Nam Cheong Limited reported its results for the three months ended December 31, 2013.
The Group achieved a record revenue of RM406.1 million, which was 7% higher than the RM379.2 million received in the corresponding period last year. In line with its topline performance, the Group achieved another record-breaking net profit of RM70.2 million for 4Q 2013.
Datuk Tiong Su Kouk, Executive Chairman of Nam Cheong, said, “Our build-to-stock business model, which we have fine-tuned over the years, has culminated in yet another successful quarter. Amid favourable industry prospects, this has allowed us to break our net profit record for the second successive quarter, contributing strongly to our full-year results. Having hit new highs in FY2013, we look to do better next year as we seek to grow our market position and capitalise on further opportunities.”
The Group’s stronger topline performance for 4Q 2013 was attributable to its two business segments of shipbuilding and vessel chartering. Revenue for the shipbuilding segment grew 4% to RM385.1 million for 4Q 2013 from RM370.3 million for 4Q 2012 on the back of an increase in number of vessels delivered over the quarter. In line with the expansion of the chartering fleet in FY 2013, revenue from the vessel chartering segment grew by 148% to RM21.0 million for 4Q 2013 from RM8.5 million for 4Q 2012.
The Group’s gross profit grew in tandem with revenue gains as it marked a 8% increase from RM74.0 million for 4Q 2012 to RM79.7 million for 4Q 2013. Over the period, gross profit margin was 20%, in line with the Group’s ideal range of between 19% and 20%. The shipbuilding segment recorded a gross profit margin gain of two percentage points from 19% in 4Q 2012 to 21% in 4Q 2013. Gross profit margin for the vessel chartering segment came in lower at 1% however, as a result of the higher cost of operation arising from the chartering-in of a vessel to fulfil a newly secured time charter contract due to unavailability of a committed similar vessel owned by the Group.
Other income of RM5.0 million earned by the Group in 4Q 2013 was over 100% higher than the RM1.0 million received in 4Q 2012. This was due to the reversal of share option expenses and write back of allowance on trade and other receivables, which are no longer required, amounting to RM1.4 million and RM2.6 million respectively.
With increased topline performance, the Group’s net profit after tax gained 42% from RM49.3 million in 4Q 2012 to RM70.2 million in 4Q 2013. Mr. Leong Seng Keat, Nam Cheong’s Group Chief Executive Officer said, “Our order book today remains very healthy at RM1.5 billion and this bears further testament to the strength of our business model which continues to yield results for us. Having achieved record order wins in 2013, we expect the sales momentum to continue this year as we tap into a resurgent market.”
For the full year ended December 31, 2013, revenue grew by 43% year-on-year to approximately RM1.3 billion from RM876.6 million in the previous corresponding period.
With consistent topline gains made in four successive quarters, the Group’s shipbuilding and vessel chartering segments recorded revenue gains of 42% and 73% respectively. The shipbuilding segment contributed to 95% of the Group’s FY2013 revenue while the vessel chartering segment accounted for the remaining 5%.
As a result, FY2013 net profit registered a strong double-digit growth of 51% to RM206.2 million from RM136.6 million in FY2012. This marks another year of record earnings for the Group.
The Group continued to maintain a healthy balance sheet in FY2013 with total assets growing by RM873.4 million. Total liabilities increased by a comparably lower RM527.0 million for FY2013. Net gearing ratio as at December 31, 2013 was 0.52 times, marking an increase from 0.38 times as at December 31, 2012.
Nam Cheong, February 26, 2014