Nam Cheong Posts Strong Results Performance for Q2

Nam Cheong Limited (Nam Cheong), a leading global offshore marine player and Malaysia’s largest Offshore Support Vessel (OSV) builder, reported strong results performance with a 83 % surge in net profit to RM 41.1 million for the three months ended June 30, 2013 (2Q 2013), from RM 22.5 million in the corresponding period last year (2Q 2012).

Robust vessel sales boosted a revenue growth of 84 % to RM 275.3 million in 2Q 2013, from RM 149.8 million in 2Q 2012.

Outlook

According to analysts (Barclays sees 10 pct rise in energy E&P spending 2013 – Reuters , June 4, 2013), overall international exploration and production (E&P) spending is expected to reach a record US$678 billion by end 2013. In Malaysia, Petronas plans to develop 25% of Malaysia’s 106 marginal fields containing 58 million boe in total (The Star, February 26, 2012). In addition, enhanced oil recovery projects will be stepped up to spur the country’s oil and gas industry’s ongoing quest for hydrocarbons and as part of Petronas’ RM300 billion capital expenditure, of which a n investment of US$12 billion has been allocated over 30 years between Petronas and Shell to recover oil off Sarawak and Sabah (Borneo Online, June 18, 2013).

As at August 13, 2013, the Nam Cheong’s order book was approximately RM1. 4 billion in value, with 22 vessels contracted for recognition up to 2015. The Group ’s shipbuilding programme comprises a mix of OSVs for shallow and deep water, for deliveries beyond 2014.

Nam Cheong Highlights:

• On track to set new record in vessel sales in FY2013;
• Nine consecutive quarters of profitability since May 2011 listing;
• Achieves healthy gross profit margin of 20 %;
• Order book at RM1. 4 billion with 22 vessels contracted for recognition up to 2015;
• Healthy balance sheet; net gearing improves to 0.31 times as at June 30, 2013.

Nam Cheong, August 13, 2013