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Nam Cheong sinks deeper into the red in Q1

Malaysia’s Nam Cheong has sank deeper into the red with a loss of MYR47.51m ($11m) in the first quarter compared to the deficit of MYR40.12m in the same period of last year.

The OSV builder blamed the loss mainly on foreign exchange loss and share of loss in jointly controlled entities and associate.

First quarter revenue was recorded at MYR17.89m as against a negative revenue of MYR93.08m in the year-ago period, due largely to the absence of a reversal of revenue from Perdana Petroleum’s cancellation of an accommodation work barge in the first quarter of 2016.

Loss-making Nam Cheong has been struggling to find buyers for its build-to-stock OSVs amid sluggish activities in the offshore market.

The company sees weak outlook for the offshore marine sector and anticipates the progress of vessel sales and shipbuilding to remain slow.

“We have taken proactive working capital management measures to strengthen our financial resilience during this period of weak vessel sales and shipbuilding activities,” said Leong Seng Keat, group ceo of Nam Cheong.

“At the same time, to better manage cashflows, we will continue to monitor and review our shipbuilding schedule together with deferment and cancellation plans, through ongoing communication and consultation with all stakeholders,” Leong said.

Last month, Nam Cheong announced that it is seeking a financial restructuring and holding discussions with its principal lenders to address debt maturities.

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