Nam Cheong sinks into the red with $641.1m loss

Blame the asset impairment and write-down.

Singapore-listed shipbuilder Nam Cheong has reversed its profits to a net loss of RM 2.02b ($641.1m) in the past quarter ending in June.

According to the group, this is due to the assets impairment and write-down of RM 2.0b which consists of impairment on property, plant and equipment, investment in associate, investment properties, and trade and other receivables of RM487.6m as well as inventories written down of RM1.51b.

Meanwhile, the group's revenue for the quarter was 29% higher to RM151.2m. This is due to the strong shipbuilding revenue, which went up by 17% to RM133.7m.

Its other income of RM1.2m was lower as compared to RM2.5m recorded last year mainly due to the overprovision of interest income in 1Q17.

Selling and administrative expenses decreased 27% to RM7.6m during 2Q17, mainly due to the decrease in staff cost.

Finance costs increased to RM9.9m in 2Q17, as a result of lower interest expenses capitalised as vessels’ cost of construction.