Nam Cheong (1MZ) Q2 2024 earnings summary

Executive summary

• 1H2024 revenue rose 56% YoY to RM312.0m; net profit reached RM635.8m, materially boosted by debt waivers and other restructuring-related income.

• The 2024 Scheme and Debt Restructuring Master Agreement became effective on 30 March 2024, reducing borrowings and liabilities and restoring positive equity of RM386.3m.

Financial highlights

• Revenue was RM312.0m, up 56% YoY; gross profit increased 87% to RM146.0m.

• Operating profit was RM648.9m versus RM53.8m in 1H2023; other income was RM540.5m versus RM1.1m.

• Other income included RM390.6m of debt-waiver gains and RM74.6m of inventory write-down reversals; net profit was RM635.8m versus RM31.7m.

• Profit attributable to owners was RM626.6m versus RM31.2m; share of associate profits was RM29.7m, mainly from an associate realizing an asset.

• Finance costs fell 32% to RM9.3m after restructuring; selling and administrative expenses rose 32% to RM23.4m, while other operating expenses increased 82% to RM14.2m, mainly due to higher restructuring expense.

Outlook and guidance

• Offshore activity and tight OSV supply are expected to support higher daily charter rates in 2025.

• Focus remains on benefiting from Malaysia’s expanding offshore O&G market and pursuing long-term growth, supported by Petronas upstream spending and development agreements for 12 offshore fields.