The global shipbuilding sector has been struggling with a downturn since the global financial crisis as excessive shipbuilding capacity amid surplus shipping tonnage left yards unprofitable.
“Amidst the tepid industry environment, we see signs of recovery as we witness a steady increase in our ship design orderbook and higher volume of M&C (management and consultancy) service enquiries. For the first half of this year, we have secured new ship design contracts amounting to over RMB100m ($16.25m),” said Diao Weicheng, executive chairman of Avic Maritime.
“Furthermore, we are witnessing an increasing demand for environmentally-friendly and fuel-efficient vessels,” Diao said. He added that the acquisition of ship design and engineering firm Deltamarin has positioned Avic Maritime to capture the market as the industry slowly recovers and moves towards eco-ships.
Meanwhile, Singapore-listed Avic Maritime posted a profit attributable to owners of the company of RMB3.73m in the second quarter, reversing from a loss of RMB10.24m in the same period of 2013.
The return to profit was due mainly to a significant decline in operating expenses resulting from foreign exchange gain arising from a long term loan denominated in Euro.
Second quarter revenue, however, sank by 69% year-on-year to RMB43.83m. Avic Maritime explained that due to the delay in completion of a shipbuilding agreement with an Iraqi shipowner for some service vessels, Avic Maritime’s contract price was reduced upon delivery of the vessels, leading to lower shipbuilding revenue and cost of sales.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
