SINGAPORE (THE BUSINESS TIMES) - Yangzijiang Shipbuilding's net profit rose 54 per cent to 2.06 billion yuan (S$443 million) for the six months ended Dec 31, 2021, up from the 1.34 billion yuan it posted during the same period a year earlier.
Revenue for the same period increased 55 per cent to 10.17 billion yuan, up from 6.58 billion yuan the year before.
The rise in revenue comes on the back of a rise in core shipbuilding revenue as the group shipped 27 vessels in the second half of the year, up from 17 vessels the previous year. Core shipbuilding revenue rose 80 per cent to 8.42 billion yuan.
Still, the group noted that its gross profit margin of 11 per cent in the second half of 2021 was lower than the 26 per cent it registered a year earlier due to progressive construction of shipbuilding contracts that were entered in previous years with lower contract prices. Rising raw material costs and appreciation of the yuan against the United States dollar also hurt margins.
Meanwhile, the group's revenue from its shipping segment increased by 184 million yuan to 551 million yuan in the same period on improved charter rates and an expanded shipping fleet size to 26 vessels. The improved charter rates also boosted gross profit margin to 42 per cent, up from 29 per cent a year ago.
The group's board proposed a final dividend of five cents per share, up from 4.5 cents per share declared a year earlier. The proposed dividend will be subject to shareholders' approval at the upcoming annual general meeting.
For the full year ended Dec 31, 2021, Yangzijiang's revenue climbed 13 per cent to 16.77 billion yuan. Net profit rose 47 per cent to 3.7 billion yuan, while earnings per share stood at 0.9579 yuan per share, up from 0.6439 yuan per share the previous year.
In the coming year, the group said it is confident of generating strong cash flows after it secured record orders for 124 vessels with a total contract value of US$7.41 billion (S$10 billion) last year. The company has an outstanding order book of US$8.5 billion as at Dec 31, 2021.
It also noted that the International Maritime Organisation has adopted new mandatory measures to cut the carbon intensity of international shipping, which could spur replacement orders as demand for green energy vessels rises.
Furthermore, the group noted that it has obtained pre-clearance from the Singapore Exchange to spin off its investment arm for listing on the exchange's mainboard.
It noted that the spin-off would allow the group to focus on its core shipbuilding business and could lead to a revaluation of the company as it can then be directly compared with its South Korean and Japanese peers.
Yangzijiang executive chairman and chief executive Ren Letian said that the shipbuilding arm, led by a dedicated management team, will "further strengthen corporate governance and allow the group to focus on building its competitive strengths in shipbuilding following the spin-off", as well as accelerate the group's positioning on environmental, social and corporate governance.
"We also hope to detach Yangzijiang Shipbuilding from any conglomerate discount, given that both entities will become singularly focused businesses," he added.
The company's shares rose three cents or 2.2 per cent to close at $1.40 on Friday, before the results were released.
