INTEGRATED marine logistics company Marco Polo Marine said that the increase in its wages, salaries and bonuses in FY2024 was “in line with the expansion plans” that the group had undertaken in recent years.
The company was responding to questions from the Securities Investors Association (Singapore), or Sias, ahead of its annual general meeting on Friday (Jan 17).
Sias had asked the company to justify its “significant increase” in wages, salaries and bonuses from S$8.2 million in FY2023 to about S$11 million in FY2024, given that the company’s total revenue had fallen by 3 per cent, including a substantial drop in ship repair revenue.
Marco Polo Marine replied that a large part of the bonuses paid out in FY2024 was based on the group’s performance in FY2023, when its revenue and adjusted profit after tax had gone up by 48 per cent and 83 per cent year on year, respectively.
It highlighted that even though revenue declined in FY2024, gross profit and adjusted net profit after tax recorded a year-on-year increase of 6 per cent and 4 per cent, respectively.
It also noted that one of its three docks had been used exclusively for the building of a commissioning service operation vessel (CSOV) from May to August last year, reducing the group’s capacity for revenue-generating ship-repair projects.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sias asked the company whether the completion timeline for its CSOV had shifted from the first quarter to October last year, and then to the first half of this year. It also wanted to understand the operational challenges or technical complexities that have arisen in its design and construction phases.
Skilled labour
The company responded that the CSOV was now “in the final stages of completion and is slated to be ready by end-February”. It cited the shortage of skilled, experienced labour in early 2024 as a factor for the delay. That issue has since been largely resolved.
Marco Polo Marine also confirmed that construction of the CSOV “has remained within the initial budget of US$60 million”.
Sias also queried how the company would compete against Chinese shipyards, given that the reopening of the yards in China have lowered demand for ship-repair services.
The company replied that while demand for such services had initially declined, it has since “returned to normal”.
“In FY2024, the average utilisation of our docks for ship repair was 91 per cent, compared to 84 per cent in FY2023,” it added.
Sias noted that the company had announced on Jan 2 that its audited financial statements contained “certain material reclassification differences”, compared with its unaudited financial statements, with those differences amounting to as much as S$6.5 million.
The company had said that these adjustments were made as the non-controlling interest balance required an adjustment to correct an arithmetic discrepancy, to which Sias asked for further details.
Marco Polo Marine said that there was an overstatement of the group’s non-controlling interest balance against its foreign currency translation reserves in its FY2024 results announced on Nov 28, 2024. A reclassification adjustment was thus needed to correct the non-controlling interest balance.
Sias also asked for the key strategic initiatives that would drive growth in the offshore support vessel segment.
In response, the company pointed out that governments in Asia have set “ambitious, multi-year policy targets” to meet their offshore wind energy demands.
“The sector’s potential for growth is substantial, as many of these projects are still in the early stages or have yet to begin.”
The company thus intends to expand its exposure to the offshore wind-energy sector in Asia.
Shares of Marco Polo Marine closed down S$0.001 or 1.8 per cent at S$0.055 on Friday.
