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Yangzijiang secures new orders worth US$578m

The Business Times by TAN HWEE HWEE


YANGZIJIANG Shipbuilding has secured nine new shipbuilding orders in May worth US$578 million.

The shipbuilder said after Monday's trading close that the nine vessels include two 82,000 deadweight tonne dry bulkers, two 208,000 deadweight tonne dry bulkers and five 12,000 TEU (20-foot-equivalent unit) containerships.

These contracts lift the shipbuilding group's new orders for the five months from January to May to US$846 million. In addition, YZJ delivered a total of 18 vessels in April and May. As at Monday, the group has an outstanding order book of US$4.1 billion for 115 vessels, which will keep its shipbuilding facilities highly utilised until 2020.

YZJ's executive chairman Ren Yuanlin said: "With steady recovery of oil prices and BDI (Baltic Dry Index) stabilising, sentiment on the shipbuilding market and enquiry level remain healthy. We made good progress in both new order wins and vessel delivery in May.

"The uncertainties in raw material prices and exchange rate present challenges for the shipbuilding industry (but) our strong financial position provides ... the flexibility to manage the cost of production and order book quality. This will further enhance our competitiveness and market share as other shipyards struggle to cope with the complicated market dynamics."

YZJ, an STI constituent stock, closed at S$1.01 on Monday, down two cents. On May 30, the shipbuilding group indicated its readiness to buy back more of its shares from the open market to bolster its share price. It indicated that it had 5.6 billion yuan (S$1.2 billion) of cash and cash equivalents on hand.