OFFSHORE support vessel (OSV)-focused Nam Cheong turned profitable in the third quarter on a one-time gain from debt waiver and improved gross profit margins.

Net profit for the three months ended Sep 30 was RM396.01 million (S$130.38 million), reversing from a net loss of RM48.79 million for the year-ago period.

Earnings per share for Q3 was 17.6 Malaysian sen compared to loss per share of 2.32 Malaysian sen for the year before.

Revenue jumped 20 per cent to RM94.71 million on increased contributions from both the shipbuilding and vessel chartering divisions.

Nine-month net profit was RM953.32 million, reversing from a net loss of RM2.12 billion.

The OSV-focused group flagged a Q3 one-time gain of RM353.8 million from waiver and extinguishment of its debts following its recently completed restructuring exercise. This lifted its other income to RM388.4 million, allowing the group to reverse from a previous year's loss and turn in a Q3 profit after tax of RM394.0 million.

Also helping to bolster the group's bottomline is a more than five-fold increase in its Q3 gross profit.

Gross profit for the three months to Sept 30 surged to RM25.6 million, up from RM3.9 million for the year before. Overall gross margins expanded to 27 per cent from 5 per cent mainly on increased revenue contributions from the vessel chartering division.

The group recorded a Q3 finance income of RM7.3 million after the adjustment of its interest expense resulting from the execution of the scheme of arrangements linked to its debt restructuring exercise. This compared favourably against RM27.45 million in finance costs incurred in Q3 FY17.

Net asset value per share was negative 7.3 Malaysian sen as at Sept 30, compared to negative 79.1 Malaysian sen a year ago.

Total equity was negative RM515.58 million as at the end of Q3 FY18.

Nam Cheong closed at 1.1 Singapore cent on Tuesday, up 0.1 Singapore cent before the release of its financial results this morning.