Malaysia’s OSV builder Nam Cheong has seen its earnings slashed in the financial year 2015 compared to 2014 due mainly to a loss recorded in the fourth quarter, as the slump in the offshore industry intensified.

Net profit for the year ended 31 December 2015 was reported at MYR28.52m ($6.76m), a plunge of 91% compared to the profit of MYR301.78m in financial year 2014.

Singapore-listed Nam Cheong also saw its 2015 revenue slashed by 51% to MYR950.03m as it only completed and delivered 11 vessels last year compared to 24 vessels in 2014.

The annual results were held back by a fourth quarter 2015 loss of MYR21.47m due mainly to the share of loss from associate of MYR22.33m because of lower vessel utilisation rate. The poor vessel utilisation stemmed from Nam Cheong’s 30% stake in PT Pelayaran Nasional Bina Buana Raya tbk (BBR), an indirect subsidiary of compatriot Marco Polo Marine.

Leong Seng Keat, ceo of Nam Cheong, maintained that the company’s build-to-stock business model will weather the storm but it has to adjust its shipbuilding programme in accordance to the weaker market demand.

Nam Cheong’s orderbook as at 31 December 2015 consisted of 17 vessels worth a total of MYR1.2bn, of which MYR630m remained unrecognised as deliveries are stretched to 2018.

For 2016, it plans to deliver nine vessels, with four already sold and in progress while five are unsold. For 2017, Leong shared that the ambition is to deliver 14 vessels including eight currently on its orderbook comprising of two 6,000 bhp AHTS vessels, one 12,000 bhp AHTS vessel, two 4,500 dwt PSVs, one accommodation work barge, and one emergency response and rescue vessel (ERRV).

Leong said that at the request of its customers and its own initiative, Nam Cheong has deferred the schedule of vessel deliveries that are currently under construction. The Malaysian firm is collaborating with five shipyards in China for its vessel construction.

“Over the shorter term, challenges of oversupply in oil will likely take some time to rebalance. In the mid to longer term however, we believe prospects for the OSV market remain encouraging,” Leong said.

He pointed out that the offshore brownfields, or the maintenance markets, are still seeing enquiries and rates in that sector have remained relatively stable.