Nam Cheong Limited reported profit attributable to owners of the parent of RM45.8 million for the three months ended 30 September 2025, a 3% year-on-year decline that the company linked to higher finance and one-off litigation costs, even as firmer demand for long-term charters underpinned earnings.
Revenue came in at RM170.8 million, down 15% year-on-year but up 6% quarter-on-quarter, entirely from the vessel-chartering segment. No dividend was declared for the quarter.
All revenue was generated by chartering activities. Vessel utilisation averaged 70%, versus 86% a year earlier, while 60% of the fleet was on long-term contracts. Gross profit slipped 24% YoY to RM87.5 million; the gross margin held above the 50% level at 51.2%, easing 6.4 percentage points from the high base in 3Q2024 mainly because of scheduled maintenance.
Operating profit fell 26% YoY to RM61.8 million after recognising RM10.7 million of other operating expenses, which included a one-off litigation settlement with a supplier. Finance costs rose 9% YoY to RM5.9 million, trimming net earnings.
Management said the quarter’s sequential revenue growth reflected the phased commencement of secured multi-year charters. Excluding exceptional items and associates’ results, core profit improved 8% quarter-on-quarter to RM53.3 million.
Looking ahead, Nam Cheong aims to lift long-term charter coverage to about 70% of its fleet to enhance earnings visibility and is evaluating opportunities to expand its more than 30-strong offshore support vessel fleet. The group also sees potential demand for newbuild OSVs as the global fleet ages—average vessel age now stands at 15–16 years—while financing constraints limit fresh supply.
Chief executive officer Leong Seng Keat noted that improved utilisation in the second half has reinforced the case for disciplined fleet growth. He added that stable cash flow from charter operations would underpin selective investments in newbuilds, positioning the group to capture opportunities arising from sustained activity in the offshore oil-and-gas sector.
Market conditions remain favourable, with Organisation of the Petroleum Exporting Countries production edging up to 28.43 million barrels per day in October 2025 and Malaysian cabotage rules continuing to restrict foreign vessel participation—factors the company expects will keep charter rates firm into 2026.
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