Nam Cheong's Q3 profit more than doubles, revenue rises 81%

OFFSHORE marine group Nam Cheong saw net profit more than double to RM126.29 million (S$48.68 million), up from RM58.69 million previously, for the third quarter ended Sept 30, on the back of higher revenue.

Revenue surged 81 per cent to RM618.62 million as both its shipbuilding and vessel chartering businesses reported higher revenues. Earnings per share worked out to 6.01 Malaysian sen, rising from 2.79 sen previously.

While cost of sales were up 85 per cent to RM469.9 million, gross profit was 70 per cent higher at RM148.73 million in line with higher revenue and healthy gross profit margins. Meanwhile, operating profit for the quarter came to RM134.96 million, slightly more than double that of Q3 2013.

Nam Cheong has secured a record order of 25 vessels worth about US$505 million year-to-date.

Group chief Leong Seng Keat said: "Nam Cheong is seasoned in weathering both downturns and buoyant periods in the offshore and marine industry evidenced by our long operating history. Moreover, we operate in the highly resilient shallow water segment which we deem as recession proof due to the lower cost of oil production compared to the deepwater segment."

He went on to add: "Further we see growing demand for modern OSVs, especially those which are equipped with fuel efficient features. By optimising our vessels for fuel efficiency, we help put our customers in a better position to win jobs, particularly in periods of low oil prices when the oil majors are likely to face margin squeeze."