Profit at Japan’s Kawasaki Heavy Industries (KHI) suffered a blow from its shipbuilding businesses at home and in China, though improvements in other divisions allowed it to boost its bottom-line result.
The Tokyo-listed manufacturing conglomerate said that its China joint venture contributed to ¥15.1bn ($132m) of quarterly losses associated with unconsolidated subsidiaries, reversing ¥1.4bn in income from the line item a year earlier.
Of the figure for the fiscal third quarter,
“[The] shipbuilding joint ventures in China recorded provision for losses on construction contracts due to rising steel prices and appreciation of the yuan and other factors," wrote the company in its announcement.
The company has two shipyard ventures in China with partner China Cosco Shipping: Nantong Cosco KHI Ship Engineering (Nacks) and Dalian Cosco KHI Ship Engineering (Dacks).
Separately, KHI’s energy solutions and marine engineering division reported operating profit of ¥3.1bn in the fiscal third quarter, down from ¥5.6bn in the same quarter of the prior fiscal year.
The company blamed the drop on cost deterioration at the division’s Ship and Offshore Structure arm, which controls the company’s domestic shipyards at Kobe and Sakaide.
Energy solutions and marine engineering received ¥253bn in orders during the period, up from ¥187bn in the third quarter of fiscal 2020. But the division logged ¥202bn in net sales last quarter, down from ¥216bn.
KHI still profitable
Despite the shipbuilding losses, the Japanese builder of motorcycles, engines, heavy equipment and ships still improved its overall results.
KHI reported a bottom-line loss of ¥7.2bn, reversing a ¥13.9bn loss in the fiscal third quarter of last year. The fiscal year ends on 31 March.
