Yangzijiang posts 6% dip in Q3 net profit

Singapore-listed shipbuilder Yangzijiang Shipbuilding Holdings said its third-quarter net profit slipped 6 per cent from a year ago to 820.7 million yuan (S$168.5 million), even as revenue rose 2 per cent to 3.7 billion yuan.

The group, one of China's largest listed shipyards, said the dip in net profit was largely the result of higher taxation.

Revenue and gross profit margins remained stable compared with last year, even though the group delivered one fewer vessel in the third quarter of this year, it said in a filing to the Singapore Exchange on Wednesday.

Yangzijiang delivered eight vessels in the three months to Sep 30, compared with nine in the same period a year ago. But five of the eight vessels delivered in the third quarter were large vessels, which contributed higher revenue.

Turnover was also boosted by an increase in other shipbuilding-related revenue, such as ship demolition, design services, and trading of ship supplies.

Since January, the group has delivered a total of 28 vessels. In the first nine months of the year, it also secured 52 effective shipbuilding contracts worth a total of US$2.1 billion (S$2.6 billion), with 28 outstanding options worth US$1.36 billion.

Yangzijiang's order book stands at US$3.87 billion, comprising 88 vessels.

"The group's performance through an industry down cycle has been very heartening so far," said Mr Ren Yuanlin, Yangzijiang's executive chairman.

"As the prolonged weak demand causes excess capacity and financial stress at shipyards, customers increasingly gravitate towards stronger players to safeguard their investment," he added.

"The flight towards strong players should be increasingly apparent with the implementation of the Chinese government's restructuring and consolidation plan, which may result in a higher market share for Yangzijiang."

The group reported earnings per share of 21.42 fen for the third quarter, down from 22.89 fen a year ago.

Net asset value per share rose to 4.45 yuan as at Sep 30, compared with 4.05 yuan as at Dec 31 last year.