Net profit in the six months ended 30 June 2016 was registered at RMB863.38m ($130.05m), a sharp plunge of 50% from RMB1.74bn in the same period of last year.
First half revenue also dipped by 35% year-on-year to RMB5.7bn due mainly to decline in contributions from shipbuilding related segment.
“Sentiments on the shipbuilding market remained weak, new orders diminished further, and global outstanding orderbook decreased to the lowest level since June 2013,” commented Ren Yuanlin, executive chairman of Yangzijiang.
The prolonged downturn in the shipbuilding market has led to widespread bankruptcies particularly among privately-owned Chinese yards which do not enjoy direct state funding.
Amid the sector’s recession, Yangzijiang managed to secure new orders for 10 vessels with a total contract value of about $600m year-to-date. The orders comprised of four 1,800-teu container vessels and six 400,000 dwt VLOCs.
As at end-June, the shipbuilder sat on an orderbook of $4.7bn comprising of 89 ships, with progressive deliveries up to 2019.
New orders side, Yangzijiang had also faced order cancellations by cash-strapped owners. During the second quarter this year, three shipbuilding orders were terminated, but the production of all these three vessels has not started yet.
During the first quarter, seven out of eight orders that were cancelled have found new buyers during the second quarter, while the remaining order has yet to start construction.
“While we were not immune from the wave of order cancellation on the market, Yangzijiang’s reputation, vessel quality and client network have enabled us to arrange for the resale of most of the vessels whose orders were terminated earlier, and minimise the impact,” Ren said.
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