This article was originally published on Friday, 1 March 2019 at 7:57 A.M. SGT; it has since been updated with more details.
Yangzijiang Shipbuilding reported on Friday its fourth quarter net profit rose 47 percent on-year to 1.07 billion yuan, despite lower revenue, amid lower expenses and the reversal of an impairment loss. The results beat some analysts’ forecasts.
The shipbuilder posted a 210.73 million yuan reversal of an impairment loss in the fourth quarter, compared with a year-earlier impairment loss of 235.94 million yuan. It also reported an other gain of 343.75 million yuan for the period, compared with a year-earlier other loss of 400.84 million yuan.
Revenue for the quarter ended 31 December fell 22 percent on-year to 4.94 billion yuan, it said in a filing to SGX very early on Friday.
That was despite delivering 11 vessels in the quarter, up from six in the fourth quarter of 2017, as shipbuilding revenue fell, mainly on constructing fewer larger size containerships during the period.
“The global shipbuilding market continued to recover in the early part of 2018, although the momentum tapered off later due to ongoing trade tensions between U.S. and China and the forthcoming IMO 2020 global sulphur cap,” Yangzijiang said in its outlook.
“In view of the group’s robust financial position, stringent risk management, strong delivery track record and reputation as a leading shipbuilder in the world, Yangzijiang commands a favorable position in a recovering market,” it added.
For the full year, Yangzijiang reported net profit increased 17 percent on-year to 3.62 billion yuan on revenue of 23.24 billion yuan, up 21 percent on higher shipbuilding and trading revenue.
That beat forecast from some analysts. Daiwa had forecast net profit of 2.92 billion yuan on revenue of 22.51 billion yuan, while CGS-CIMB had estimated net profit would come in at 3.03 billion yuan on revenue of 21.95 billion yuan.
In 2018, 46 vessels were delivered, compared with 33 in 2017, with revenue from the shipbuilding business rising 14 percent on-year, Yangzijiang said, adding the trading business also saw higher volume, boosting the segment’s revenue.
Other shipbuilding-related businesses, such as shipping logistics and chartering and design services, saw revenue rise to 581 million yuan for the year, from 393 million yuan in 2017, mainly on a higher charter rate and on the acquisition of domestic shipping company Shanghai Huayuan Shipping during the year.
It proposed a dividend of 5 Singapore cents a share, up from 4.5 Singapore cents a year earlier.
During the year, the company obtained new orders for 36 vessels with a total contract value of US$1.5 billion; it has an outstanding order book of US$3.9 billion for 113 vessels, it said.