Yangzijiang Shipbuilding reported Thursday its first half net profit increased 39 percent on-year to 1.64 billion yuan despite lower revenue amid a net reversal of an impairment loss, fair value gains and a lower cost of sales.
The group posted a net reversal of impairment loss on financial assets of 166 million yuan under administrative expenses, compared with a provision of impairment loss of 334 million yuan in the year-ago period.
Cost of sales fell 22 percent on-year to 4.91 billion yuan in line with lower revenue from the shipbuilding business, the company said.
Revenue for the January-to-June period fell 20 percent on-year to 6.6 billion yuan, the Chinese shipbuilder said in a filing to SGX.
Core shipbuilding posted revenue of 4.78 billion yuan in the first half, down from 5.29 billion yuan in the year-ago period as the number of vessels delivered fell to 23 from 28 in the year-ago period, Yangzijiang said.
The shipbuilding business posted a gross profit margin of 14 percent, down 2 percentage points on-year, mainly on rising raw material costs and a stronger yuan against the U.S. dollar, the company said.
Trading revenue declined to 321.9 billion yuan in the first half from 1.56 billion yuan in the year ago period on lower trading volume the filing said.
Revenue from other shipbuilding businesses, which includes shipping logistics and chartering and ship design services, rose to 596.3 million yuan from 325.1 million yuan in the year-earlier period on an expanded charter fleet size and improved charter rates, the company said.
Other gains increased 153 percent on-year to 351,67 million yuan on a higher fair value gain of 162.2 million yuan on financial assets, foreign exchange gains of 112.6 million yuan and higher subsidy income of 52.7 million yuan, Yangzijiang said.
Net interest income derived from the investment segment declined dropped to 857 million yuan from 1.04 billion yuan in the year-ago period on lower average interest rates from new investments, the filing said.
In its outlook, the shipbuilder pointed its “unparalleled” outstanding orderbook of US$8.65 billion for 167 vessels after record order wins of 112 vessels so far this year.