Yangzijiang Shipbuilding (Holdings) reported Sunday its 2021 net profit rose 47 percent on-year to CNY3.70 billion as the hedging policy in dollar-yuan forward contracts provided a currency gain of CNY627 million.
Revenue for the 12 months ended 31 December increased 13 percent on-year to CNY16.77 billion, the Chinese shipbuilding said in a filing to SGX.
“We achieved multiple milestones in FY2021, including record contract wins and highest net profit since 2011 despite multiple headwinds including Covid-19 related disruptions, power shortages within China and a surge in raw material costs, which is a strong testament to our operational execution strength,” Ren Letian, executive chairman and CEO of Yangzijiang, said in the statement.
Investment arm spinoff
“Given that the shipbuilding arm is now well-positioned to continue delivering returns and to achieve further breakthroughs within the clean energy vessel space, it is timely for the group to propose a spin-off of our investment arm through a separate listing on the SGX Mainboard,” he said.
The spinoff will expand further into fund and wealth management by acquiring a fund management company with a capital markets services license in Singapore, the filing said.
“The spin-off group will no longer be restricted to a limited number of asset classes or type and will see diversification into fast-growing sectors and new asset classes including private debt, mezzanine financing and REITs, and will expand its geographical outreach in the Greater China and Southeast Asia region,” Ren Yuanlin, honorary chairman of the company, said in the statement.
Yangzijiang will also distribute the shares of the spin-off group to all existing shareholders once approvals are obtained, the filing said.
The company posted a reversal of impairment loss of CNY136.45 million for 2021, compared with a year-earlier impairment loss of CNY598.75 million.
The net profit margin rose 5 percentage point rise to 22 percent for the year, the filing said.
Yangzijiang proposed a final dividend of 5 Singapore cents a share, compared with a 4.5 Singapore cent a share dividend a year earlier.
In its outlook, the shipbuilder said it has record order wins of 124 vessels with a total contract value of US$7.41 billion, and an outstanding order book of US$8.5 billion as of end-December.
“The group remains well-positioned to generate strong cash flows from operations as the group fulfils orders placed and will seek to achieve operational excellence in our production lines to improve production efficiency. Containerships make up 83 percent of our existing orderbook in terms of
total contract value, which also command higher margins given their greater value-add over dry bulkers and tankers,” the shipbuilder said.
“The group will also begin to deliver vessels that have been contracted at higher value, as opposed to orders taken in 2019 and which were mostly delivered by year 2021,” it added.