by millionairemind » Wed May 12, 2010 8:09 am
Published May 12, 2010
Marco Polo Q2 net more than doubles
Gain from disposal of vessels helped profit rise to $7.44m
By VINCENT WEE
INTEGRATED shipping company Marco Polo Marine saw second-quarter net profit more than double to $7.44 million from $3.2 million a year ago, helped by the gain from disposal of vessels as part of a sale-and-leaseback arrangement.
The three months ended March 31 saw a two per cent year-on-year rise in turnover to $15.5 million but gross profit dipped 3 per cent because of lower margins.
The gain from the disposal of vessels resulted in a rise in 'other operating income' to $2.1 million from $416,000.
For the first half-year ended March 31, net profit nearly trebled to $12.2 million from $4.47 million in H1FY09 as turnover rose 14 per cent to $27.5 million. The rise in earnings was also mainly due to $6.0 million in 'other operating income', of which $5.7 million came from gain on disposal of vessels as part of the sale-and-leaseback programme.
Earnings per share increased from 1.56 cents to 4.00 cents.
The increase in revenue was mainly from ship chartering operations, but this was offset partially by lower ship building and repair revenue from shipyard operations.
Ship chartering revenue rose 57.3 per cent to $17.3 million from $11.0 million in H1FY09 primarily as a result of increased operating fleet size from 45 vessels as at the end of the previous corresponding period to 58 vessels as at March 31, 2010.
Marco Polo attributed the 22.1 per cent fall in shipyard revenue to $10.2 million from $13.1 million in H1FY09 mainly to lower ship building revenue which more than offset an increase of about $3.6 million in ship repair revenue following the full operation of both the dry docks from the beginning of the current financial year.
First-half group gross profit of $8.2 million saw Marco Polo achieving a gross profit margin of 29.9 per cent in H1FY10 as compared to a gross profit of $8.1 million and a gross profit margin of about 33.6 per cent in H1FY09.
Marco Polo does not report segmental earnings breakdowns and does not give revenue on a quarterly basis.
To reduce disruptions to chartering operations, the sale-and-leaseback programme is being conducted in stages throughout the current financial year, Marco Polo said.
'Although this programme will have some short-term disruption to our chartering operations during the de-flagging and re-flagging exercise, the longer term benefits will be the growing marine logistic demand in Indonesia for our Indonesian flagged vessels and the fleet expansion we can undertake with our lightened balance sheet,' said CEO Sean Lee.
Compared to the previous financial year, higher chartering revenue from a growing fleet of vessels, new revenue contribution from ship repair and the completion and deliveries of more sophisticated AHTS vessels will diversify revenue base as well as add to profit growth in the current financial year, it said, adding that performance is expected to improve this year over FY09.
Marco Polo shares closed one cent higher at 44.5 cents yesterday.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.