YANGZIJIANG Financial Holding reported a net profit of S$25.6 million for the second half of its financial year, down 80 per cent from S$130.7 million in H2 FY2021.

The recently spun-off financial unit of Yangzijiang Shipbuilding on Wednesday (Mar 1) posted a loss after allowances of S$17.1 million, as opposed to profit after allowances of S$111.9 million in H2 FY2021. This came as a S$135.9 million allowance for credit losses was recorded during the period under review, due to additional allowances made for non-performing debt investments and microfinance loans.

Total income for the half year declined 9 per cent year on year to S$132.4 million from S$145.7 million, mainly due to lower interest income and dividend income.

Interest income – the main income generator for the group – was down 17 per cent from the previous year, because of lower contributions from the debt investment business. Average debt investment balance declined, while non-performing loans grew over H2.

The group’s loss from non-interest income, however, narrowed to S$15.5 million from a loss of S$32.4 million in H2 FY2021, as a result of lower fair-value changes on financial assets.

The latest set of half-year results brings Yangzijiang Financial’s earnings for FY2022 to S$162 million, 50 per cent lower than its FY2021 net profit of S$327.2 million.

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Earnings per share (EPS) stood at S$0.0422, as opposed to FY2021’s EPS of S$0.0828.

Its board has declared a first and final dividend of S$0.018 a share for FY2022, representing a payout ratio of 43 per cent.

Ren Yuanlin, executive chairman of Yangzijiang Financial, said he remains cautiously optimistic of the group’s prospects for 2023 with the reopening of China’s borders, coupled with its government’s support measures for the domestic property sector.

He described 2022 as a challenging year for Yangzijiang Financial, as it focused on diversifying its portfolio across vintages, asset classes and geographies.

“The group’s performance was also hit by the adverse impact of the Covid-19 pandemic on the Chinese economy. Nonetheless, we were able to remain profitable through the year,” Ren added.

Separately, Yangzijiang Financial announced it will invest up to US$23.7 million in two medium-range tankers, through its maritime fund’s partnership with “an international leading manager”.

The eco-design vessels are scheduled for delivery in H1 of 2025. They will feature hydroelectric cargo pumps from system supplier Framo, which the group considers to be operationally more efficient than traditional electric cargo pumps.

Shares of mainboard-listed (*see amendment note) Yangzijiang Financial : BS6 0% closed Tuesday S$0.005 or 1.4 per cent lower at S$0.35. 

Amendment note: An earlier version of this story incorrectly referred to Yangzijiang Financial as a Catalist-listed company.