Yangzijiang Shipbuilding's profit sank 17% to $152.58m in Q2

Revenue from its core shipbuilding business fell.

Yangzijiang Shipbuilding (YZJ Shipbuilding) saw its profit attributable to equity holders crash 17% YoY to $152.58m (RMB7773.92) in Q2 from $184.62m (RMB936.43m) in Q2 2019, an announcement revealed.

Likewise, revenue also dropped 32% YoY to $940.4m (RMB4.77b) from $1.39b (RMB7.03b) over the same period. Revenue from the core shipbuilding was $591.49m (RMB3b) for Q2, compared to $611.09 (RMB3.1b) in Q2 2019. Sixteen vessels were delivered in the same quarter, slightly lower compared to 18 in Q2 2019.

Revenue from other shipbuilding businesses, which consist of shipping logistics and chartering and ship design services, was slightly higher at $35.49m (RMB180m) in Q2 compared to $35.29m (RMB179m) over the same period.

Further, the group’s shipbuilding business registered a gross profit margin of 22% for Q2, higher than the 18% in Q2 2019, thanks to the resale of the 157,000DWT oil tanker. YZJ Shipbuilding’s trading business contributed a gross profit of $2.66m (RMB13.5m) in the same quarter, with a low gross profit margin of around 1%.

Other shipbuilding related businesses such as shipping logistics and chartering and ship design services registered a gross profit margin of 20% for Q2, lower than the 28% for Q2 2019, mainly due to lower charter rates. The combination of the above led to a higher gross profit margin of 27% at group level for Q2 from 17% in Q2 2019.

The Group’s debt investment at amortised costs increased from $2.84b (RMB14.4b) at the end of 2019 to $3.16b (RMB16b) as at 30 June. Interest income derived from the investment segment increased from $104.13m (RMB528m) for Q2 to $113.99m (RMB578m) for Q2, despite the lower portfolio size in the quarter.

Fully diluted earnings per share was 3.9 cents (RMB19.75 cents) for Q2. Group maintained a strong financial position with net cash as at 30 June, whilst net asset value per share rose from $1.57 (RMB7.94) as at 31 December 2019 to $1.58m (RMB8.02) as at 30 June.

Despite the deteriorated market conditions, YZJ Shipbuilding noted that their new order wins of $708.18m (US$517m) for H1 was more than double that of H1 2019. These new orders for the 15 vessels included two 14,000TEU dual-fuel containerships and two 690FEU LNG-tank carriers.

As at 30 June, the group had an outstanding order book of $3.56b (US$2.6b) for 62 vessels. “These orders will keep the group’s yard facilities at a healthy utilisation rate till early 2022 and provide a stable revenue stream for at least the next 1.5 years,” the firm stated.