV GL this month announced "promising" results after tests of bunker saving hybrid propulsion technology it has developed for use on OSVs.
