Shipyard dives 44pc on turnover increase
China's Guangzhou Shipyard International said its 1995 net profit plunged 44.7 per cent to 101.3 million yuan (about HK$93.9 million), with profit margins of its container manufacturing being squeezed.
Operating profit fell 8.5 per cent to 121.38 million yuan, although sales increased 19.6 per cent to 1.83 billion yuan.
The profit drop was exacerbated as the 1994 profit included an exceptional item of 86.24 million yuan from foreign exchange gains due to unification of the yuan exchange rate in 1994.
The shipyard said its earnings would have increased by 3.7 per cent if the exceptional item and profits from selling foreign exchange entitlements were excluded from the 1994 figures.
Earnings per share were 20.47 fen. A final dividend of 12 fen will be declared.
The company said its net profit improved significantly in the second half from the first six months, with a rise of 29.2 per cent over the last corresponding period.
Shipbuilding made up 48 per cent of turnover, with a gross profit of 107.4 million yuan. Last year, six vessels were launched and three delivered.
It secured orders for six large vessels with total tonnage of 190,400 deadweight tonnes (dwt) and a total contract value of 1.1 billion yuan. All vessels were for export.
However, the container manufacturing division, accounting for 43 per cent of the turnover with a gross profit of 86.03 million yuan, faced an erosion in profits.
Chairman Ren Fuwei pointed to the soaring raw materials costs and severe price competition.
'In addition, the appreciation of the yuan and the lowering of value-added tax export rebate rate further dampened the profits from exports of containers,' he said.
Last year, it manufactured 45,181 teus (20 ft equivalent units), up 25 per cent from a year ago.
At the end of last year, Guangzhou Shipyard had shipbuilding contracts on hand of 477,400 dwt, worth 2.12 billion yuan, and orders for 19,500 teus at the end of March this year.