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Yangzijiang posts 1% fall in Q3 profit, to cut investments in non-shipbuilding businesses
YANGZIJIANG Shipbuilding reported on Friday that its net profit for the third quarter ended Sept 30, 2014, slipped one per cent to 811.19 million yuan (S$171.96 million) due to lower gross profit, other income and other gains.
Earnings per share was 21.17 fen, compared to 21.42 fen. Revenue, however, rose 2 per cent to 3.74 billion yuan. Shipbuilding-related segment remained its core revenue driver, contributing about 88.4 per cent to revenue.
The group's shipyards successfully delivered eight vessels in the third quarter. Its outstanding shipbuilding order book stood at 114 vessels, with a total value of US$4.6 billion.
Cash and cash equivalents increased to 4.06 billion yuan from 2.64 billion yuan due to the net cash provided by operating activities of 1.86 billion yuan.
The Chinese yard said it expects policy framework to change the landscape of the shipbuilding industry in China. According to China Association of The National Shipbuilding Industry, new ship prices remain subdued as the shipbuilding market is still facing challenging conditions.
"An array of policies has been introduced to tackle the overcapacity in the industry and promote the restructuring and upgrading; also, as weak players are shaken out in the market downturn, government has introduced increasingly strict barriers to entry. With our strong financial strength and overall capabilities, we are well-positioned to take advantage of the consolidation process,'' Yangzijiang said.
Yangzijiang will gradually reduce its investments in non-shipbuilding businesses and in line with that strategy, it will cut investments in property businesses.
"The group will continue to take actions at appropriate times to gradually shift the focus back to its core shipbuilding businesses,'' it said.