Nam Cheong Q2 earnings slump 83%

SINGAPORE - Mainboard-listed offshore marine group Nam Cheong said Thursday that its net profit for the second quarter ended June 30 fell 83 per cent to RM10.68 million (S$3.73 million) from RM63.3 million in the year-ago period, as low oil prices and slowing production demand continue to hurt its shipbuilding and vessel chartering businesses.

Revenue for the quarter declined 49 per cent to RM192.66 million with revenue from its shipbuilding segment halving on lower oil prices. Revenue from its vessel chartering business tumbled 42 per cent.

Earnings per share was lower at 0.51 sen from from 3.01 sen a year ago.

For the half year, net profit fell 63 per cent to RM49.98 million while revenue was 34 per cent lower at RM518.91 million.

Said Nam Cheong executive chairman Tiong Su Kouk: "The macro volatilities have continued to present challenges for all industry players during the period and we have likewise seen a slowdown in new orders."

But, he added: "We have gone through many cycles over the past four decades of running the business and have in place strategies that have continued to help us to counter downcycles. We remain optimistic on our global market position as the cost leader in the offshore marine space, which will allow us to capture the potential industry uptick as soon as the market turns favourable."

The group has an order book of approximately RM1.5 billion, comprising a mix of offshore supply vessels for deliveries up till 2016.

It also has strong cash and cash equivalents of RM571.1 million with net gearing at 0.83 times, Nam Cheong said.