Yangzijiang Shipbuilding secures US$198m in new orders

YANGZIJIANG Shipbuilding (YZJ) announced Thursday that it has entered into an agreement with a Japanese shipowner for the building and delivery of 10 3,500 twenty-foot equivalent unit (TEU) container ships.

Of the 10 vessels, five are firm orders, worth approximately US$198 million in total, the China-based shipbuilding group said in an exchange filing during the mid-day break. The other five are option orders for identical vessels. Should all the options be exercised, this batch of orders will be worth US$396 million in total.

YZJ said it has secured new orders for 34 vessels, worth about US$1.03 billion in the year to date. The amount does not consider the value of option orders.

"Our year-to-date new order wins of over US$1 billion is more than that for the whole year 2019," said Ren Letian, executive chairman and chief executive officer of YZJ.

He added that this was a remarkable achievement for the group, considering that global new shipbuilding orders had declined by about half for the first nine months of 2020.

"We appreciate our customers' trust in us, and I believe their trust is solidly backed by the quality of our vessels and Yangzijiang's credibility," Mr Ren said. "This gives me great confidence in building up our order book further despite a weak market."

In its Q3 earnings announcement on Wednesday evening, YZJ said that it had an outstanding order book of US$2.4 billion for 67 vessels as at Sept 30, 2020 which will provide the group with a stable revenue stream for at least the next 1.5 years.

YZJ shares traded at 95 Singapore cents per share as at 4.14pm on Thursday, up one Singapore cent from the previous close.