Singapore-listed Nam Cheong wins contract to sell five vessels for $89.3m

Offshore marine group Nam Cheong has secured a contract to sell five vessels to a repeat customer for around US$70 million (S$89.3 million).

The mainboard-listed group said on Tuesday it sold four Emergency Response and Rescue vessels and one Anchor Handling Towing Supply vessel to Sentinel Marine, an Aberdeen-based company that owns and operates offshore support vessels.

Nam Cheong, Malaysia's largest offshore support vessel builder, had sold four Emergency Response and Rescue vessels to Sentinel a year ago.

All five vessels are being constructed in Nam Cheong's subcontracted yards in China.

They are scheduled for delivery in 2015 or 2016 and are expected to add to the group's earnings for the three financial years starting this year.

With the latest contract wins, Nam Cheong's order book stands at about 1.5 billion ringgit (S$572 million).

Nam Cheong chief executive Leong Seng Keat said this was a "good reflection of the upbeat offshore support vessel segment".

He said Nam Cheong was encouraged by the "repeat business" from Sentinel, which he said "shows a strong vote of confidence" in the quality of Nam Cheong's vessels.

"We are confident that shallow and mid-water regions will continue to see a pickup in demand for offshore support vessels," Mr Leong added.

"With global exploration and production spending expected to see another record-setting year in 2014, we are optimistic of an exciting year ahead."

Nam Cheong's shares were half a cent up at 31 cents as at 10.20am.