Jiangsu Rongsheng Posts Half a Billion USD Loss
Chinese shipyard group China Rongsheng Heavy Industries said that its majority-owned subsidiary Jiangsu Rongsheng Heavy Industries posted a net loss of about RMB3.36bn (USD 548.6m) for the nine months ended 30 September 2014.
Rongsheng said the net loss was primarily due to the low prices of shipbuilding orders in depressed market conditions and the diminishing profitability of the conventional shipbuilding business.
“The net loss was also due to the decline of production activities of Jiangsu Rongsheng Heavy Industries despite considerable fixed production cost and the adjustment of the contract price of certain shipbuilding contracts. Such loss may lead to adverse effects on the production and operation, financial position and repayment capacity of Jiangsu Rongsheng Heavy Industries,” the company said.
Jiangsu Rongsheng Heavy Industries has been adopting measures to improve operational performance and financial position by negotiating with principal banks in the PRC on the terms and conditions of the extension and renewal of
The shipbuilder has also been trying to obtain financial support from a shareholder of its holding company; negotiating for better payment terms and revising up prices of certain existing shipbuilding orders; redesigning operation flow and controlling costs for existing shipbuilding orders; maximizing sales efforts and obtaining the appropriate project-based financing; establishing strategic cooperation with key suppliers with a view to reduce the costs of supplies.