Yangzijiang Shipbuilding reported Monday its third quarter gross profit fell 20.8 percent on-year to 1 billion yuan as the gross margin dropped by 13 percentage points to 22.4 percent as the shipbuilder was faced with rising raw materials costs.
Revenue for the July-to-September quarter increased 25 percent on-year to a record 4.47 billion yuan, Yangzijiang said in a filing to SGX.
In the core shipbuilding segment, gross profit fell 30 percent on-year to 486.15 million yuan as the gross profit margin declined 14 percentage points to 13 percent, Yangzijiang said.
Revenue for the segment increased 45 percent on-year to 3.69 billion yuan, mainly on higher shipbuilding activity in the quarter, the shipbuilder said. Fifteen vessels were delivered in the quarter, up from nine in the year-ago period, and the revenue from two medium-range oil tankers was recognised during the period, the filing said.
Lower trading activity pushed revenue from the trading segment down to 99.4 million yuan, from 312.03 million yuan in the year-ago period, the filing said. The gross profit from the segment was at 1.4 million yuan, down from 4.07 million yuan in the year-earlier period, in line with the typically low gross profit margin of around 1 percent, the filing said.
The shipping and others segment, which includes other shipbuilding-related business, such as logistics, chartering and ship design, posted a 32 percent on-year increase in revenue for the quarter to 255.18 million yuan as gross profit grew 73 percent on-year to 110.02 million yuan on a 10 percentage point increase in the gross profit margin to 43 percent.
In its outlook, Yangzijiang pointed to data from Clarksons showing the number of new orders for containerships in the January-to-September period reached its highest since 1996, with the company the top-ranked shipyard, securing around 16 percent of total orders for the nine-month period.
So far this year, the shipbuilder has secured orders for 124 vessels valued at US$7.41 billion, its record high, for an outstanding order book of US$8.86 billion for 165 vessels, the filing said.
As for power restrictions in China, Yangzijiang said the impact on its shipyards has been “kept under control,” and restrictions have eased, with shipyards back to normal operations.
“Yangzijiang’s major shipyards are currently operating at full utilization rates and there are no changes to the group’s scheduled delivery of
vessels in 2H2021,” the company said.