MAINBOARD-LISTED Yangzijiang Shipbuilding : BS6 0% on Thursday (Aug 3) posted a net profit of 1.7 billion yuan (S$324.6 million) for the first half ended Jun 30, up 47 per cent year on year (yoy) from 1.2 billion yuan.

The previous year’s net profit figure of 1.2 billion yuan came from continuing operations and does not include some 194.6 million yuan from the spinoff and listing of Yangzijiang Financial in April 2022. 

Revenue for H1 FY2023 increased by 16 per cent to 11.3 billion yuan, from 9.7 billion yuan. Its gross profit jumped 48 per cent to 2.1 billion yuan, from 1.4 billion yuan. 

The overall revenue increase was attributed to the group’s shipbuilding revenue reaching 10.7 billion yuan, up 25.1 per cent from the 8.5 billion yuan in the corresponding year-ago period, driven by heightened progressive construction activities.

It delivered 31 vessels this half-year, with six from Jiangsu Yangzi-Mitsui Shipbuilding, its joint venture with Mitsui E&S Shipbuilding and Mitsui & Co.

Yangzijiang Shipbuilding said in a separate announcement that it had acquired an additional 5 per cent in the joint venture from a minority shareholder for a cash consideration of 43.2 million yuan, increasing its shareholding to 56 per cent.

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The acquisition is not expected have a material impact on its net tangible assets and earnings per share for the current financial year, the group added.

The group’s shipbuilding business showed an increase in its gross profit margin to 18 per cent this half-year, up from 13 per cent.

The group said that this increase was mainly due to the depreciation of the yuan against the US dollar and reduced material costs incurred. 

Revenue from the shipping business slipped 5.1 per cent to 532 million yuan.

This was due to reduced charter rates over the six-month period. Its gross profit margin for shipping fell, dropping to 34 per cent from 40 per cent in H1 FY2023. 

Its other businesses, including terminal services, trading, ship design services, investment property and investments retained after the spinoff of its finance subsidiary, generated a revenue of 129.5 million yuan, tumbling 80.4 per cent from 659 million yuan due to a decrease in trading business volume. 

The group’s net profit translates to earnings per share of 43.69 fen, up from 29.76 fen, which was calculated on a continuing operations basis. 

As at Jun 30, it secured new contract wins of US$5.76 billion for 72 vessels. Notable new orders include 10 units of liquefied natural gas dual-fuel containerships and 10 units of methanol dual-fuel containerships.

As of the end of H1 FY2023, Yangzijiang Shipbuilding’s total outstanding order book amounted to US$14.7 billion for a total of 181 vessels.

It noted that its orderbook composition now has more weightage towards clean vessel types, with this segment seeing a “significant increase” as it represents 56 per cent of the total contract value, compared to the 23 per cent recorded a year ago. 

Yangzijiang’s executive chairman and chief executive Ren Letian said that the group is looking at multiple ways to improve its operational efficiency and project management, as it has 181 vessels to deliver. 

He expects the group to benefit from the sustained demand towards clean fuel vessels, following the International Maritime Organisation revising its strategy in July for the reduction of greenhouse gas (GHG) emissions from ships, including quantitative targets for the uptake of zero or net-zero GHG emission technologies.  

Shares of Yangzijiang Shipbuilding ended at S$1.55, down 1.3 per cent or S$0.02 on Thursday before the release of its financial results.