Nam Cheong Q4 net profit slumps 42% on higher S&A expenses

NAM Cheong posted a 42 per cent year-on-year slump in net profit to RM41.1 million (S$15.5 million) for the fourth quarter ended Dec 31, 2014 as higher overall selling and administrative expenses outweighed revenue growth.

Revenue at the Malaysian-based offshore marine group marked a 29 per cent jump to RM523.9 million, thanks mainly to the progressive recognition of revenue derived from the platform supply vessels (PSVs) sold in Q4 that contributed 40 per cent of the total shipbuilding revenue for the quarter.

While gross profit margin was maintained at the range of 15-20 per cent, the gross profit margin for the shipbuilding segment fell from 21 per cent a year ago to 15 per cent in Q4 mainly due to higher contribution from build-to-order vessels that have lower margins.

The board has recommended a first and final dividend of 1.5 Singapore cents per share, amounting to total dividends payable of S$31.4 million.