Net profit of 1 billion yuan! Yangtze River Shipbuilding is making great progress

Sales revenue doubled year-on-year to 8 billion yuan, net profit reached nearly 1 billion yuan, a significant increase of 38% year-on-year, new orders for 22 vessels with a total value of nearly US$1 billion, delivery of 20 vessels, a sharp increase of 16 vessels year-on-year. Yangzijiang Shipbuilding's second-quarter performance was strong and positive, achieving continuous progress.

On August 7, Yangzijiang Shipbuilding Group released its financial performance for the second quarter of 2018. The financial report data shows that in the second quarter of this year, Yangzijiang Shipbuilding Group's revenue reached 8 billion yuan, an increase of 110% compared to the same period last year, and its net profit reached 9.95 billion yuan, a year-on-year increase of 38%. From January to July this year, Yangzijiang Shipbuilding Group received a total of 22 new ship orders, with a total contract value of US$9.82 billion.

Thanks to the delivery of large vessels, Yangzijiang Shipbuilding Group's shipbuilding revenue in the second quarter of this year increased significantly compared to the same period last year. In the second quarter, the number of new vessels delivered by Yangzijiang Shipbuilding Group increased from 4 in the same period last year to 20. Due to increased transaction volume, revenue from trading activities also increased. Revenue from other shipbuilding-related businesses, including shipping logistics & chartering, ship design services, and ship dismantling, also increased from 69 million yuan in the same period last year to 133 million yuan. This is mainly due to increased charter revenue and the charter revenue from four vessels owned by a 60% subsidiary (shares acquired in the second quarter of 2018).

In the second quarter of 2018, Yangzijiang Shipbuilding Group's core shipbuilding business had a gross profit margin of 21%, slightly higher than 20% in the same period last year, because some large vessels delivered this quarter had higher profit margins.

In the second quarter, Yangzijiang Shipbuilding Group The net profit attributable to shareholders was 994.9 million yuan, while the figure for the same period last year was 719.9 million yuan. The fully diluted earnings per share were 25.08 cents, compared to 18.79 cents in the same period last year.

Yangzijiang Shipbuilding Group's financial position further strengthened in the first half of 2018. The total asset-liability ratio decreased from 18.4% on December 31, 2017 to 13.7% on June 30, 2018, The Group maintained a net cash position. As of June 30, 2018, the net asset value per share increased from 6.52 yuan on December 31, 2017 to 6.72 yuan.

Yangzijiang Shipbuilding Group stated in its financial report that the global shipbuilding market continued to recover in 2018, thanks to the increase in global seaborne trade volume and the increase in daily charter rates in some major vessel segments.

As of August 7, this year, Yangzijiang Shipbuilding Group has received a total of 22 new ship orders, with a total value of US$982 million. These include 10 82,000-dwt bulk carriers, 2 180,000-dwt bulk carriers, 2 208,000-dwt cargo holds, 2 2,400TEU container ships, 5 12,690TEU container ships, and 1 83,500-dwt combination carrier.

Currently, Yangzijiang Shipbuilding Group has an order backlog of 114 vessels, 4.04 million CGT, and US$4.1 billion, ranking first in China and fourth in the world. This order backlog will ensure that Yangzijiang Shipbuilding Group's shipyards maintain a healthy utilization rate until 2020 and provide a stable source of income for at least 2.5 years.

Ren Yuanlin, chairman of Yangzijiang Shipbuilding Group, pointed out: "We have made very good progress in the second quarter, delivering two 400,000-dwt bulk carriers and eight large container ships, demonstrating Yangzijiang Shipbuilding's strong production capacity, high efficiency, and ship quality. Due to the continued favorable market conditions, the Group has received some high-quality new ship orders, keeping the order backlog at a healthy level. Most of these new ship orders are for large bulk carriers and container ships, areas where Yangzijiang Shipbuilding has a good delivery record and has reaped significant returns from economies of scale. New ship orders have also promoted the upgrading of the product portfolio."

"To achieve sustainable growth, we will continue to upgrade our product portfolio, especially by improving the technology and efficiency of large container ships and bulk carriers. We have made good progress in the research and development and innovation of clean energy vessels, and have gradually established the capacity to build LNG and LPG-related vessels. With the increase in steel costs, we have adopted methods to improve steel utilization, as well as large-scale cost reduction measures. Despite headwinds in the market, these factors still contribute to our healthy gross profit margin. As a world-class shipbuilding group, we are committed to building the ships of the future and creating value for long-term value investors."