Nam Cheong (1MZ) Q2 2023 earnings summary

Executive summary

• 1H2023 revenue rose 22% YoY to RM200.520m and gross profit increased 67% to RM78.258m as charter rates and vessel utilisation improved; net profit was broadly unchanged at RM31.699m.

• Near-term conditions remained uncertain as debt restructuring progressed, despite supportive offshore and marine recovery trends.

Financial highlights

• Revenue increased to RM200.520m from RM165.036m; gross profit rose to RM78.258m from RM46.808m.

• Operating profit rose 15% to RM53.839m and profit before tax increased 14% to RM41.443m; net profit was RM31.699m versus RM31.573m, while PATMI was RM31.230m versus RM31.425m.

• Other income fell to RM1.092m from RM20.182m, reflecting the absence of prior-year debt-waiver and asset-disposal gains.

• Other comprehensive loss widened to RM26.398m from RM7.365m, largely due to foreign currency translation; total comprehensive income fell to RM5.301m from RM24.208m.

• Operating cash flow was RM33.414m; investing cash outflow was RM48.478m, mainly for property, plant and equipment acquisitions.

Outlook and guidance

• Near-term outlook remained uncertain, with no material change from the previously issued prospect statement; debt restructuring continued.

• Offshore and marine recovery and expected growth in offshore oil and gas capital expenditure were described as supportive of business recovery.