Nam Cheong (1MZ) Q1 2023 earnings summary

Executive summary

• Q1 revenue rose 19% YoY to RM64.4m on higher vessel utilisation; net profit fell 74% to RM3.1m, mainly as prior-year debt-waiver and asset-disposal gains did not recur.

• A debt restructuring master agreement was signed with financial institution creditors on 20 April 2023; restructuring of remaining liabilities is ongoing.

Financial highlights

• Revenue increased from RM53.9m to RM64.4m; gross profit rose to RM26.0m from RM11.8m, with gross margin up to 40.4% from 21.8%.

• Operating profit fell 44% to RM10.0m; profit before tax declined 64% to RM4.5m and profit for the period fell 74% to RM3.1m. PATMI was RM2.4m, down 79%.

• Other income fell to RM0.4m from RM19.1m, as Q1 2022 included RM15.5m of debt-waiver gains and RM3.1m from property, plant and equipment disposal.

• Selling and administrative expenses rose 18% to RM8.5m; other operating expenses increased 35% to RM7.9m and finance costs rose 9% to RM6.6m.

• Total comprehensive loss was RM0.3m, including RM3.4m of foreign currency translation losses, versus RM14.0m comprehensive income in Q1 2022.

Outlook and guidance

• Market outlook was described as supportive of business recovery, with management prioritising completion of debt restructuring; material progress was to be updated to SGXNET.

• No dividend was declared while restructuring arrangements are addressed and financial strength is enhanced.