Nam Cheong's revenue soared 172% to MYR379m in 4Q12

Check out its key growth driver.

Nam Cheong Limited reported a strong set of  4Q12 results with revenue and net profit increasing by 172% YoY and 87% YoY to MYR 379m and MYR 49m respectively. On a full-year basis, revenue climbed 45% to MYR 877m, while net profit increased 47% to MYR 137m. 

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Operating margin declined slightly to 16.4% compared to 17.3% a year ago, partly due to lower margins from its vessel chartering division. Several vessels were demobilized upon the charter fulfillment and later re-deployed for ensuing contracts.

The shipbuilding business achieved significant growth with revenue improving to MYR 839m (+49%) and gross profit increasing to MYR 164m (+56%). The group recommended a final dividend of 0.5 S cts for FY12 (FY11: 0.2 S cts), representing a payout of 19.2%.  

Looking ahead, Nam Cheong expects to deliver 19 vessels in 2013 and 25 vessels in 2014, up from 13 in 2012. Of the 19 vessels in its 2013 shipbuilding programme, it has already secured firm orders for 13.

Currently, the group has a gross order-book of MYR 1.3b, including a Letter of Intent (LOI) from Bumi Armada for USD130m for four units of Multi-Purpose Supply Vessels.

Outlook for the Malaysian offshore industry remains robust, underpinned by Petronas’ planned capex of MYR 300b across 2011-15. Management continues to see demand for small size AHTS vessels and PSVs, with the older vessels to be replaced by newer ones with higher technical specifications.

The group disclosed that it has already deployed half of its S$160m new capital – raised from its recent MTN issuance and placement of ordinary shares – into its 2013 shipbuilding programme. We expect the remainder to be progressively utilized over the medium term. Net gearing improved to 0.40x as at end-2012 (end-2011: 0.63x).