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A Successful Restructuring on the Cards?

May 16, 2019

I met up with Sean Lee, CEO of Marco Polo Marine, recently. He managed to successfully restructure the company and re-list in Feb 2018. None of the other ailing offshore & marine peers have done the same.

Marco Polo just released its half-year results which appear to be underwhelming, with losses of S$2.6m. Digging a little deeper reveals that the situation has actually been improving. Stripping out the exceptionals from last year, revenue would have doubled to $12.4m in the half year till March. The headline numbers show an 18% drop. It is also EBITDA positive, a sign that the management is moving in the right direction.

Good news
1. Utilisation rates for its vessels have climbed to 43%, from an average of 20% for the whole of last year. Based on prospective orders, Sean estimates that utilisation can head towards 67% by the end of its financial year in September.
2. Ship repair is gaining traction, and the company managed to rope in new customers from Indonesia and Singapore. All are relatively big names which should give a kicker to the business in this sub-sector.

Not-so-good news
1. Indon-listed associate BBR is still suffering from losses due to the high cost of the vessels on the books, unlike Marco Polo which has written the vessels down significantly. Management is working to tackle the issue for BBR.
2. Ship building is still tough, with no new orders to-date.

#MarcoPolo  #AzureCapital