Yangzijiang’s net profit jumps 39% YoY to RMB1.64b in H1 2021

This is despite a 20% decline in revenues in H1 2021. 

Yangzijiang Shipbuilding (Holdings) Ltd. posted a 39% year-on-year (YoY) increase in net profit attributable to shareholders in the first half (H1) of 2021 to RMB1.64b, from S$1.2b in the same period last year, despite a decline in revenues.

The group's revenue fell 20% YoY to RMB6.6b in H1, noting that its core shipbuilding segment generated RMB4.78b in the first six months with only 23 vessels delivered, from RMB5.92b in the same period last year when it delivered 28 vessels.

Trading revenue also crashed to RMB321.9m H1 from RMB1.56b in the same period last year due to lower trading volume, whilst revenue from other shipbuilding businesses consisting of shipping logistics and chartering and ship design services was rose to RMB596.3m from RMB325.1m in the same period last year because of an expanded charter fleet size and charter rates.

Meanwhile, Yangzijiang reported other gains at RMB351.7m in H1, a 153% from RMB139.2 in the same period last year due to a higher fair value gain foreign exchange related gains and higher subsidy income. Its disposal of one unit of 82,000 deadweight tonnage bulk carriers by its shipping arm brought a gain of RMB25.4m during the period.

It also reported a net reversal of impairment loss on financial assets of RMB166.2m during the period compared to a provision of impairment loss of RMB334.3 m in the same period last year. It said that there was a net release of impairment provision following the repayment of debt investment at amortised costs during H1 2021.

Yangzijiang’s debt investment at amortised costs remained at a similar level in the first half at RMB16.6b from RMB17b by the end of 2020. Net interest income from the investment segment declined to RMB857m in the first half from RMB1.04b in the same period last year due to a lower average interest rate from new investments.

Its gross profit declined by 15% YoY to RMB1.69b due to lower revenues but was partially offset by a higher gross margin at 26% compared to 24% in the same period last year.

The group remains confident to “further capture market share within the clean energy sector as more shipowners look to purchase similar vessels to ensure functionality and relevance of their new-built vessels.”

“In 2021, there were significant breakthroughs for the group as we secured our first batch of 40,000 CBM LPG vessels and liquified natural gas (LNG) dual-fuel 7,000 twenty-foot equivalent unit containerships, both of which are unprecedented in the group’s shipbuilding history. This represents the group’s commitment towards environmental sustainability and we look to further solidify our competitive advantages in the LNG market and play our part against climate change,” Yangzijiang Executive Chairman and CEO Ren Letian said.

Yangzijiang currently has an order book of US$8.65b for 167 vessels, following a record-high order wins for 112 vessels at US$6.67b.