Nam Cheong wins another contract worth $72.1 million

Offshore shipbuilder on a hot streak.

With the latest contract win, Nam Cheong's order book to date has ballooned to RM1.3 billion, it revealed in a release announcing the new contract.

Under the deal, the global offshore marine player has sold six vessels worth a total of US$72.1 million to two of its existing customers.

Mr Leong Seng Keat, Nam Cheong’s Executive Director said: “In just the first three months of this year, we have seen robust sales indicative of strong industry momentum in the region and globally."

“Orders from existing customers are a demonstration of their satisfaction in our products and services, and their confidence in us to deliver again. We look forward to continuing our working relationships with them as partners, riding on this industry boom.”

The vessels sold are two 5,150 brake horsepower (“bhp”) Anchor Handling Towing Supply (AHTS) vessels and four Emergency Response and Rescue Vessels (ERRVs). 

The two AHTS vessels were sold to subsidiaries of Icon Offshore Berhad (Icon Offshore), one of Malaysia’s largest OSV groups with a portfolio of 32 vessels providing various logistic, oil and gas services in Southeast Asia and the Middle East. These vessels will be deployed in Malaysian waters. The AHTS vessels are being constructed as part of the Group’s build-to-stock series. Inclusive of the sale of these two AHTS vessels, Icon Offshore had bought a total of five AHTS vessels from Nam Cheong to date. 

Mr Leong said: “This win is indicative of the strong momentum in Malaysia’s offshore marine sector. The market for small size AHTS vessels remains buoyant, especially within the Malay basin being in the shallow water region, where we are seeing demand for new businesses relating to top side maintenance, hook up and commissioning, and the exploitation of reserve, as well as the need for older vessels to be replaced with new and higher specification ones.”

“We had a fruitful year in 2012, and expect the domestic momentum to continue for 2013, driven by the expanded capital expenditure from 2011 to 2015 of Petrolium Nasional Berhad (Petronas), Malaysia’s national oil company. Our close ties with Petronas-licensed companies continue to serve us well, as we are able to leverage on our track record and our unique build-to-stock model.” 

The four ERRVs will be sold to a Singapore-based company that provides ship management and chartering services. The ERRVs will be deployed in the North Sea, and constructed under Nam Cheong’s build-to-order model.

The six vessels are all of American Bureau of Shipping (ABS) class and will be built in one of Nam Cheong’s subcontracted yards in China. They are scheduled for delivery between the second quarter of 2013 and the fourth quarter of 2014. They are expected to contribute positively to the Group’s earnings for the financial years ending 2013 and 2014. 

“The build-to-order vessels have further enhanced our order book. They also demonstrate Nam Cheong’s versatility, and our ability and willingness to meet our customers’ requirements,” concluded Mr Leong.