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Marco Polo Marine books increase in Q2 profit

Marco Polo Marine books increase in Q2 profit
Singapore’s Marco Polo Marine has booked an increase in net profit in the second quarter ended 31 March 2015 despite a drop in revenue, amid the challenging operating conditions of the offshore market.

Profit for the second quarter of its financial year 2015 rose 26% to SGD3.8m ($2.85m) from SGD3.02m in the same period of last year.

Revenue during the quarter, on the other hand, fell 9% year-on-year to SGD29.72m due principally to the decrease in earnings from its ship chartering operations which more than offset the rise in contributions from its ship building and repair operations.

In the first half, Marco Polo Marine’s profit jumped 79% year-on-year to SGD11.21m, boosted by the one-time gain of SGD2.92m on the disposal of a subsidiary, recorded in the first quarter.

The offshore services and marine logistics firm noted that for its second quarter financial period, oil prices seemed to have stabilised at higher levels compared to the previous quarter, but they are still at levels about 50% lower than what they were in the corresponding period last year.

“Without a broad based recovery in sight against the backdrop of a tepid global economy, sentiments and demand for vessels are expected to continue to be adversely impacted with the offshore oil and gas exploration activities in the region remain muted,” Marco Polo Marine commented.

It added that its offshore business of the ship chartering operations is expected to be the main driving force behind its financial performance over the next 12 months, while its tugboat and barge division is anticipated to remain challenging.

The company also said its shipyard division “continues to be firmly and broadly engaged with its new shipbuilding programme, targeting mainly the mid-sized OSVs and in meeting internal demands as well as those from BBR.” PT Pelayaran Nasional Bina Buana Raya tbk (BBR) is an indirect subsidiary of Marco Polo Marine.

With regard to a jack-up rig order, the construction is progressing as planned, according to Marco Polo Marine.

“Amidst the persistent weakness of oil prices and cut-back on exploration work by operators, market daily charter rates for jack-up rigs are not expected to recover meaningfully from their current subdued levels,” it said.