Rongsheng said the net loss was primarily due to the low prices of shipbuilding orders in depressed market conditions and the diminishing profitability of the conventional shipbuilding business.
Repeating a troubling refrain, the company added that the net loss was also due to the decline of production activities of Jiangsu Rongsheng Heavy Industries despite considerable fixed production cost and the adjustment of the contract price of certain shipbuilding contracts. "Such loss may lead to adverse effects on the production and operation, financial position and repayment capacity of Jiangsu Rongsheng Heavy Industries," the company warned.
The company has been proactively adopting measures to improve operational performance and financial position, and to mitigate liquidity pressure, it said in a stock market announcement. These include negotiating with principal Chinese banks on its loan terms, obtaining financial support from a shareholder of its holding company, negotiating for better payment terms and revising up prices of certain existing shipbuilding orders, redesigning operation flow and controlling costs for existing shipbuilding orders, maximizing sales efforts and obtaining the appropriate project-based financing as well as working with key suppliers to try and cut costs.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
