Nam Cheong (1MZ) Q3 2024 earnings summary

Executive summary

• 9M2024 net profit reached RM686.7m versus RM94.4m in 9M2023, driven substantially by restructuring-related debt-waiver income; Q3 net profit fell 19% YoY to RM50.9m.

• Chartering growth and stronger gross profit supported operating performance; shipbuilding recorded no revenue because no vessel was scheduled for delivery.

• A young, diversified fleet and stronger regional offshore demand were cited as supports for continued recovery and growth.

Financial highlights

• 9M2024 revenue rose 46% YoY to RM512.4m and gross profit increased 109% to RM261.5m; operating profit was RM732.1m and profit before tax RM744.2m.

• 9M2024 other income reached RM512.2m, including RM393.4m from debt waivers, RM31.5m from vessel and property disposals, and RM72.5m from reversal of inventory write-downs.

• Q3 revenue rose 34% YoY to RM200.4m; gross profit was RM115.4m versus RM46.6m, and operating profit was RM83.2m, up 8%.

• Q3 net profit was RM50.9m, down 19% YoY, as other income fell to RM3.0m from RM46.9m; profit attributable to owners was RM47.1m, down 21%.

Outlook and guidance

• No material change from the previous prospect statement; management intends to leverage favourable offshore-market conditions while remaining agile amid macroeconomic uncertainty.

• Planned Southeast Asian offshore gas final investment decisions could total US$100bn by 2028, supporting regional OSV demand.

• Petronas reported 19 Malaysian exploration discoveries in the prior year, yielding more than 1bn barrels of oil equivalent; continued E&P investment supports Malaysia's OSV outlook.