SINGAPORE (March 1): Yangzijiang Shipbuilding, the China-based shipbuilder, reported a more than 14-fold surge in 4Q earnings to RMB608 million from a year ago, bringing FY16 earnings to RMB1.8 billion ($368 million).
Revenue for the 4Q ended Dec rose 76% to RMB5.5 billion while FY16 revenue dipped 6% to RMB15.1 billion.
In FY16, revenue from shipbuilding business declined by 14% to RMB10.5 billion. This was due to the relatively smaller size and the lower contract value of the vessels delivered, despite the total number of vessel delivery increasing to 39 from 36 a year ago.
Revenue contribution from trading business increased as a result of higher trading volume. Revenue generated by other shipbuilding related businesses such as shipping logistics and chartering, ship design services and ship demolishing was RMB270 million in FY16, down from RMB429 million in FY15.
Under investment segment, interest income derived from held to maturity (HTM) financial assets decreased from RMB1.2 billion in FY15 to RMB 1.0 billion in FY16 on lower interest rate received as group diverted an increasing amount of investment to government-related projects.
Other income increased from RMB271 million in FY15 to RMB904 million in FY16, mainly due to the recognition of RMB660 million advances payment from the previous shipowners of terminated shipbuilding contracts.
The other losses of RMB789 million recognised in FY16 were mainly due to additional impairment provision made on its fleet of vessels owned and operated by its shipping business.
As at end of 2016, the group had a cash and cash equivalent balance of RMB7.1 billion while total borrowing decrease to RMB7.2 billion from RMB8.3 billion.
As at Dec 31, the group had an outstanding order book of US$4.3 billion, comprising 85 vessels.
In its outlook, Executive Chairman, Ren Yuanlin says: “While uncertainties will likely remain for the shipbuilding industry in 2017 and there is no clear sign of a sustained recovery, we are still confident that Yangzijiang will be one of the strongest shipbuilding entities in the world throughout the market cycles.”
Shares of Yangzijiang closed 2 cents lower at 92 cents.
