Sponsored By

Nam Cheong Q1 earnings hit by cancellation of vessel by PerdanaNam Cheong Q1 earnings hit by cancellation of vessel by Perdana

Malaysia’s OSV builder Nam Cheong has been hit by a reversal of revenue and a net loss in the first quarter of 2016, due mainly to a contract cancellation on a vessel that is in an advanced stage of construction.

Lee Hong Liang, Asia Correspondent

May 12, 2016

1 Min Read
Kalyakan - stock.adobe.com

In the quarter ended 31 March 2016, Singapore-listed Nam Cheong reported a loss of RMB40.15m ($9.98m) as against the profit of RMB39.3m in the same period of 2015.

The offshore vessels builder also registered a negative revenue of RMB93.08m during the quarter, a reversal from the revenue of RMB326.3m in the previous corresponding period.

The lower topline was mainly due to the reversal of revenue from Perdana Petroleum cancellation of an accommodation work barge (AWB), which is already at an advanced stage of construction. And as a result of adverse foreign exchange movement, Nam Cheong slipped into the red.

“Admist a weak O&M environment, the progress of vessel sales and shipbuilding has remained slow,” said Tiong Su Kouk, executive chairman of Nam Cheong.

“Additionally, during the quarter, we were notified of a contract cancellation by Perdana for an AWB which was sold in June 2014. However, a 20% deposit of $8.4m has been forfeited by Perdana in favour of Nam Cheong,” Tiong explained.

“Apart from this isolated case, we have not faced any customer requests for cancellations. We will continue to maintain close and constant communication with all customers to keep abreast of developments, while tapping on pokctes of demand trends for the potential sale of this AWB,” he added.

The lower number of vessel deliveries during the first quarter also affected the group’s revenue. One vessel was delivered during the quarter compared to six delivered in the same quarter of 2015.

Nam Cheong has an orderbook of approximately RMB1.1bn as at 31 March 2016, comprising a mix of OSVs due for deliveries up until 2018.

About the Author

Lee Hong Liang

Asia Correspondent

Singapore-based Lee Hong Liang provides a significant boost to daily coverage of the Asian shipping markets, as well as bringing with him an in-depth specialist knowledge of the bunkering markets.

Throughout Hong Liang’s 14-year career as a maritime journalist, he has reported ‘live’ news from conferences, conducted one-on-one interviews with top officials, and had the ability to write hard news and featured stories.

 

Get the latest maritime news, analysis and more delivered to your inbox
Join 12,000+ members of the maritime community

You May Also Like