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Nam Cheong's Q3 net profit jumps 85%, boosted by forex gain
NAM Cheong, Malaysia's largest offshore support vessel (OSV) builder, reported on Thursday a net profit of RM760,000 for the third quarter ended September 30, 2016, 85 per cent higher than its net profit of RM410,000 a year ago.
Its bottomline got a boost from other income, which rose to RM15.4 million compared to RM3.2 million a year ago due largely to a higher net foreign exchange gain of RM12.2 million.
Revenue fell 86 per cent to RM25.8 million from RM189.3 million a year ago due mainly to lower shipbuilding revenue recognised.
Revenue from the shipbuilding segment was 91 per cent lower than a year ago at RM16.6 million as a result of the slower progressive recognition of revenue from vessels sold. However, the group's vessel chartering segment saw contributions rise 29 per cent to RM9.2 million on higher utilisation rate.
Leong Seng Keat, Chief Executive Officer of Nam Cheong, expects vessel sales and shipbuilding activities to remain slow moving into 2017.
Due to the challenging market conditions, the group has deferred the schedule of deliveries of its vessels currently under construction, both at customers' requests and also at its own initiative.
As of end Sept, its order book stood at RM1.05 billion, comprising a mix of OSVs due for deliveries up till 2018.