China Shipyard, Yangzijiang, Report Profit Dip in Q4 2013

Reuters –  Yangzijiang Shipbuilding Holding Ltd said its fourth-quarter net profit dropped 8 percent on the year, as income from shipbuilding decreased.

Privately-controlled Yangzijiang is China's third-largest listed shipbuilder by market capitalisation. It reported a fourth-quarter net profit of 746.3 million yuan ($121.85 million), and a full-year net profit of 3.1 billion yuan, slightly higher than Thomson Reuters SmartEstimate of 3.0 billion yuan.

The pre-tax margin for the year stood at 34.5 percent, up from 32.9 percent a year earlier, dwarfing an industry median of 10 percent, according to Thomson Reuters data.

The company's shipbuilding business posted a 43 percent gross margin, due to high-margin contracts secured before the global financial crisis. Shipbuilding prices have since slid, and the company had warned investors that profit margins could be squeezed as construction of ships on lower-margin orders took over the yard's docks.

Yangzijiang's outstanding order book stood at $4.6 billion at the end of February, most of which were orders for bulk carriers.

The company has recently signed a contract to build two semi-submersible drilling rigs for $825 million with an option for two similar rigs, the second offshore engineering equipment order it has won since the jackup rig order in 2012.

Yangzijiang has started building up its bulk-carrier fleet, on expectations of an improving shipping market. ($1 = 6.1248 Chinese yuan)

Source: Reuters