This decline in revenue is largely due to a relatively normalised utilisation rate of 70%, compared to the high base of 86% in 3QFY2024. On a q-o-q basis, revenue grew 6% y-o-y from the vessel chartering business, driven by improved vessel utilisation rates as long-term charters gradually began to contribute to earnings.
For the quarter, gross margin remained above 50% level, easing slightly by 1.4 ppts q-o-q mainly attributable to the additional operating cost related to scheduled vessel maintenance activities during the reporting period.
Other operating expenses decreased to RM10.7 million in 3QFY2025 mainly due to the absence of restructuring costs, which were partially offset by a one-off litigation settlement expense to a third-party supplier related to vessel chartering activities.
As such earnings declined 7% q-o-q. Excluding the one-off costs and income, as well as share of results from joint ventures and associates, the group’s core profit attributable to owners of the parent would have increased by 26% q-o-q to RM55.3 million.
On outlook, Nam Cheong says that the local OSV market continues to face structural supply constraints. While the existing fleet is ageing, new vessel construction remains subdued, primarily due to banks’ continued caution in extending financing for newbuild programs.
Malaysia’s cabotage policies, which limit foreign vessel participation, further restrict available supply. As a result, OSV charter rates are expected to remain well supported in 2026.
Shares in Nam Cheong closed flat at 83 cents on Nov 14.
