Shares in China Rongsheng Heavy Industries, the mainland's largest privately controlled shipbuilder, fell 4.45 per cent yesterday to end the day's trading at HK$2.36 before the company announced its annual results after the market closed.
Chief financial officer Sean Wang Shaojian said net profit was 1.72 billion yuan (HK$2.1 billion) last year, largely unchanged from 2010.
This included subsidies of 1.2 billion yuan from the Jiangsu government, against 800 million yuan in subsidies received in 2010, said chief executive Chen Qiang.
The flat earnings came after an increase in tax liability to 298 million yuan last year up from 264 million yuan a year earlier, Chen said.
Total revenue climbed 25.6 per cent to 15.9 billion yuan from 12.7 billion yuan in 2010, reflecting an increase in instalment payments made by Vale on its fleet of 12 very large ore carriers.
Commenting on the results Jon Windham, Asian marine transport analyst at Barclays Capital, said net income attributable to shareholders in the second half tumbled to 504 million yuan, down 59 per cent compared with the first half.
'Assuming the subsidy was split evenly throughout the year, the second half result, excluding the subsidy, was a loss of 96 million yuan,' he said, adding that rapid deterioration in second-half profitability was driven by delays in delivery of Vale's very large ore carries.
Chen said the shipbuilder delivered its first very large ore carrier, Vale China, to the Brazilian commodities group in November. He added that a second vessel was on sea trials and two more were nearing completion.
Delivery of the ships 'was a bit later than originally planned', he said and Vale was still negotiating with the mainland authorities to allow the 400,000 deadweight tonne ships to berth at Chinese ports. Beijing banned vessels of more than 300,000 dwt from berthing at Chinese ports citing safety concerns.