China CSSC Holdings is expecting to snap a two-year losing streak with a large one-off profit boost saving its stock from suspension on the Shanghai Stock Exchange.
Preliminary figures from the flagship unit of China State Shipbuilding Corp (CSSC) - one of the two largest Chinese state shipbuilding conglomerates - showed its net profit would range between CNY 435m ($64.2m) and CNY 525m in 2018.
CSSC Holdings posted a net loss of CNY 2.3bn in 2017 and CNY 2.6bn in 2016.
Based on Chinese exchange rules, a share is automatically suspended from trading following three consecutive years in the red and delisted after four years of losses.
CSSC Holdings has been plagued by limited newbuilding orders during an industry downturn.
But its 2018 results were boosted by one-off profits totalling CNY 836m, according to exchange filings.
The one-off items were based on a stake sale in a subsidiary to a CSSC affiliate, compensation for land reserves, and government subsidies, CSSC Holdings said.
“In addition, our revenues in 2018 rose marginally from 2017 as the shipbuilding market started to bottom up. And we made some exchange gains due to the appreciation of US dollars against the Chinese yuan,” the company said.
“We also managed to reduce interests payments after some debt-to-equity swaps at two of our subsidiaries.”
CSSC Holdings plans to issue the full, audited results for 2018 on 20 February.
The company owns some of the largest shipyards in China, including Shanghai Waigaoqiao Shipbuilding and Chengxi Shipyard.
