SINGAPORE – Yangzijiang Shipbuilding on Thursday reported a 30 per cent fall in net profit to 1.4 billion yuan (S$275 million) for the second half ended Dec 31, 2022, from 2.1 billion yuan the previous year.
Earnings per share for the second half of the year on a continuing operations basis stood at 36.51 fen, up from 27.9 fen previously.
This comes after the spin-off and listing of Yangzijiang Financial Holding in April 2022.
The company separately announced that it was acquiring Jiangsu Jiasheng Gas for 430.1 million yuan. Jiangsu Jiasheng Gas holds a 45 per cent equity interest in Jiangsu Yangzi Jiasheng Terminal.
It expects the acquisition to diversify its revenue stream and expand its maritime value chain.
The company’s revenue for the second half increased 17 per cent year on year to 11 billion yuan from 9.4 billion yuan. This was supported by a rise in gross profit and other income, excluding interest.
Yangzijiang attributed the rise in revenue mainly to higher shipbuilding and shipping business revenues, despite a fall in revenue in other businesses such as terminal services, trading, ship design services and investments.
The company’s shipbuilding revenue increased 17.9 per cent to 9.9 billion yuan from 8.4 billion yuan. Shipping business revenue rose 49 per cent to 822 million yuan due to a bigger charter fleet and improved charter rates, the company said.
Meanwhile, the revenue from other businesses decreased to 291 million yuan, which the company mainly attributed to a lower volume of trading business activities.
Gross profit rose by 46 per cent to 1.8 billion yuan from 1.2 billion yuan, with a higher gross profit margin of 13 per cent compared with 11 per cent. This was mainly due to the depreciation of the renminbi against the United States dollar and lower material costs during the period, the company said.
Meanwhile, other income excluding interest increased by 169 per cent to 92.3 million yuan from 34.4 million yuan, which the company said was mainly driven by higher income from sales of materials. Administrative expenses fell to 169.6 million yuan from 397.3 million yuan.
Share of results of associated companies and joint ventures fell 77 per cent to 7.6 million yuan from 32.3 million yuan. This mainly consisted of profits from Yangzi-Mitsui Shipbuilding, the company said.
For the full year ended Dec 31, 2022, Yangzijiang posted a 24 per cent fall in net profit to 2.8 billion yuan from 3.7 billion yuan for financial year 2021.
Meanwhile, revenue for financial year 2022 increased 37 per cent to 20.7 billion yuan from 15.1 billion yuan, driven mainly by higher shipbuilding and shipping business revenues.
The group has proposed a final dividend of five cents per ordinary share for financial year 2022.
Following China’s reopening, the shipping industry is expected to witness a turnaround, with demand forecast to improve in 2023, the company said, although it noted that recovery in the shipping business is expected to remain uneven.
The company is focused on long-term goals such as sustainable profitability and growth, which have been supported by its increased operational efficiency and research and development efforts over the past year, executive chairman and chief executive Ren Letian said.
“Yangzijiang Shipbuilding is well positioned to progressively convert a sizeable amount of its record-high order book of US$11 billion (S$14.7 billion),” Mr Ren said.
The company expects to “generate healthy cash flow in the coming years”, allowing its shareholders to receive sustainable returns, he added.
Shares of Yangzijiang closed 1.5 per cent or two cents lower at $1.33 on Thursday.
THE BUSINESS TIMES
