Nam Cheong (1MZ) Q1 2026 earnings summary

Executive summary

• Q1 2026 net profit was RM81.4m vs RM35.2m; adjusted core profit from chartering and vessel sales was RM81.7m vs RM31.1m, with reported earnings including a RM59.3m vessel-disposal gain.

• Revenue rose 1% YoY to RM117.9m; vessel utilisation improved to 58% from 48%, and PATMI increased 160% to RM78.9m.

Financial highlights

• Gross profit was RM49.6m; gross margin narrowed to 42.0% from 48.3%, mainly due to higher operating costs for a Middle East-deployed vessel.

• Operating profit rose 95.8% to RM92.3m and profit before tax was RM86.8m vs RM43.4m; other income was RM60.5m vs RM4.3m, mainly reflecting the disposal gain.

• PATMI was RM78.9m vs RM30.4m; core PATMI was RM79.2m vs RM26.3m, including the vessel-disposal gain and excluding non-core other income, other operating expenses and JV/associate results.

• Selling and administrative expenses rose 50.9% to RM17.7m, mainly on higher staff costs; finance costs fell 21.7% to RM4.1m from RM5.2m.

• Net cash from operating activities was RM18.4m vs RM43.3m; net cash from investing activities was RM53.2m vs RM27.2m used.

Outlook and guidance

• No material change from the previously issued prospect statement.

• Expected debt obligations over the next 12 months to be met through cash balances, receivable collections and operating cash flow, barring unforeseen circumstances.

• Vessel utilisation is expected to rise in 2Q2026 after the monsoon season.

• Five new vessels are scheduled to join the fleet during the remainder of 2026; initial shipbuilding revenue is expected in 2Q2026.

• PETRONAS targets domestic oil and gas production of ~2m barrels of oil equivalent per day through 2028, supported by investment in exploration, deepwater development and enhanced oil recovery.