It states that the increase aligns with expansion plans and is based on the company's performance in FY2023.

INTEGRATED marine logistics company MarcoPolo Marine stated that the rise in wages, salaries, and bonuses in FY2024 was "consistent with the expansion plans" the group has implemented in recent years.

This announcement comes in response to inquiries from the Securities Investors Association (Singapore), or Sias, prior to the company's annual general meeting on Friday, January 17th.

Sias had requested clarification on the company's "substantial increase" in wages, salaries, and bonuses from S8.2millioninFY2023toapproximatelyS11 million in FY2024, despite a 3 percent decline in total revenue, which included a significant drop in ship repair revenue.

Marco Polo Marine responded by stating that a significant portion of the bonuses paid out in FY2024 was based on the group's performance in FY2023, when its revenue and adjusted profit after tax increased by 48 percent and 83 percent year-on-year, respectively.

The company emphasized that despite the decline in revenue in FY2024, gross profit and adjusted net profit after tax saw year-on-year increases of 6 percent and 4 percent, respectively.

Additionally, Marco Polo Marine noted that one of its three docks was dedicated to the construction of a commissioning service operation vessel (CSOV) from May to August of the previous year, which limited the group's capacity for revenue-generating ship-repair projects.

Sias inquired about whether the completion timeline for Marco Polo Marine's CSOV had shifted from the first quarter to October of the previous year, and then to the first half of the current year. The association also sought to understand the operational challenges or technical complexities encountered during the design and construction phases.

In response, the company stated that the CSOV is now "in the final stages of completion and is scheduled to be ready by the end of February." Marco Polo Marine cited the shortage of skilled and experienced labor in early 2024 as a contributing factor to the delay, but noted that the issue has been largely resolved since then.

Furthermore, the company confirmed that the construction of the CSOV "has remained within the initial budget of US$60 million."

Sias further inquired about how Marco Polo Marine would compete against Chinese shipyards, considering the decreased demand for ship-repair services due to the reopening of yards in China.

The company replied that although there was an initial decline in demand for such services, it has since "returned to normal." They added, "In FY2024, the average utilization of our docks for ship repair was 91 percent, compared to 84 percent in FY2023."

Sias also noted that the company had announced on January 2 that its audited financial statements contained "certain material reclassification differences" compared to its unaudited financial statements, amounting to as much as S$6.5 million. Sias requested further details on the adjustments, which the company clarified were made to correct an arithmetic discrepancy in the non-controlling interest balance. Marco Polo Marine explained 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 November 28, 2024, necessitating a reclassification adjustment.

Additionally, Sias asked about the key strategic initiatives driving 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. They emphasized that the sector's potential for growth is substantial, as many of these projects are still in the early stages or have yet to begin. Marco Polo Marine intends to expand its exposure to the offshore wind-energy sector in Asia.