Gross profit declined 3% y-o-y to RM141.3 million, and gross profit margin increased 4 percentage points (ppts) to 51%, largely driven by lower vessel maintenance expenditures.
The group says that the decline in revenue was mainly driven by lower vessel utilisation rates as the fleet underwent preparations for the commencement of the secured long-term charters in 2HFY2025.
Other income decreased to RM6.3 million, mainly due to the absence of waiver of debt, while selling and administration expenses increased 14% y-o-y to RM26.8 million mainly due to an increase in staff cost.
Other operating expenses decreased to RM1.4 million due to the absence of the restructuring cost during the period, while finance costs normalised at RM9.8 million following the conclusion of the debt restructuring in 1Q2024.
Nam Cheong says that the local OSV market continues to face structural supply constraints. While the existing fleet is aging, 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 2HFY2025.
Shares in Nam Cheong closed 1.5 cents lower or 2.19% down at 67 cents on Aug 14.
