Nam Cheong posts changes to Q2 results

Troubled shipbuilder Nam Cheong has announced a number of amendments relating to equity and liabilities in its latest set of financial results.

The Malaysian firm said in a filing to the Singapore Exchange yesterday that its share capital stood at RM81.2 million (S$25.8 million) as at June 30, compared with RM406 million at the same time a year earlier.

In its earlier earnings report on Aug 14, the company had stated that its share capital was RM406 million.

Nam Cheong also clarified yesterday that it incurred accumulated losses of RM1.19 billion for the second quarter, reversing from the retained earnings of RM556.8 million in the same period the year before.

Accumulated losses for the half-year ended June 30, as a result, were RM950.4 million, in contrast to retained earnings of RM58.4 million previously.

In the initial report, accumulated losses had been put at RM1.52 billion for the quarter, and RM1.28 billion for the half year.

Nam Cheong said that on May 15, the issued and paid-up share capital of the company was reduced from HK$1.05 billion (S$183 million) divided into around 2.1 billion ordinary shares of 50 Hong Kong cents each, to HK$210.3 million divided into 2.1 billion ordinary shares of par value 10 Hong Kong cents each.


    Q2 NET LOSS: RM2.02 billion (Not meaningful)

    Q2 REVENUE: RM151.2 million (+29%)

The credit arising from the capital reduction in the sum of HK$841.3 million was credited to the accumulated loss of the company, it said.

Nam Cheong reported a whopping second-quarter net loss of RM2.02 billion last month - a marked reversal from a profit of RM3 million in the same period last year. This was due to massive asset impairment and write-down totalling RM2 billion for the three months ended June 30.

The firm, like many of its peers, has been hit hard by the protracted downturn in the offshore and marine sector.

Nam Cheong has defaulted on the $2.25 million coupon and $90 million principal owed to the holders of its Series 002 bonds due yesterday. It also failed to pay the $5 million coupon owed to holders of its $200 million Series 003 bonds, which was due on Saturday.

The company has said it intends to organise discussion groups with bond holders.

Trading of Nam Cheong shares was suspended last month after the firm said it wanted to "temporarily cease" all debt repayments in a final bid to conserve cash and avoid liquidation.

In June, OCBC filed a US$10 million (S$13.6 million) claim against Nam Cheong in a Malaysian court. AmBank followed up with a RM70.4 million claim earlier this month.

A version of this article appeared in the print edition of The Straits Times on August 29, 2017, with the headline 'Nam Cheong posts changes to Q2 results'. Print Edition | Subscribe