Nam Cheong swings to RM6.3m Q4 profit from RM899m loss on waiver of debts

MALAYSIAN offshore vessel builder Nam Cheong recorded a net profit of RM6.3 million (S$2.1 million) for the fourth quarter, a major turnaround from a loss of RM899.5 million in the year-ago period, which it credited mainly to the waiver of debts.

Revenue for the three months to Dec 31 rose 39 per cent to RM99.44 million from RM71.4 million in the year-ago quarter. This was driven by a significant increase in vessel chartering income, which jumped 147 per cent to RM48.8 million from RM19.7 million a year ago after Nam Cheong added seven vessels to its chartering fleet.

Earnings per share came in at nine Malaysian sen, reversing from a loss of 42.90 sen in the year-ago period.

Nam Cheong shares closed up 0.1 Singapore cent at S$0.007 on Tuesday.

For the full year, Nam Cheong saw net profit of RM959.6 million, reversing from a net loss of RM3 billion in FY2017.

Revenue for the 2018 financial year increased three per cent to RM329.9 million, mainly as a result of the waiver and extinguishment of debt, said the company.

Leong Seng Keat, Nam Cheong's group chief executive officer, noted an uptick in Malaysia's O&M activities and said the group has been deploying its vessels for charter in Malaysia. He expects the vessel chartering segment to continue its growth momentum.

The company will "continue to monitor and review its shipbuilding schedule, together with deferment and cancellation plans, for its remaining vessels which have yet to be delivered, through ongoing communication and consultation with its stakeholders".