Singapore-listed offshore-vessel builder Nam Cheong posted a profit of MYR39.3 million (USD10.9 million), down 45% year on year (y/y) for the first quarter ended 31 March 2015.
Revenue fell 20% to MYR326 million in first-quarter 2015, compared with MYR407 million in first-quarter 2014. Similarly, gross profit dropped by 21% to MYR68.3 million in the first quarter of 2015 from MYR86.28 million in the same period last year.
The decrease in earnings was mainly due to the lesser number of six vessels delivered in first-quarter 2015, compared with first-quarter 2014’s delivery of seven units. Revenue for the company’s vessel chartering segment of MYR15.6 million was down by 35% due to lower vessel utilisation rate, compared with MYR24.1 million achieved in the first quarter of 2014.
Despite the lower revenue, Nam Cheong stated in its filing to the Singapore Exchange that the gross profit margin for the shipbuilding segment was consistent y/y at 20%, whereas gross profit margin for the vessel chartering segment was maintained within the range of 38% to 40%. As a result, the company’s overall gross profit margin was maintained at 21%. Currently, the company’s orderbook stands at 22 vessels worth a total of MYR1.6 billion for recognition up to 2016.
Going forward, Nam Cheong sees opportunities in the growing replacement market such as in the anchor handling tug supply (AHTS) vessels. According to IHS Maritime’s data, 21% of the global AHTS fleet, excluding the ones in the United States and Canada, is more than 25 years old and are in need of replacement.
Moreover, the data also cited that the global AHTS vessels, excluding the ones in United States and Canada, aged less than 15 years old enjoy 37% better utilisation than AHTS with vessels of more than 15 years of age.
Meanwhile, Leong Seng Keat, CEO of Nam Cheong, told IHS Maritime that despite the supply glut in platform support vessel (PSV) market, there are still some enquiries for newbuilds.
“We still hear some enquires for PSVs coming from the regions of West Africa, Mexico, and India. These enquires are from indigenous owners seeking to own PSVs with specifications customised to regional waters.” said Leong.