Yangzijiang Shipbuilding H1 profit up 77% as eco-friendly ships drive record orders; shares jump
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Yangzijiang Shipbuilding posted improved revenue, thanks to a record order book of 224 vessels worth US$20.2 billion.
PHOTO: YANGZIJIANG SHIPBUILDING
Derryn Wong
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SINGAPORE - Yangzijiang Shipbuilding on Aug 12 posted a net profit of 3.1 billion yuan (S$553.7 million) for the six months ended June 30, an increase of 77.2 per cent from the year-ago period.
This comes as earnings per share for the period rose to 77.42 fen from 43.69 fen the year before.
The company said in a bourse filing that revenue grew 15.3 per cent to 13 billion yuan, and attributed this to the strong performance of its shipbuilding business, which contributed to 95 per cent of the total revenue.
Revenue from this segment rose 16 per cent to 12.4 billion yuan, driven by ship construction activities. In the six months, it delivered 37 vessels, up from 31 in the year-ago period.
Revenue from the shipping segment improved 14 per cent to 604 million yuan, thanks to better charter rates.
Gross profit increased 65.1 per cent to 3.5 billion yuan, with the gross profit margin improving 8.1 percentage points to 26.7 per cent, thanks to improved contract pricing and favourable foreign exchange rate, with the depreciation of the renminbi against the US dollar.
Cost of sales rose 4 per cent to 9.6 billion yuan, as a result of increased shipbuilding operations.
In the six months, it added a total of 79 new orders worth US$8.5 billion (S$11.3 billion), bringing its order book to a “record-high amount of US$20.2 billion for 224 vessels, providing earnings visibility up to mid-2028”.
The company reported that its focus on building eco-friendly ships has enabled it to secure a record number of orders, as the majority of these new orders were for green vessels.
Yangzijiang’s executive chairman and chief executive Ren Letian said that the group is “well-equipped to deliver cutting-edge vessels that meet the environmental criteria of our customers and the industry”.
“We are not resting on our laurels just yet, as we set our eyes on capacity expansion to match the robust demand trajectory anticipated for clean-energy vessels.”
He added that the company is planning to convert its chemical terminal on the Yangtze River into a liquified natural gas logistics terminal/hub with storage and distribution capabilities, which “provides recurring and defensive income in the long run”.
Shares of Yangzijiang Shipbuilding jumped 14.7 per cent to close at $2.73 on Aug 13, after the release of its financial results.
