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Nam Cheong returns to the black in Q2

OFFSHORE marine player Nam Cheong reported a net profit of RM34.74 million (S$11.6 million) for the second quarter ended June 30, versus a loss of RM2.02 billion a year ago, mainly due to a foreign exchange gain and the absence of asset impairments and write-downs.

Revenue for the quarter under review was 16 per cent lower at RM127.19 million owing to lower revenue recorded from the shipbuilding segment, while earnings per share clocked 1.66 sen, compared to a loss per share of 96.54 sen previously.

For the half year, net profit climbed to RM557.22 million, compared to a loss of some RM2.07 billion a year ago, due to the restructuring of the group’s debt with trade creditors which resulted in the waiver of debts amounting to RM557.5 million.

Tiong Su Kouk, executive chairman of Nam Cheong, said: “While we have made significant progress in our restructuring efforts, we recognise that industry challenges remain. Cost and capital structure optimisation remains top priority and we will continue to tighten control for sustainable long-term growth.”

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The group’s proposed rights issue of up to 2.09 billion new ordinary shares at an issue price of S$0.014 for each rights share has received in-principle approval from the Singapore Exchange in July. 

Mr Tiong added: “We hope shareholders will continue to lend support to the group by subscribing for our recently proposed renounceable non-underwritten rights issue, which will further strengthen our financial position and sustain our businesses for the long term."

He has made an irrevocable undertaking, with the deposit of a committed sum of RM50 million.

Net proceeds from the proposed fund-raising exercise will be used mainly for working capital and partially for the cash payment to creditors, who had elected to receive the cash payment for a portion of their unsecured debt, as well as for the operations of the group. The rights issue closes on Sept 20.

Shares in Nam Cheong will resume trading on Aug 23.