Nam Cheong's Q2 profit up 53% to RM63 million due to strong demand for vessels

Offshore marine player Nam Cheong has reported a 53 per cent jump in its second quarter net profit to RM63 million, thanks to buoyant demand for its vessels

Net profit rose as revenue spiked 38 per cent to RM378.8 million for the three months ended June 30.

The company, which Malaysia's largest offshore support vessel builder, announced on Friday that its core shipbuilding segment achieved a 37 per cent rise to RM355.6 million.

The improvement was mainly attributable to the progressive recognition of revenue from the sale of platform supply vessels which contributed RM228.5 million or 60 per cent to total shipbuilding revenue in the quarter.

Nam Cheong's vessel chartering segment also saw a 44 per cent surge in revenue to RM23.2 million, resulting from the addition of two new vessels to its chartering fleet.

The shipbuilding segment contributed 94 per cent of Nam Cheong's top line while the vessel chartering segment contributed 6 per cent.

Net profit for the half year surged 75 per cent to RM134.4 million as revenue rose 54 per cent to RM786.1 million.

Earnings per share was 3.01 sen in the second quarter, up from 1.94 sen previously.

Net asset value per share was 47.6 sen at the end of June, up from 44.6 sen at the end of December.

Executive chairman Tiong Su Kouk said: "This solid set of financial performance points to the buoyant demand for our vessels amidst increasing opportunities in the industry."

The company's order book as at July 1 stands at about RM1.7 billion, with orders for both shallow and deep water offshore support vessels that are due for deliveries up to 2015.

Nam Cheong shares dipped a cent to 46.5 cents as at 10.57am on Friday. It reported its earnings before markets opened.