Yangzijiang Shipbuilding has reported a 17% year-on-year decline in third-quarter net profit to CNY 585m ($88m) on the back of impairments and foreign exchange losses.
China’s largest privately-owned shipbuilder said revenue was CNY 3.58bn, down 34% on the corresponding period last year, due to lower trading volume.
Since late August, Yangzijiang has secured shipbuilding orders for five bulkers and a single chemical tanker worth a total of $139m.
Year to date, it has secured 29 newbuilding contracts worth $834m, taking its total order backlog to 67 vessels worth about $2.4bn.
Yangzijiang's shipbuilding business registered a gross profit margin of 27% for the third quarter, mainly due to the construction and delivery of several large size containerships, which carry a higher profit margin.
Yangzijiang said the uncertainties in the shipping market amid the Covid-19 pandemic have further hampered the order recovery for major vessel types during the third quarter.
But executive chairman and chief executive Ren Letian said the shipbuilder had noticed “some encouraging signs of recovery” in the shipping market in the past few months.
Encouraging signs of recovery
“Demand for containerships on major routes has been strong while the rationalised shipping supply struggled to cope with it,” he said.
“Container charter rates rebounded strongly, and we are glad to see that major shipping companies posted above-expectation financial results.”
In late September, TradeWinds reported that Yangzijiang was looking to enter the VLCC segment by acquiring a half-built newbuilding from a compatriot shipyard.
Industry sources said it was with Jinhai Intelligent Manufacturing, formerly Jinhai Heavy Industry, to buy the 300,000-dwt tanker that has been standing in the yard for more than two years.
Yangzijiang’s interest in acquiring Jinhai’s half-complete newbuilding mirrors a move it made three years ago when it entered the suezmax tanker sector.
It paid about $10m to take over the half-built, 157,000-dwt newbuilding that was dry-docked at Jiangsu Rongsheng Heavy Industries.
Germany’s Hammonia Reederei was reported to have paid a price “in the high $50s” for it and has named it Aura M (built 2020).
