Nam Cheong net profit almost doubles to RM49.3m

As vessel sales spiked in 4Q12.

In a release, Nam Cheong Limited (Nam Cheong), an SGX Main Board-listed leading global offshore marine player and Malaysia’s largest Offshore Support Vessel (OSV) builder, reported that its net profit for the three months ended December 31, 2012 (4Q 2012), almost doubled to RM49.3 million, compared to RM26.4 million for the fourth quarter last year (4Q 2011). This was achieved on the back of a whopping 172% increase in 4Q 2012 revenue to RM379.2 million, from RM139.5 million in 4Q 2011.

Datuk Tiong Su Kouk, Executive Chairman and CEO of Nam Cheong, said: “The fourth quarter of last year saw strong vessel sales, which topped off a very robust year for Nam Cheong. We sold a record-breaking 21 vessels in 2012. We also sold more Platform Supply Vessels (“PSVs”), which generally contributes more to our revenue stream due to its larger size. Our success in securing a steady number of contracts speaks volume of our unique build-to-stock model, our ability to anticipate demand ahead of time, and our strong track record as Malaysia’s largest OSV builder. These fundamentals enabled us to ride on the offshore marine boom in Malaysia.”

Nam Cheong’s gross profit margin in 4Q 2012 remains at a healthy level of 20%, and the Group’s order book has hit RM1.3 billion as of December 31, 2012, with vessels scheduled for delivery until 2015.

“To reward our loyal shareholders, the Board has recommended a first and final dividend of 0.5 Singapore cents, totaling S$10.5 million. This represents a 150% increase from the past corresponding year (“FY 2011”) and a payout of 19.2% of the full year ended December 31, 2012 (“FY 2012”) profit attributable to shareholders,” Datuk Tiong said. 

Mr Leong Seng Keat, Nam Cheong’s Executive Director, said: “Our Group has benefited from the worldwide increase in activities by oil majors, as evident by the uptick in order wins that the Group experienced in 2012, especially from the booming oil markets in Brazil and West Africa. Going forward we believe that such investments will continue to bode well for us, as we continue to see a demand for AHTS vessels, PSVs and other offshore vessels, especially in the shallow water region. The demand for small size AHTS vessels remains strong as offshore service providers replace older vessels with new and higher specification vessels."