GSI gains plummet as tax changes hurt, building prices fall

PUBLISHED : Saturday, 12 April, 1997, 12:00am
UPDATED : Saturday, 12 April, 1997, 12:00am

Guangzhou Shipyard International's net profit in 1996 plunged 67.4 per cent to 33.3 million yuan (about HK$30.9 million), as the result of a lower export tax rebate rate and an unfavourable shipbuilding price.

Operating profit fell 67.2 per cent to 39.8 million yuan, although turnover gained 12.4 per cent to 2.06 billion yuan.

Earnings per share fell to 0.673 fen from 20.47 fen.

The net profit of the shipbuilder was down for a second-year. It had dropped more than 44.7 per cent in 1995, with container manufacturing being squeezed.

The company attributed last year's poor profit performance to a lower export-tax rebate rate, unfavourable shipbuilding prices and a decline in container output and prices.

The company noted that 1995s net profit was helped by a foreign exchange gain of 30.28 million yuan, because that year's account was prepared in yuan, while 1996's account was prepared in accordance with Hong Kong generally accepted accounting principles.

The company recommended a final dividend of five fen.

Chairman and general manager of Guangzhou Shipyard Hu Guoliang said the H-share company's main business had attained steady growth last year.

The shipbuilding division had a record of nine completed vessels and secured new orders for nine vessels, including a 27,000 deadweight-tonne (dwt) carrier from Sino-Foreign Transportation Group, which place order first time.

In the first quarter to March 31, the company had a total tonnage of 660,000 dwt shipbuilding contracts on hand, with a net value of 4.15 billion yuan.

Mr Hu said the company would continue to strengthen internal management structure, reduce operation cost as well as to increase the cost effectiveness of its products this year in order to maintain a competitive edges.