Malaysia-based offshore vessels builder Nam Cheong reported higher profits in the third quarter due to strong margins from shipbuilding and vessel chartering businesses.

Singapore-listed Nam Cheong posted a third quarter net profit of MYR58.69m ($18.33m), a jump of 86% compared to MYR31.55m in the same period of last year.

Revenue during the quarter surged 140% year-on-year to MYR341.23m due mainly to the progressive recognition of revenue derived from the sales of platform supply vessels (PSVs).

“Through the deployment of sound business strategies, our orderbook is worth approximately MYR1.7bn and sales for the year now stands at 20 vessels, bringing us closer to beating last year's record of 21 vessels,” said Leong Seng Keat, group ceo of Nam Cheong.

“Our build-to-stock series of vessels continue to adequately cater to our customers' requirements within shorter delivery lead times and this is testament to our good market foresight,” he continued.

The company believes it will continue to see demand for anchor handling tug supply (AHTS) vessels and other offshore vessels, especially in the shallow water region. The demand for small size AHTS vessels remains strong as offshore service providers replace older vessels with new and higher specification vessels.

For Malaysia, in line with Petronas' intended spending increase in the country's oil and gas sector, offshore support vessel owners are looking to expand their fleet on the back of higher rates and improved utilisation, according to Maybank Kim Eng Research.