Yangzijiang Shipbuilding to grow other units to deal with shipping cycles

SINGAPORE - Yangzijiang Shipbuilding (Holdings) has chalked up an 11.4 per cent rise in first quarter net profit to 799.2 million yuan (S$160.2 million).

Revenue for the three months to March 31 was up 24 per cent at 3.55 billion yuan.

Shipbuilding business contributed 63 per cent of total revenue during the quarter, with seven vessels delivered. This compared to the delivery of nine vessels in the same period last year.

Group revenue was effectively supplemented by the expansion of the trading business, accounting for about 34 per cent of total shipbuilding-related revenue.

Other shipbuilding related revenue such as ship demolition, design services and shipping logistics and chartering amounted to 69.7 million yuan.

Interest income derived from held-to-maturity financial assets rose to 597 million yuan from RMB373 million yuan.

Due to higher loan amount extended, investment income derived from micro financing business increased slightly, by nine million yuan to 30.5 million yuan.

Despite challenging operating environment, the group's shipbuilding business continued to register healthy gross profit margins at 24 per cent, due mainly to construction and delivery of large shipbuilding contracts with higher margin.

Apart from shipbuilding business, other ship related businesses such as ship demolishing, fabrication services, trading business generated lower margin.

This brought the overall margin down for shipbuilding related business to 16 per cent.

Earnings per share firmed to 20.86 fen from 18.72 fen previously while net asset value per share grew to 480.19 fen compared to 464.55 fen as at Dec 31.