Thursday 28 Mar 2024
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SINGAPORE (April 30): Lower shipbuilding margins and interest income sent Yangzijiang Shipbuilding's earnings down 12% y-o-y to RMB706.9 million ($152.9 million) in 1Q2015.

Revenue fell 14% to RMB3.04 billion.

A drop in interest income from its held-to-maturity investments, which the company has been scaling down, as well as lower contributions from its shipbuilding-related trading business, offset a pickup in shipbuilding revenue.

Yangzijiang delivered 10 vessels during the quarter, up from seven in the same period last year. Gross margins for its shipbuilding business slipped to 21% from 24%.

New orders flows were strong in early 2014 but tapered off for the rest of the year as demand fell, an outcome that spilled over into 2015, according to the shipbuilder.

Globally, a total of 211 new vessels comprising 16.6 million dead-weight tonnes were ordered in 1Q2015, down 43% y-o-y, it said.

Yangzijiang's order book stands at US$4.6 billion ($6.1 billion), comprising 114 vessels, which will keep its yards busy till end-2016.

China's shipbuilding industry still faces overcapacity, with utilization down to 60% this year from 75% in 2010, the company noted.

"We will continue monitoring the market, study the M&A opportunities that are presented to the group from time to time," it said in a statement today.

"However, our prime goal is to enhance shareholder value and the competiveness of the group in the long run, and the group will only consider M&A opportunities that offer favourable return and are accretive to our core shipbuilding business."

Yangzijiang shares ended 1% lower at $1.445 yesterday.

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