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Nam Cheong Sells Four AHTS Vessels, Sees Record Sales Volume

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Malaysia's Nam Cheong – the country's largest offshore support vessel shipbuilder – said Monday that it has sold four Anchor Handling Towing Supply (AHTS) vessels worth a total of around $45 million, bringing the total number of vessels sold this year to 18, an all-time record high for the company.

Three of the vessels have been sold to two repeat customers. One of the three vessels, sold to a customer based in Norway, will be deployed to Brazil under a long-term charter contract with Brazil's Petrobras. Another repeat customer - a Singapore-based company that provides ship management and chartering services - purchased the other two vessels.

The fourth vessel has been sold a new customer based in Indonesia - a marine operator with an expanding fleet of offshore support vessels - and is expected to be deployed in Indonesia.

The four vessels are scheduled for delivery in 2013.

The contract wins were announced in tandem with the company's third quarter earnings statement released Monday.

Nam Cheong posted a third-quarter net profit of $10 million (MYR31.5 million) Monday, a 33 percent drop from a year ago. The company's revenue was down 44 percent to $46 million (MYR 142 million) from the third quarter last year.

The loss in revenue, Nam Cheong said in an earnings statement, was "mainly due to the timing of the percentage of revenue recognition on vessels sold."

The company noted in the outlook section of its earnings report that with the current level of oil prices, offshore exploration and production (E&P) for new sources of oil remain attractive and that overall prospects for the industry is positive.

"The Group believes that oil majors will continue to invest in equipment and vessels essential for these E&P activities, both in Malaysia and the region. The recent discovery of significant quantities of oil off the coast of the Pahang state by Malaysia's national oil company Petronas is expected to further boost industry momentum," the company added in its statement.

Nam Cheong is referring to the offshore Bertam oil field located in Block PM 307. The country's Prime Minister Najib Razak said Nov. 1 that Petronas Carigali; the oil and gas exploration unit of Petronas and Lundin Petroleum had jointly discovered additional oil reserves under a production sharing contract in the field. Crude oil production at the oilfield is scheduled to start in 3Q 2014 with a projected output of between 17,500 and 20,000 barrels per day.

"We continue to see expanded capital expenditure by Petronas and demand for new businesses relating to top side maintenance, hook up and commissioning of existing oil platforms within the Malay basin in the shallow water region," Nam Cheong's Executive Director Leong Seng Keat said.

"This, coupled with strong activities in the deep water region, will put us in good stead," Leong added. 

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