Yangzijiang reports 1Q19 net profit rose 38 percent amid higher vessel deliveries

Yangzijiang Shipbuilding reported Monday its first quarter net profit increased 38 percent on-year to 824.05 million yuan (S$166.68 million) amid higher deliveries of vessels in the shipbuilding segment.

Revenue for the quarter ended 31 March rose 27 percent on-year to 6.29 billion yuan on growth in the shipbuilding and trading segments, the company said in a filing to SGX late Monday.

In the shipbuilding segment, 15 vessels were delivered in the quarter, up from nine in the year-ago period, pushing core shipbuilding revenue up 17 percent on-year to 3.4 billion yuan, Yangzijiang said.

The trading business posted revenue of 2.2 billion yuan in the quarter, up from 1.6 billion yuan in the year-ago period, the filing said.

In the other shipbuilding businesses, such as shipping logistics, chartering and ship design services, revenue for the first quarter was 122 million yuan, up from 88 million yuan in the year-ago period, on charter income from the vessels owned by a subsidiary Yangzijiang acquired in 2018, the filing said.

Expenses surged 240 percent on-year in the quarter to 156.75 million yuan

Yangzijiang said it has received three new orders year-to-date with a contract value of US$116 million, for an outstanding order book at US$3.5 billion as of 29 April.

“These orders will keep the group’s yard facilities at a healthy utilization rate up to 2021 and provide a stable revenue stream for at least the next two years,” the shipbuilder said.

The company said it was focusing on constructing LNG-related vessels under a joint venture with Mitsui E&S Shipbuilding and Mitsui & Co. It added that the demand for clean energy and related vessels was expected to remain strong.

“As a resilient entity that consistently outperformed in unstable market conditions, our next step is to elevate our product portfolio to include more high-tech, green vessels especially in the LNG carrier space, catering to the evolving, long-term demand in the market,” Ren Yuanlin, executive chairman of Yangzijiang, said in the statement.

But the company noted in its outlook that risks from the global economic outlook and trade war tensions could weigh on new shipbuilding order placement.


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