Nam Cheong profits soar

Malaysian offshore support vessel and operator Nam Cheong has had a robust second quarter with soaring revenues and profits. The company believes its outlook for the future looks even brighter.

Singapore-listed Nam Cheong reported today that during the second quarter its revenues rose 38% to MYR 378.8m ($117.75m), on which it earned net profit MYR 63m, a full 53% higher than its MYR 41.1m net profit earned in the corresponding quarter during 2013.

“This solid set of financial performance points to the buoyant demand for our vessels amidst increasing opportunities in the industry. On a year-to-date basis, Nam Cheong has achieved strong orders for 13 vessels worth approximately US$290 million,” said Nam Cheong Executive Chairman Datuk Tiong Su Kouk.

Shipbuilding remains the main driver of Nam Cheong’s revenue, accounting for a full 94% of the money brought in during the second quarter, and while vessel chartering only represents a mere 6% of overall income, the company happily notes that chartering revenues surged 44% to MYR23.2 million, resulting from the addition of two new vessels to its chartering fleet since the second quarter of 2013.

Nam Cheong’s order book as at 1July 2014 stands at approximately RM1.7 billion, comprising a mix of shallow and deep water OSVs that are due for deliveries up to 2015.

The company describes the global and regional outlook of the Exploration and Production (“E&P”) sector as remaining upbeat, with global spending expected to hit $1 trillion in 2017.

“As a result of steadily increasing crude oil prices over the past few years, strong interest in the oil and gas E&P sector is boosting strong demand and profitability for the offshore industry. In Malaysia, which continues to be Nam Cheong's most important market, the oil and gas sector's medium term performance is expected to be robust with Malaysian OSV operators to benefit from Petronas’ capital expenditure push,” it said.

Malaysia’s state-owned oil major Petronas has pledged to spend $14bn on rejuvenate mature assets and develop marginal oilfields.