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Avic Maritime swings to profit in first quarter

Avic Maritime swings to profit in first quarter
Avic International Maritime Holdings (Avic Maritime) swung to a profit in the first quarter, erasing the loss in the same period of 2015, thanks to significant other gains from forex exchange.

First quarter net profit was recorded at RMB5.13m ($786,800), reversing from the loss of RMB11.59m in the same period of last year, due primarily to a hike in other gains.

The Chinese group’s other gains for the first quarter rose significantly to RMB14.22m as against the loss of RMB3.7m in the previous corresponding period. The considerable increase is a result of the Singapore dollar strengthening against the US dollar.

Singapore-listed Avic Maritime, however, posted a sharp 48% year-on-year fall in revenue to RMB73.09m in the quarter ended 31 March 2016. The lower revenue was due to reduced income from shipbuilding amid the industry slump.

During the first quarter, the group delivered three ships and its ship design arm Deltamarin secured new designing contracts amounting to EUR4.3m ($4.9m).

“The shipbuilding market has remained challenging and there is no sign of a quick recovery in the short term,” said Diao Weicheng, executive chairman of Avic Maritime.

“We shall focus on enhancing our performance through exploring to design and build specialised vessels, such as asphalt carriers and roro vessels, where there is more promising demand,” Diao commented.

“The phenomenon of reduced shipbuilding activities has driven low earnings in the industry. Subdued market conditions and low levels of customer activity are likely to persist in the second quarter of 2016 and possibly beyond,” he added.