Nam Cheong Q1 profit sinks to RM420,000 on absence of debt waiver

SINGAPORE - Despite revenue increase from its vessel chartering segment, a significant reduction in other income dragged first-quarter results for offshore marine firm, Nam Cheong.

For the three months ended March 31, 2019, net profit came in at RM420,000 (S$138,082), down from RM522.5 million last year.

The results translate to an earnings per share of 0.01 sen, against an earnings per share of 24.92 sen for the year-ago period.

No dividend has been declared, as the company is working through its restructuring arrangement, and wishes to enhance its financial strength, Nam Cheong said in a regulatory filing on Tuesday.

Revenue rose to RM29.9 million, which was 3.5 times the RM8.5 million in revenue a year earlier, mainly attributable to an earnings boost from its vessel chartering segment. This comes as there was a larger fleet and higher utilisation rates achieved for the quarter, the company said.

Nonetheless, other income plunged to RM13.6 million for Q1 2019, compared to RM549.5 million for Q1 2018, mainly due to the absence of the waiver of debts amounting to RM545.5 million recorded last year.

Looking ahead, Nam Cheong noted that in response to the uptick in the offshore and marine activities in Malaysia, the group has been deploying its vessels for charter in Malaysian waters, and expects the vessel chartering unit to continue its growth momentum.

The counter last traded at 0.9 cent, down 10 per cent or 0.1 cent, on Monday.

In April this year, the Malaysian offshore vessel building said it is still able to operate as a going concern, despite its independent auditors, Foo Kon Tan LLP, reporting that they cannot conclude whether the group can be assessed on a going concern basis.