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YZJ Shipbuilding Q3 net profit down 10%

YANGZIJIANG Shipbuilding has posted a net profit of 778.6 million yuan (S$154 million) in the third quarter, down 10 per cent from the same period a year earlier.

Revenue in the three months ended Sept 30 was 5.37 billion yuan, up 23 per cent from the same period a year earlier.

The group also booked an impairment loss of 333 million yuan on financial assets, higher than the impairment loss of seven million yuan in the third quarter last year.

Earnings per share was 19.73 RMB cents, down from 22.33 RMB cents in Q3 last year.

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Net asset value per share was 692.90 RMB cents as at Sept 30, from 652.20 RMB cents as at Dec 31 last year.

Outstanding order book stood at US$4.1 billion as at Nov 7, which will keep the group's yard facilities optimally utilised up to 2020 and provide a stable revenue stream for at least 2.5 years, the group said.

It said in its results filing: "The shipbuilding market is still in the recovery phase post the recession experienced in the last few years. In the first nine months in 2018, 796 new shipbuilding orders (57.9 million DWT) were placed globally, 13.6 per cent lower in terms of number of vessels (6.6 per cent higher by DWT) compared to the new orders in the first nine months in 2017.

China, Korea and Japan received 32.2 per cent, 44.3 per cent and 11.5 per cent of the new orders respectively.

"With the growing uncertainties in global shipping volume and economic growth due to the trade tensions between US and China, the pace of new shipbuilding order placement will become less predictable. However, the trades are redistributed among countries rather than disappearing, and the demand for shipping remains intact. In addition, the outstanding orderbook to fleet ratio is still in the bottom range historically, implying fundamental catch-up in shipbuilding demand."

The shares rose 4.88 per cent or six Singapore cents to S$1.29 on Wednesday before results were released after market close.