Yangzijiang stays profitable, orderbook tops $4.1bn

China’s Yangzijiang Shipbuilding has stayed profitable amid the weak shipbuilding market, as it looks to healthy yard utilisation up to 2020 backed by an orderbook of 114 vessels valued at $4.1bn.

This year to-date, privately-owned Yangzijiang has won new orders for 28 vessels with a total contract value of $1.2bn, including two 82,000-dwt bulkers, one 83,500-dwt combination carrier and three 2,700-teu containerships.

As at 7 November 2018, the shipbuilder has an orderbook worth $4.1bn for 114 vessels, offering a stable revenue stream for at least the next 2.5 years.

“As we maintain a stable, strong outstanding orderbook, we are managing the shipbuilding facilities carefully to ensure the delivery of quality vessels on or ahead of schedule,” said Ren Yuanlin, executive chairman of Yangzijiang.

In the third quarter, Singapore-listed Yangzijiang made a profit of RMB778.63m ($112.34m), a decline compared to RMB866m in the previous corresponding period.

Revenue for the quarter came up to RMB5.37bn, an increase compared to RMB4.38bn in the same period of last year.

The shipbuilding market is still in the recovery phase post the recession experienced in the last few years.

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Yangzijiang observed that with the growing uncertainties in global shipping volume and economic growth due to the trade tensions between US and China, the pace of new shipbuilding order placement will become less predictable.

However, the trades are redistributed among countries rather than disappearing, and the demand for shipping remains intact. In the long run, seaborne trade will remain a dominant part in international trade.

The growth of e-commerce, China’s Belt and Road initiative, and IMO rules and regulations on vessel emission standards are all expected to support the shipbuilding demand for high-tech, environmentally-friendly and energy-efficient vessels.

In response, Ren highlighted that the group’s recent new shipbuilding joint venture with Mitsui E&S Shipbuilding and Mitsui & Co will bring further growth potential through expansion of customer base and building up LNG-related vessel business.

“The combined strengths of Yangzijiang and our Japanese partners in shipbuilding, technology and customer network will set the foundation for a strong shipbuilding entity that caters to clients’ demand for high-tech, green vessels especially in the LNG carrier space,” Ren said.

Posted 08 November 2018

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Lee Hong Liang

Asia Correspondent