Yangzijiang Shipbuilding’s Earnings at All-Time High

One of China’s top shipbuilders Yangzijiang Shipbuilding (YZJ) has recorded the strongest quarterly earnings of RMB 1.24 billion based on the shipbuilder’s latest results, up 52 % year on year.

 
Despite having 9 vessels delivered in 2Q 2014 compared to 11 vessels in 2Q 2013, the shipbuilding related segment’s revenue contribution only decreased slightly by 3.2 % y-o-y to RMB 3.9 billion primarily due to the construction and delivery of the first batch of 10,000TEU containerships with higher contract prices.

Shipbuilding business accounted for about 86% of this segment’s revenue for 2Q2014 (2Q2013: 91%).

The shipbuilding related segment’s 2Q2014 revenue was also effectively supplemented by the trading business, the revenue of which accounted for approximately 12% of the segment’s revenue.

With respect to the outlook, leveraging on the upswing of the shipping industry, the group wants to focus on shipbuilding business and has deployed more resources into R&D for better and more sophisticated vessels in order to strengthen its shipbuilding capabilities.

In 1H2014, the group secured a total of 32 effective shipbuilding contracts amounting to US$1.4 billion, comprising of 3 units of 64,000DWT, 16 units of 82,000DWT, 3 units of 208,000DWT, and 4 units of 260,00DWT bulk carriers, along with 2 units of 1,100TEU, and 4 units of 10,000TEU containerships.

Notably, the group secured an order for its largest ever bulk carriers, consisting of the four 260,000DWT very large ore carriers in June 2014, from its first Australian customer.

Year to date, the Group has won the most new orders among the Chinese yards and its order size ranked No. 1 in terms of Compensated Gross Tonnage (CGT) in China.

The current outstanding order book at the shipyard as of 30 June 2014 amounts to US$5.0 billion for 122 vessels and the yard capacity is expected to be highly utilized until the end of 2016.

 Mr Ren Yuanlin, Executive Chairman of Yangzijiang said,: “We are happy to deliver another good set of results for 2Q2014, and we will be striving to keep the strong growth momentum going.”

“The shipping industry continues to be on a steady recovery track and we have observed that ship owners are enhancing their focus on vessels’ operational efficiencies.

This has led to a rise in demand among the shipping industry for vessels that are more complex and larger. We aspire to maintain our leadership position and competitiveness by driving our innovation forward to better fulfill the needs of our long term customers,” he added.

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Press Release, August 6, 2014