Nam Cheong profit jumps 160% on vessel sale gain

It recorded revenue of $29.62m (RM117.9m).

Nam Cheong’s profit attributable to owners of the parent more than doubled, rising160% year on year to $19.82m (RM78.9m) in the first quarter (Q1) of 2026, driven by a vessel disposal gain and higher vessel utilisation, according to its financial report.

The offshore support vessel provider recorded revenue of $29.62m (RM117.9m), up 1.1% from $29.30m (RM116.6m) a year earlier, despite operating with a smaller fleet.

Vessel utilisation rose to 58% from 48% in the same period last year, supported by a higher mix of long-term charter contracts.

Gross profit fell to $12.46m (RM49.6m) from $14.15m (RM56.3m), whilst gross margin declined to 42.0% from 48.3%, due to higher operating costs for a vessel deployed in the Middle East.

Other income swelled to $15.20m (RM60.5m) from $1.08m (RM4.3m), mainly from a $14.90m (RM59.3m) gain on disposal of a vessel.

The Group also recorded $19.40m (RM77.2m) in proceeds from disposal of property, plant, and equipment.

Selling and administrative expenses rose 50.9% to $4.45m (RM17.7m), driven by higher staff costs, including share-based payment expenses.

Operating profit increased to $23.20m (RM92.3m) from $11.84m (RM47.1m), whilst finance costs fell to $1.03m (RM4.1m) from $1.31m (RM5.2m), reflecting lower borrowings.

Net profit improved to $20.45m (RM81.4m) from $8.85m (RM35.2m). Core profit attributable to owners of the parent rose to $19.90m (RM79.2m) from $6.61m (RM26.3m).

Cash and cash equivalents increased to $62.95m (RM250.5m) from $50.95m (RM202.8m), supported by customer collections.

Borrowings declined to $101.78m (RM405.1m) from $106.89m (RM425.4m). The net gearing ratio slipped to 0.17 times from 0.27 times.

The company expects vessel utilisation to increase in the second quarter of 2026 following the monsoon season.

It plans to add five vessels to its fleet for the remainder of 2026, and to recognise initial revenue from its shipbuilding segment in the second quarter.

Leong Seng Keat, CEO of Nam Cheong, said the company expects revenue expansion from fleet additions and shipbuilding revenue, whilst maintaining capital discipline amidst offshore demand conditions.

(US$1 = RM3.98)