Yangzijiang Shipbuilding Q1 profit rises 38% to $166.7m

Revenue for Yangzijiang Shipbuilding was up 27 per cent to 6.29 billion yuan, from 4.96 billion yuan the year prior.
Revenue for Yangzijiang Shipbuilding was up 27 per cent to 6.29 billion yuan, from 4.96 billion yuan the year prior.PHOTO: YANGZIJIANG SHIPBUILDING

SINGAPORE - Yangzijiang Shipbuilding's first quarter net profit rose 38 per cent to 824.1 million yuan (S$166.7 million) for the three month ended March 31, from 595.1 million yuan a year ago.

This comes on the back of an increase in vessels delivered and higher volume of trading activities, the China-based company said on Monday night (April 29).

Earnings per share rose to 20.88 fen from 14.99 fen the year before. It did not propose a dividend, the same as the previous year. Shares of the company closed flat at $5.280 on Monday.

Net asset value per share for the group stood at 752.49 fen, up marginally from 731.91 fen a year ago.

Revenue for the group was up 27 per cent to 6.29 billion yuan, from 4.96 billion yuan the year prior. In its shipbuilding-related segment, the group delivered 15 vessels for the first quarter, compared with nine vessels delivered a year ago.

Core shipbuilding revenue rose 17 per cent to 3.42 billion yuan, from 2.93 billion yuan a year ago. The group's trading business also grew 32 per cent to 2.16 billion yuan, from 1.63 billion yuan the year before.

Meanwhile, revenue from other shipbuilding-related businesses such as logistics and chartering, and ship design services rose 39 per cent to 122.2 million yuan, from 88.1 million yuan previously. The increase was due to charter income from vessels owned by the group's wholly owned subsidiary acquired in 2018.

On outlook, the group said global new shipbuilding orders "declined substantially" for the quarter, compared with a year ago. This was due to a less-bullish outlook on economic and trade growth, lower charter rates and uncertainties associated with forthcoming International Maritime Organization's rules on emissions.

Year to date, the group secured a total of US$116 million in contract value for three vessels - a 157,000 DWT (deadweight tonne) oil tanker, a 29,800 DWT self-unloading vessel and a 82,000 DWT bulk carrier.

As at April 29, 2019, its order book stood at US$3.5 billion for 101 vessels, which it said would keep its yard facilities at a healthy utilisation rate up to 2021, and provide a stable revenue stream for at least the next two years.

The group is also building capabilities for the construction of liquefied natural gas-related (LNG) vessels at its Taicang yard, under a joint venture with Mitsui E&S Shipbuilding Co and Mitsui & Co.

"Our next step is to elevate our product portfolio to include more high-tech, green vessels especially in the LNG carrier space, catering to the evolving, long-term demand in the market," Ren Yuanlin, executive chairman, Yangzijiang Shipbuilding, said.