China-based Yangzijiang Shipbuilding more than doubled its second-quarter profit to 338.2 million yuan (S$69.4 million) from 145.9 million yuan, as revenue tripled to 1.77 billion yuan from 507.3 million yuan.
The group had a strong order book of US$7.4 b at June 30, of which US$809m was secured in H1 2008
First-half profit rose to 709.4 million yuan from 329.4 million yuan, while revenue soared to 3.47 billion yuan from 1.42 billion yuan a year earlier. In line with the jump in profit, Q2 earnings per share doubled to 10.25 yuan cents from 5.28 yuan cents.
Q2 revenue increased due to higher productivity and contributions from Jiangsu New Yangzi Shipbuilding, which was acquired in April, the company said. Six vessels were delivered during the quarter, compared with five in the preceding quarter. At end-Q2, 19 vessels were under construction at Yangzijiang's yards.
Costs, mainly steel and other materials, imported equipment, labour and outsourcing, increased 9.7 per cent to 1.47 billion yuan in Q2 from 1.34 billion previously. Gross profit margin was under pressure from higher steel prices and the weaker US dollar against the Chinese yuan. But the latter was mitigated by hedging, so margins rose 148 million yuan to 304 million yuan from 156 million yuan previously.
Yangzijiang saw other gains almost quadruple in Q2 to 67.5 million yuan from 17.9 million yuan, mainly due to the management of currency risks. Customer downpayments in US dollars were converted into yuan immediately on receipt.
The group had a strong order book of US$7.4 billion at June 30, of which US$809 million was secured in H1 2008. Due to its policy of requiring an upfront payment of at least 20 per cent plus a banker's guarantee for a further 20 per cent before effecting orders, it does not expect any cancellations.
'To offset the effects of rising costs on profit margins, we continue to focus on improving production efficiency, thereby reducing production costs and allowing additional unscheduled construction. As such, the group remains optimistic of its prospects and performance,' Yangzijiang said.
Yangzijiang's stock closed two cents lower at 63 cents yesterday.
The group had a strong order book of US$7.4 b at June 30, of which US$809m was secured in H1 2008
First-half profit rose to 709.4 million yuan from 329.4 million yuan, while revenue soared to 3.47 billion yuan from 1.42 billion yuan a year earlier. In line with the jump in profit, Q2 earnings per share doubled to 10.25 yuan cents from 5.28 yuan cents.
Q2 revenue increased due to higher productivity and contributions from Jiangsu New Yangzi Shipbuilding, which was acquired in April, the company said. Six vessels were delivered during the quarter, compared with five in the preceding quarter. At end-Q2, 19 vessels were under construction at Yangzijiang's yards.
Costs, mainly steel and other materials, imported equipment, labour and outsourcing, increased 9.7 per cent to 1.47 billion yuan in Q2 from 1.34 billion previously. Gross profit margin was under pressure from higher steel prices and the weaker US dollar against the Chinese yuan. But the latter was mitigated by hedging, so margins rose 148 million yuan to 304 million yuan from 156 million yuan previously.
Yangzijiang saw other gains almost quadruple in Q2 to 67.5 million yuan from 17.9 million yuan, mainly due to the management of currency risks. Customer downpayments in US dollars were converted into yuan immediately on receipt.
The group had a strong order book of US$7.4 billion at June 30, of which US$809 million was secured in H1 2008. Due to its policy of requiring an upfront payment of at least 20 per cent plus a banker's guarantee for a further 20 per cent before effecting orders, it does not expect any cancellations.
'To offset the effects of rising costs on profit margins, we continue to focus on improving production efficiency, thereby reducing production costs and allowing additional unscheduled construction. As such, the group remains optimistic of its prospects and performance,' Yangzijiang said.
Yangzijiang's stock closed two cents lower at 63 cents yesterday.