Yangzijiang gets new orders for 29 vessels worth US$1.3 billion

YANGZIJIANG Shipbuilding on Monday announced that it had recently secured agreements to build and deliver 29 vessels with a total contract value of US$1.3 billion. This includes orders from the group's joint venture arm, Yangzi-Mitsui Shipbuilding Co (YAMIC).

Of the 29 vessels, 22 are containerships worth a total of US$1.13 billion, and are expected to be delivered progressively from the third quarter next year. (see amendment note)

A first-time customer, Shanghai Zhonggu Logistics Co - the largest domestic shipping liner in China - had placed orders for 10 4,600 TEU containerships. The remaining containership orders comprise four 24,000 TEU containerships, and eight 1,800 TEU containerships.

The orders for the two 31,800 deadweight tonnage (DWT) great lake bulk carriers were placed by a returning customer, and are accompanied by two option orders for identical vessels, said Yangzijiang in a bourse filing.

Additionally, YAMIC's orders include four 66,000 DWT bulk carriers and one 82,300 DWT bulk carrier, which will be built and delivered by YAMIC.

With the latest order win, the group has secured new orders for 29 vessels worth US$1.3 billion since the beginning of the year, excluding the quantity and value of option orders.

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The new orders come shortly after the company announced last December that it has entered into an agreement with Hong Kong container shipping firm SITC International Holdings Co to build and deliver six 2,600 TEU containerships worth US$162 million.

Ren Letian, executive chairman and chief executive of the group, said: "I am heartened by the sizable orders placed by combination of new and repeat customers, as we begin to see a recovery in market sentiments and demand.

"These new orders mark a strong start for Yangzijiang at the beginning of the new year, and we hope that the strong order momentum continues throughout the year. Our current order book is expected to keep our yard facilities busy and at healthy utilisation rates with revenue visibility for at least two years."

Shares of Yangzijiang closed at S$0.975 on Monday prior to the announcement, up S$0.005 or 0.52 per cent.

Amendment note: An earlier version of this article incorrectly stated that orders for the 22 containerships are worth US$1.3 billion. It is in fact US$1.13 billion.