Nam Cheong (1MZ) Q1 2024 earnings summary

Executive summary

• Q1 revenue rose 73% YoY to RM111.5m, driven by higher charter rates and utilisation of larger vessels.

• Net profit reached RM557.3m, largely reflecting a RM391.6m debt-waiver gain after restructuring.

• Restructuring cut total liabilities 49% to RM722.4m and borrowings 53% to RM492.2m; equity turned positive at RM254.2m.

Financial highlights

• Gross profit rose 91% to RM49.7m; gross margin improved to 44.5% from 40.4%.

• Operating profit was RM542.0m and profit before tax RM568.1m, including RM391.6m in debt waivers and RM84.1m from reversal of inventory write-downs.

• Net profit was RM557.3m versus RM3.1m; owners’ profit was RM555.3m and basic EPS 380.34 Malaysia sen versus 2.97 sen.

• Finance costs fell 70% to RM2.0m; selling and administrative expenses rose 30% to RM11.0m and other operating expenses rose to RM12.7m, mainly due to restructuring costs.

• Net cash from operations was RM3.9m versus RM15.7m; quarter-end cash and cash equivalents were RM42.7m, down from RM53.4m at 2023 year-end.

Outlook and guidance

• Sustained oil and gas CAPEX and improving OSV charter rates support a favourable long-term outlook; the completed restructuring is expected to support recovery and industry growth participation.

• No material change from the previously disclosed prospect statement.