China CSSC Holdings has confirmed its return to profitability in 2018 after two years in the red, escaping from shares suspension on the Shanghai Stock Exchange.
The Shanghai-listed flagship unit of state-owned China State Shipbuilding Corp (CSSC) reported net profits of CNY 489m ($73m) in 2018, compared with net loss of CNY 2.3bn in 2017 and CNY 2.6bn in 2016. This is in line with its earlier forecast.
Revenues increased to CNY 16.9bn in 2018 from CNY 16.7bn in 2017.
Based on Chinese exchange rules, a company would see the normal 10% daily trading limits of its share reduce to 5% after two years of losses.
The share would be automatically suspended from trading following three consecutive annual losses years and delisted after four years in the red.
In its annual report, CSSC Holdings confirmed the company would apply for the resumption of normal trading after returning to profitability last year.
“The shipbuilding market was bottoming up in 2018. Our revenues were slightly up from the 2017 level, having fallen for several years,” the company said.
Without one-off gains from a stake sale in a subsidiary to a CSSC affiliate, compensation for land reserves, and government subsidies, CSSC Holdings would have posted net losses of CNY 345m, though.
“Global economy is slowing and so is the recovery in shipping markets. The newbuilding market is still adjusting from a deep bottom, and the difficulties in financing, making profits and winning orders remain,” the company said.
“The shipbuilding is still facing adverse market conditions.”
For 2019, the company is aiming for revenues of CNY 17.3bn while completing the construction of 36 ships totalling 5.86 million dwt.
