Guangzhou Shipyard earnings rise sharply

PUBLISHED : Friday, 17 August, 2007, 12:00am
UPDATED : Friday, 17 August, 2007, 12:00am

Guangzhou Shipyard, a small mainland tanker builder, reported a sevenfold increase in its first-half profit on soaring demand.

Profit for the six months to June reached 465 million yuan, from 65 million yuan a year earlier, as sales increased 55 per cent to 2.33 billion yuan, from 1.5 billion yuan.

Operating income from shipbuilding increased 55 per cent, and from steel structures, 66.4 per cent. The company delivered and completed seven vessels, began work on 10, and launched eight during the period.

The company also secured new shipbuilding orders with a total value of 3.49 billion yuan. At the end of June, the company had orders for 61 vessels to be delivered by 2011.

Seventy per cent of the shipbuilding contracts are for exports, mainly for clients from Denmark, Italy, Sweden and Malta.

Shipyards across the mainland, the world's second-biggest builder by order backlog, had record sales in the first half, boosted by demand domestically and abroad.

New orders rose 165 per cent to 42.6 million deadweight tonnes, increasing the backlog 107 per cent to 105 million deadweight tonnes as of June 30, according to the China Association of National Shipbuilding Industry.

Profit at the shipyards surged 151 per cent to 6.4 billion yuan as sales rose 54 per cent to 80.7 billion yuan, according to the association.

Guangzhou Shipyard also completed 20,905 tonnes of steel structures, and sold 88 hydraulic shearing machines and 155 elevators.

Shares of Guangzhou Shipyard have more than doubled this year on speculation that it would acquire a Guangzhou shipyard from parent company China State Shipping Corp, which is planning to inject profitable assets into its listed units.

Last month, it injected shipbuilding assets into Shanghai-listed Hudong Heavy Machinery.

Shares of Guangzhou Shipyard closed at HK$41.95 yesterday, down 12.6 per cent.