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Yangzijiang sees Q1 profits dip

Yangzijiang sees Q1 profits dip
Yangzijiang Shipbuilding reported a 37% drop in first quarter profits, but has continued grow its orderbook.

The Singapore-listed Chinese shipbuilder made a profit of RMB448m in the first quarter of 2016 compared to RMB706.9m in the same period a year earlier. Revenues were down 11% at RMB2.7bn against RMB3.04bn in the same quarter in 2015, which the company said was due to a decline in shipbuilding revenues.

“With significant oversupply of vessels and weak demand, the shipbuilding industry is going through the downside of a major business cycle. New shipbuilding orders diminished in the market, contract value declined and profit margins were squeezed,” commented Ren Yuanlin, executive chairman of Yangzijiang

“While the market condition impacted Yangzijiang’s financial performance, we remained reasonably profitable after all the persistent efforts.

Yangzijiang has continued to book new orders and including six 400,000 dwt VLOCs worth $510m. As of 31 March the shipbuilder had an orderbook for 93 vessels worth $4.7bn.

As China’s shipbuilding continues its restructuring process Yangzijiang is also eyeing possible mergers and acquisitions. “We will also evaluate M&A opportunities that offer favourable return and are accretive to its core shipbuilding business, as the restructuring / consolidation in the industry brings along some opportunities.