Published November 12, 2008

Yangzijiang more than doubles Q3 profit to 475m yuan

By VINCENT WEE
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(SINGAPORE) Yangzijiang Shipbuilding (Holdings) has more than doubled its net profit to 475.3 million yuan (S$103.9 million), from 224.7 million yuan previously, for the quarter ended Sept 30, 2008.

Similarly, sales more than doubled to 2.02 billion yuan, and the company declared an interim dividend of one cent per share.

On a nine-month basis, turnover went up from 2.3 billion yuan to 5.5 billion yuan while earnings rose from 554.1 million yuan to 1.18 billion yuan.

Third-quarter gross profit rose from 235 million yuan to 466 million yuan and gross profit margin rose to 23 per cent from Q2's 17 per cent as Yangzijiang built more high-margin big vessels.

Almost a third (695.6 million yuan) of Q3 sales came from the bigger 4,250 20-foot equivalent unit (TEU) containerships compared with none a year earlier.

Cost of sales rose to 1.6 billion yuan from 648.7 million yuan previously, in line with the higher volume of shipbuilding activities. However, administrative expenses fell by a third from 62.4 million yuan to 41.9 million yuan, as the group contained its overheads.

Cash and cash equivalents dropped to 2.7 billion yuan, from 3.5 billion yuan in the year-ago period. This was due to some 465 million yuan spent on acquiring Jiangsu New Yangzi Shipbuilding Co, an outflow of about 2.8 billion yuan for investing in treasury products and 289 million yuan spent on the repurchase of shares from the open market.

Yangzijiang won contracts to build six vessels worth some US$81 million in the quarter, thus taking its order book to US$7.3 billion as at Sept 30. The builder said that there have been no order cancellations to date.

Of the 27 scheduled deliveries this year, 18 have been made in the first nine months of the year and a further three in October. The group expects to meet the delivery deadlines for the remaining vessels.

Its shares closed two cents higher at 45.5 cents yesterday.