Nam Cheong Limited, an offshore support vessel (OSV) provider based in Sarawak, Malaysia, has reported higher earnings for 1QFY2025 ended March 31, 2025, to RM31.1 million ($9.44 million), up 20% y-o-y.
The group reported a 5% y-o-y increase in revenue for 1QFY2025 to RM116.6 million, solely from the vessel chartering business. This is despite lower vessel utilisation during the period due to the preparation of vessels for longer-term charter.
Revenue growth was due to expanded fleet and improved daily charter rates.
Gross profit rose 13% y-o-y to RM56.3 million, while gross profit margin expanded to 48%.
Other income decreased to RM4.3 million in 1QFY2025 due to absence of waiver of debt pursuant to the 2024 Scheme and the Debt Restructuring and Master Agreement (DRMA), which have become fully effective and unconditional since March 2024.
Selling and administration expenses increased, while other operating expenses decreased.
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On outlook, the group 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 such, OSV charter rates are expected to remain well supported in 2025. The group says that its modern fleet is well-positioned to meet market demand.
Shares in Nam Cheongclosed flat at 57 cents on May 14.
