YZJ Shipbuilding profit down 6% in Q2

YANGZIJIANG (YZJ) Shipbuilding has posted a net profit of 936 million yuan (S$183.6 million) in the second quarter, down 6 per cent from the same period a year earlier.

Revenue in the three months ended June 30 was seven billion yuan, down 12 per cent.

Core shipbuilding generated revenue of 3.1 billion yuan, down from 5.2 billion yuan in the same period a year earlier as 18 vessels were delivered instead of 20.

The shipbuilding business registered a gross profit margin of 18 per cent in the second quarter as compared to 21 per cent for the same quarter last year due to rising raw material and labour costs.

In the first half of 2019, the group secured new orders for five vessels with total contract value of US$209 million.

Outstanding order book stood at US$3.1 billion as at June 30 for 85 vessels, which will provide a stable revenue stream for the group for the next 1.5 years, YZJ Shipbuilding said on Monday.

The group said: "Global new shipbuilding orders declined substantially in the first half of 2019, by 50 per cent in DWT terms compared to the first half of 2018.

"In the second quarter, the Baltic Dry Index staged a strong rebound to a healthier level as fundamentals improved. The off-service time required to install scrubbers on the vessels to meet the IMO 2020 rule will reduce the effective available fleet size on the market, providing further support to charter rate. As ship owners rebuild their confidence, the new order drought in the first half is expected to ease."

Earnings per share was 23.73 RMB cents, down from 25.08 RMB cents in the second quarter last year.

Net asset value per share was 751.92 RMB cents as at June 30.

YZJ Shipbuilding shares fell four Singapore cents or 2.82 per cent to S$1.38 before results were announced.