Nam Cheong Sells Accommodation Work Vessel, AHTS Vessel for $58M

Nam Cheong Limited (Nam Cheong, or together with its subsidiaries, the Group), a leading global offshore marine player listed on the Mainboard of the Singapore Exchange Securities Trading Limited (the SGX) and Malaysia’s largest Offshore Support Vessel (OSV) builder, reported Wednesday that it has sold two vessels worth approximately $58 million to two repeat customers.

Leong Seng Keat, Nam Cheong’s CEO said, “We are delighted to kick-off 2015 with the securing of two new contracts. With these contracts, it brings our cumulative order book to a robust $458 million (MYR 1.7 billion), pointing to the credibility and soundness of our reputation as a shipbuilder amidst an outlook of uncertainties in the macro environment. In particular, we are heartened to have attained the vote of confidence from our repeat customers for the continued demand for our vessels.”

A 200-men Accommodation Work Vessel (AWV) was sold to a subsidiary of a repeat customer, SGX Mainboard listed Marco Polo Marine Ltd. (MPML) for imminent delivery in the next quarter. MPML is an integrated offshore supply and marine logistic group with an established track record in the chartering of OSVs in the region. The previous purchase was made on Aug. 19, 2014 by a joint venture company co-owned by MPML and Nam Cheong for a vessel with specifications similar to the new order.

In addition, one 12,000 bhp Anchor Handling Towing Supply Vessel (AHTS) was also sold to a repeat customer based in Dubai, Topaz Energy and Marine Limited (Topaz), a leading OSV company providing marine solutions to the global energy industry. Nam Cheong last sold three Platform Supply Vessels (PSVs) to Topaz in July 2014.

Leong added, “Over the years, our strategy in setting our sights further afield the region and in extending our footprints across the world has paid off on several fronts. On one hand, we added a larger base of customers which translates to a higher stream of revenue. On the other, this strategy also buoys our business stability through the greater diversification of geographical and customer concentration risks.

“Internally, we remain committed to optimising our cost structure to weather the volatility in oil prices. With a continued glut in oil supply, we believe our proposition of being a partner to our customers by providing them with quality vessels driven by cost and fuel efficiencies is more important than ever. By doing so, it increases the bidding competitiveness of our customers for charter contracts, placing us in a mutually beneficial and virtuous cycle of landing additional contracts in the future. We believe Nam Cheong will emerge stronger once the clouds of macroeconomic uncertainties scatter.”

The two vessels are of American Bureau of Shipping (ABS) class and are being constructed as part of Nam Cheong’s built-to-stock series in the Group’s subcontracted yards in China. These vessels are scheduled for delivery in 2015 and 2016 and are expected to contribute positively to the Group’s earnings for the financial year ending Dec. 31 and Dec. 31, 2016.


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