Marco Polo Marine Ltd. · SGX:5LY
Marco Polo Marine — H1 2021 Earnings Presentation
27 slides from Marco Polo Marine's earnings presentation, May 2021
Slide 1: Marco Polo Marine Limited 1HFY2021 Results Briefing
Marco Polo Marine Limited 1HFY2021 Results Briefing MAY 2021
Slide 2: Disclaimer
DISCLAIMER This presentation prepared by Marco Polo Marine Ltd (the "Company") does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale,
Slide 3: Corporate Overview
Corporate Overview Regional integrated marine logistics company which principally engages in ship chartering and shipyard businesses Stock Data SGX:5LY ~S$65m 48.5% 17.2% 8.6% 8.6% Stock Code Market Cap Free Float Major Shareholders 3
Slide 4: Complementary Business Segments
Complementary Business Segments Marco Polo Marine Ltd Ship Chartering Ship Building & Repair MAINTANENCE ○ 11 OSVs and 2 Maintenance Work vessels SHIPBUILDING ○ One of the larger shipyards in Indonesia WORK VESSELS (MWV)s (average age: 4-13 years) ○ Ship building, conversion and outfitting OSVs (AHT
Slide 5: Milestones
Milestones 1991 Dec 2005 Sep 2007 Jan 2009 May 2009 Nov 2009 Marco Polo Marine Acquisition of MPM floated on the Listed on SGX Drydock 1 in Drydock 2 in founded in 1991 waterfront land in Singapore Stock Main Board operation operation Batam Exchange Oct 2019 Feb 2018 Oct 2017 Dec 2013 Jan 2012 Aug 2
Slide 6: Shipyard Operations
Shipyard Operations Well-organized covered workshops and warehouses Drydock 1: 150m x 40m x 8.5m Drydock 2: 175m x 40m x 8.5m Drydock 3: 220m x 45m x 9.0m 6
Slide 7: Offshore Support/Marine Logistics
Offshore Support/Marine Logistics 11 OSVs and 2 MWVs AHT 5000+ BHP Series: MP Valour 3300 dwt PSV MP Lagenda MP Perkasa MP Kestria: 12000 BHP MP Prowess: 8000+ BHP DP2 Series MP Prevail: 9000 BHP AHTS, DP2 MP Nautical Aleesya MP Dynamic 7
Slide 8: Regional diversified customer base with established names
Regional diversified customer base with established names Shipyard Division (Selected Clients) Megadrill Services Limited Ship Chartering (Selected Direct and End-Charterers) 8
Slide 9: Marco Polo Marine's Recovery Journey
Marco Polo Marine’s Recovery Journey 60.0 Economic Slowdown + boom in US shale oil 120 During the Oil & Gas (O&G) production hit the O&G sector and the ancillary boom, Marco Polo saw a marine and offshore sectors. 40.0 surge in profitability. Marco Polo reported a sharp 100 drop in revenue and a pre
Slide 10: Highlights
Highlights Operational EBITDA * (S$m) 10 Strong Earnings Turnaround 8 7.8 • Since the debt restructuring in 2017, Group has generated positive 6 operational EBITDA over last 3 years S$m 4.0 4 2.0 2 0.9 Positive Outlook 0 FY2018 FY2019 FY2020 1HFY2021 • Early signs of potential recovery in O&G sector
Slide 11: Charting 2021 and Beyond
Charting 2021 and Beyond Strengthening Existing Business Segments New Business Ventures Sustainables Sector 11
Slide 12: Ship Chartering and Shipyard operations steadily recovering
Ship Chartering and Shipyard operations steadily recovering A potential recovery in oil and gas activity. Looking into 2021, Deloitte1 forecasts oil demand to recover strongly to just 4% below pre-COVID levels in its base case analysis. The Group’s active efforts to diversify its customers beyond th
Slide 13: Recovery in Average Daily Chartering Rates and Utilisation Rates
Recovery in Average Daily Chartering Rates and Utilisation Rates Across Vessels Average Charter Rates Utilisation % 120 70% Average daily charter rates index 100 60% 50% base 1QFY20=100 80 40% 60 30% 40 20% 20 10% - 0% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY
Slide 14: Stable recurring revenue from Ship Chartering and Ship Repairs
Stable recurring revenue from Ship Chartering and Ship Repairs S$m Segmental Revenue 20 Growing recurring revenue from ship repairs • 50-70% of business are from repeat customers 15 Ship repairs boosted by rise in demand 10 from the implementation of the Ballast Water Management system convention. •
Slide 15: Catching New Business Tailwinds
Catching Smart Fish Farms New Business Secured shipbuilding contracts from Singapore Aquaculture Technologies (SAT) to construct 2 smart fish farms. Construction is set to be completed by the end of Tailwinds FY2021. Tap on existing shipyard capabilities, adding another revenue stream to the Group.
Slide 16: Why is Marco Polo Marine pivoting to the sustainables sector?
Why is Marco Polo Marine pivoting to the sustainables sector? • Tap on the Group’s existing capabilities and increase its asset utilization rate • Diversify the Group’s customer base from the traditional O&G sector • Add another revenue stream to the Group The Oil and Gas Sector will continue to rem
Slide 17: How does profitability of sustainables contracts compare
How does profitability of these contracts from the sustainables sector compare to the Group’s traditional customers? Relatively comparable profit margins. While the costs of operating the projects may be slightly higher (e.g. higher labour costs in the country of operation), it is offset by higher c
Slide 18: 1HFY2021 Results
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Slide 19: 1HFY2021 Financial Highlights
1HFY2021 Financial Highlights Y-o-Y % S$ million 1HFY2021 1HFY2020 Net Cash of S$8.9m change Revenue 21.1 18.6 13.8% Gross Profit 5.0 3.4 46.9% Net Asset Value of S$105.5m Gross Profit Margin 23.8% 18.4% Net Asset Value/share of S$0.03 EBITDA* 3.9 1.1 254.5% Operational EBITDA** 4.0 2.1 88.1% On tra
Slide 20: Financial Performance Since Debt Restructuring
Financial Performance Since Debt Restructuring Revenue S$m Gross Profit (S$m) +13.8% Y-o-Y 23.8% 6 0.25 25 +71.9% H-o-H 21.7% 21.1 18.4% 0.2 20 18.6 16.8% 17.8 4 14.5% 15 11.7 0.15 12.4 7.4 8.7 12.3 11.5 8.2% 5.0 0.1 10 6.2 6.1 8.5 2 3.4 2.7 3.0 5 10.3 9.9 9.4 0.05 6.2 1.7 5.3 1.0 3.8 0 0 0 2HFY2018
Slide 21: 1HFY2021 EBITDA Performance
1HFY2021 EBITDA Performance Operational EBITDA** S$m Operational EBITDA Margin** 8 50.00% 6 30.00% 33.5% +90.5% Y-o-Y 4 5.9 18.9% 2 4.0 10.00% 2.1 11.4% -1.2 0 2HFY2019 1HFY2020 2HFY2020 1HFY2021 2HFY2019 1HFY2020 2HFY2020 1HFY2021 -10.00% -2 -9.7% **Excluding share of results from Joint Ventures 21
Slide 22: 1HFY2021 Segmental Performance
1HFY2021 Segmental Performance Ship Chartering Revenue S$m Ship Chartering Revenue remained Stable 9.9 9.4 • Average utilization rates remained stable from a year ago, 10 helped by diversification into chartering services serving 8 -5% yoy offshore windfarms and gradual recovery of O&G sector 6 • De
Slide 23: Robust Balance Sheet
Robust Balance Sheet As at 31 Mar 21 As at 30 Sep 20 S$’000 S$’000 Selected items Property, plant and equipment 71,735 74,898 Amount due from joint ventures 22,041 12,328 Inventories 1,498 903 Trade receivables 14,638 7,946 Trade payables 5,961 3,443 Other payables and accruals 5,063 4,427 Deferred
Slide 24: Investment Merits
Investment Merits Attractive Valuation • 0.6x P/B, backed primarily by hard assets including cash (11% assets) and PPE (56%). • The Group owns a shipyard in Batam (occupying more than 34 ha of land area) as well as 11 OSVs, 2 MWVs and 24 tug and barges. In 2017, • Vesselsvalue estimated that the 12
Slide 25: Thank You
THANK YOU Investor enquiries: emily@gem-comm.com
Slide 26: Frequently Asked Questions
cOn eo wd Nt. zs \o \ / an er, Varin’ FREQUENTLY ASKED QUESTIONS
Slide 27: What is the Group's cash burn each year?
What is the Group’s cash burn each year? The Group has always kept close tabs on cost and cashflow management, with a strong focus on remaining EBITDA positive. Excluding share of results from Joint Ventures, the Group has successfully maintained its EBITDA positive position over the last 3 years. S