Mainboard-listed Nam Cheong has reported patmi of RM78.9 ($25.5) million, a y-o-y gain of around 160% for 1QFY2026 ended March 31. The increase was mainly due to a one-off gain from a vessel sale worth RM60.5 million.
The offshore service vessel (OSV) provider earned nearly RM118 million in revenue from core operations, a y-o-y increase of 1.1%. Due to higher operating costs for a vessel deployed in the Middle East, gross profit declined by 12% y-o-y to RM49.6 million, with gross margin dropping to 42% from the prior 48%. The vessel was chartered to the region prior to escalation of geopolitical tensions.
In the results filing on May 15, the company says that despite a smaller fleet size, revenue increased slightly due to improved vessel utilisation as more long-term charter contracts commenced and began contributing to earnings. Vessel utilisation rose to 58% in 1Q2026 from 48% in 1Q2025, reflecting a higher mix of vessels operating under long-term charters, says the firm.
Cash and cash equivalents rose to almost RM251 million as at March 31 from nearly RM203 million at the end of FY2025, mainly due to the collection from customers during the period. During the quarter, borrowings declined by around RM20.3 million to RM405 million with financing costs decreasing by 21.7% y-o-y to RM4.1 million.
Overall, net gearing ratio fell q-o-q from 0.27 times to 0.17 times as of March 31 and is expected to decrease further following accelerated debt repayment in 2QFY2026.
Against the backdrop of elevated energy security concerns and an aging global OSV fleet, Nam Cheong says it remains well-positioned to meet robust offshore demand moving forward, supported by its young and technologically advanced fleet. Fleet utilisation is expected to rise in 2QFY2026 post monsoon season with five new vessels scheduled to make their debut and contribute to revenue for the rest of 2026.
See also: Thai Beverage's 1HFY2026 earnings lower on impairment
Nam Cheong CEO Leong Seng Keat says: “With five new vessels scheduled to join our fleet for the remainder of 2026, we expect our revenue base to be further enhanced. At the same time, we remain on track to recognise the first revenue streams from our shipbuilding segment during 2QFY2026. Moving forward, we remain focused on balancing fleet growth with capital discipline as offshore demand stays firm in the era of heightening of energy security.”
Shares in Nam Cheong closed at $1.41 on May 15, down two cents or 1.4%.
