Chinese shipbuilder Yangzijiang Shipbuilding (Holdings) reported net profit for the three months to 30 September dipped by one per cent to RMB811.19 million (S$171.90 million), due to lower gross profit, other income and other gains, though this was partly offset by a lower tax expense.
Revenue rose 2 per cent to RMB3.74 billion in the quarter, with shipbuilding remaining its core revenue driver, contributing about 88.4 per cent to group revenue.
The group's shipyards successfully delivered eight vessels in the third quarter. Its outstanding shipbuilding order book stood at 114 vessels, with a total value of US$4.6 billion. Cash and cash equivalents increased to RMB4.06 billion from RMB2.64 billion due to the net cash provided by operating activities of RMB1.86 billion.
Yangzijiang said it will reduce its investments in non-shipbuilding businesses such as property development, a strategy it employed to deal with adverse market conditions and reduce volatility in earnings. It said these investments had effectively brought in revenue, but had caused concerns over the group's risk profile.
In line with that strategy, the Group disposed its equity stakes in Taizhou Hengjian Real Estate Co., Ltd., Changzhou Green Field Quint Real Estate Co., Ltd., and Shanghai Jiaxuan Hotel Management Co., Ltd. After the disposals, the Group only has a few property development projects left in its principal places of business at Jingjiang and Jiangyin.
Looking forward, the company said it was "well-positioned to take advantage of the consolidation process" in China's shipbuilding industry as weak players are shaken out in the market downturn, because of its "strong financial strength and overall capabilities."
Said executive chairman Ren Yuanlin said: "The industry has shown early signs of recovery as enquiries and new orders have started to see some momentum when compared to last year. The softer oil prices are in a way benefiting the recovery of the shipping industry. We feel that over time this will have a positive trickle-down effect on shipbuilders.
"Current outstanding orders will keep our yards fully utilized till end of 2016."