866 million! Yangtze River Shipbuilding's third-quarter profit surged

2017-11-13 09:00

Yangzijiang Shipbuilding's third-quarter performance surged, with profits reaching a staggering 866 million yuan, a threefold increase year-on-year. They also exceeded their annual target, securing orders for 59 vessels, with a total order value more than double that of the previous year. While most global shipbuilders are only just recovering, Yangzijiang Shipbuilding is accelerating its pursuit to become the world's most profitable shipyard.

On November 9, Yangzijiang Shipbuilding Group released its 2017 third-quarter financial results. The group's net profit reached 866 million yuan, more than three times the 281.2 million yuan recorded in the same period last year. To date, Yangzijiang Shipbuilding Group has received orders for 59 new vessels, with a total value of approximately US\$1.6 billion, exceeding the total order value of US\$823 million for the whole of last year.

Financial reports show that in the third quarter of this year, Yangzijiang Shipbuilding Group's total revenue reached US\$4.4 billion, a 13% year-on-year increase. The group delivered 9 new vessels in the third quarter, compared to 8 in the same period last year. Revenue from shipbuilding increased by 4%, from 2.7 billion yuan in the same period last year to 2.8 billion yuan. The gross profit margin for shipbuilding in the third quarter was 15%, lower than 24% in the same period last year, mainly due to the appreciation of the RMB against the US dollar and the increase in raw material prices since the beginning of 2017. Revenue from shipbuilding-related businesses declined slightly as Yangzijiang Shipbuilding Group recently sold all its shares in the ship dismantling business.

In July 2017, Yangzijiang Shipbuilding Group had 14 new vessel orders come into effect, including 6 82,000-dwt bulk carriers, 3 180,000-dwt bulk carriers, 4 45,000-dwt bulk carriers, and 1 29,800-dwt Great Lakes self-unloading bulk carrier. The total value of these construction contracts was US\$381 million.

In addition, since the release of the second-quarter performance report on August 7, 2017, Yangzijiang Shipbuilding Group has received 26 new vessel orders, including 13 82,000-dwt bulk carriers, 1 180,000-dwt bulk carrier, 2 45,000-dwt bulk carriers, 2 1668TEU container ships, 5 208,000-dwt bulk carriers, and 3 2200TEU container ships, with a total value of US\$754 million. Year-to-date, Yangzijiang Shipbuilding Group's order intake has reached 59 vessels, valued at US\$1.59 billion, almost double the contract value for the whole of last year.

As of September 30, Yangzijiang Shipbuilding Group had a backlog of 103 vessels, valued at US\$4.3 billion and 4.15 million CGT, ranking first in China and fourth globally. This includes 41 container ships (2.11 million CGT, US\$2.13 billion), 57 bulk carriers (1.84 million CGT, US\$1.91 billion), 3 tankers (70,000 CGT, US\$100 million), and 2 VLGCs (130,000 CGT, US\$150 million).

Yangzijiang Shipbuilding Group Chairman Ren Yuanlin stated: "The shipbuilding market continues to recover, especially in the bulk carrier sector. Yangzijiang Shipbuilding Group has already exceeded its 2017 order target, and will continue to expand its order backlog. The strong order backlog provides Yangzijiang Shipbuilding Group with excellent resilience, enabling it to remain profitable throughout market cycles.

“While uncertainties remain in the shipbuilding market, several factors support long-term shipbuilding demand, such as seaborne trade remaining a major component of international trade, the growth of e-commerce, China's Belt and Road Initiative, and the International Maritime Organization's (IMO) regulations on ship emissions.

“Through improvements in ship design and operational efficiency, Yangzijiang Shipbuilding Group will continue to strive for excellence. With our financial strength, established operational structure, strong reputation, and extensive customer network, we aim to build Yangzijiang Shipbuilding Group into a powerful and outstanding shipbuilding entity.”

Liwei invites you to join us at the 2017 China International Maritime Exhibition

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