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Yangzijiang posts 208% surge in Q3 earnings

Singapore

HIGHER turnover helped boost earnings at Yangzijiang Shipbuilding (Holdings) by more than three times in the third quarter.

The Chinese shipbuilder on Thursday reported a net profit of 866 million yuan (S$177 million) for the three months ended Sept 30 - a whopping 208 per cent up on the 281.2 million yuan in the same period a year ago.

Revenue rose 13 per cent to 4.38 billion yuan. Nine vessels were delivered during the quarter, compared with eight previously, said Yangzijiang in a bourse filing.

Net profit for the nine months to Sept 30 surged 97 per cent to 2.25 billion yuan, while revenue jumped 34 per cent to 12.85 billion yuan.

During the quarter, gross profit margin for the shipbuilding business was 15 per cent, down from 24 per cent previously, mainly due to the appreciation of the Chinese yuan against the US dollar since the start of the year as well as the increase in raw material prices.

But the group recorded a higher gross profit of 10.5 million yuan for other shipbuilding related business, reversing a gross loss of four million yuan, thanks to improved charter rates of its shipping logistics and chartering business. Earnings per share for the quarter came in at 22.33 fen, compared with just 7.34 fen previously. Net asset value per share was 634.73 fen as at Sept 30, up on the 592.2 fen as at Dec 31 last year.

Yangzijiang has secured new orders of 59 vessels with a total value of US$1.6 billion to date this year, compared to US$823 million in the whole of 2016. This brings its order book to US$4.3 billion for 103 vessels as at Sept 30, putting it as No 1 in China and No 4 in the world, the group said.

Executive chairman Ren Yuanlin noted that the shipbuilding market has continued to recover, especially in the dry bulk carrier segment. "We have achieved our new order-taking target for 2017 ahead of schedule, and ... the strong outstanding order book has given Yangzijiang the resilience to consistently deliver profit throughout market cycles," he added.

Yangzijiang shares closed 0.6 per cent or one Singapore cent lower at S$1.565 yesterday, before the results were out.