Malaysia: Nam Cheong Announces Sale of Four AHTS Vessels

Nam Cheong Limited, SGX Main Board-listed leading global offshore marine player and Malaysia’s largest Offshore Support Vessel (“OSV”) builder, today announced that it has sold four Anchor Handling Towing Supply (“AHTS”) vessels worth a total of US$45.13 million, bringing the total number of vessels sold this year to 18, an all-time record high for annual vessel sales in the Group’s corporate history.

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 Petrobas, Brazil’s national oil corporation. Another repeat customer, a Singapore-based company that provides ship management and chartering services, purchased the other two vessels.

The remaining vessel has been sold to a new customer based in Indonesia, a marine operator with an expanding fleet of OSVs, and is expected to be deployed in Indonesia.

Mr Leong Seng Keat, Nam Cheong’s Executive Director, said: “With the sale of these four AHTS vessels, this year has seen the most number of vessels sold in a single year, setting a new record for our Group’s corporate history. We are also pleased that customers return to us for repeat purchases. This is as much a testament to the quality of our vessels as it is a demonstration of our customers’ confidence in us to deliver what they need on time. At the same time, we continue to expand our customer base with new regional clients.”

In March and August, the Norwegian-based customer, which owns, operates and manages vessels, had awarded contracts to Nam Cheong for three other AHTS vessels.

He added: “We have also seen the robust industry momentum sweeping the South American region, which has generated new business opportunities benefiting our Petrobas-linked customer and us. So far, we have secured four orders from the same customer as a result of our customer’s successful tenders with Petrobras, and the fact that we have the right build-to-stock vessels ready, available and capable of meeting the short deployment lead time required by the customer.”

State-run Petrobras ranks first among national oil companies globally in terms of oil and gas capital expenditure planned for the next five years as Brazil’s need for offshore vessels continues to expand and could double between now and the end of the decade.

All four 5,150 brake horsepower (“bhp”) vessels are being constructed as part of the Group’s build-to-stock series in one of Nam Cheong’s subcontracted yards in China. Each vessel is ABS class, about 59 metres long and has a bollard pull of 62 to 65 tonnes. They are all equipped with Dynamic Positioning System 1, and are scheduled for delivery between the first and fourth quarters of 2013.

This latest slew of contract wins brings Nam Cheong’s order book to RM1.3 billion to date, and is expected to contribute positively to the Group’s earnings for the financial years ending 2012 and 2013.

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Nam Cheong, November 12, 2012