Nam Cheong defers vessel deliveries as Q3 earnings plunge to RM6,000

Building of a vessel at Nam Cheong’s shipyard in Sarawak, Malaysia.
Building of a vessel at Nam Cheong’s shipyard in Sarawak, Malaysia.PHOTO: NAM CHEONG

SINGAPORE - Offshore marine group Nam Cheong reported on Friday (Nov 13) that its net profit for the third quarter ended Sept 30 was almost wiped out to RM6,000 (S$1,945) from RM126.3 million a year ago.

Group revenue fell 69 per cent to RM189.3 million from RM618.6 million in the year-ago quarter.

Revenue from the shipbuilding segment fell by 69 per cent to RM182.1 million from RM595.1 million, mainly due to the completion and delivery of two vessels in the quarter compared to six vessels in the year-ago quarter. Revenue from vessel chartering also fell, declining 70 per cent from to RM7.1 million.

Looking ahead, Nam Cheong said the outlook for the offshore & marine sector remains weak and it expects vessel sales and shipbuilding to remain slow.

In response to the increasingly challenging business environment, the company has deferred the schedule of deliveries of its vessels currently under construction, both at customers' requests and also at its own initiative.

Nam Cheong has a gross order book of approximately RM1.4 billion as at Sept 30, comprising a mix of OSVs due for deliveries up till 2016.