Guangzhou Shipyard H1 profit up 15%

Guangzhou Shipyard International Co., a unit of China's biggest shipbuilder, said that first-half net income increased 15 per cent as rising demand for vessels allowed it to increase contract prices.

Net income climbed to 533.1 million yuan (S$110.3 million), or 1.08 yuan a share, from 465.2 million yuan, or 0.94 yuan, a year ago, the company said in a statement to the Hong Kong stock exchange yesterday. Sales rose to 3.08 billion yuan from 2.33 billion yuan. The numbers were prepared in accordance with Hong Kong accounting standards.

Record raw material imports are spurring vessel orders at Chinese shipyards, pushing the nation towards overtaking South Korea as the world's biggest shipmaker. The company's full-year profit will get an additional boost from doubled production capacity after it completes the acquisition of Guangzhou Wenchong Shipbuilding Ltd from its parent, it said earlier this month.

Guangzhou Shipyard fell 3.8 per cent to close at HK$13.56 (S$2.46) yesterday, before the earnings announcement. The Hong Kong stock exchange was closed yesterday because of a typhoon. The shares have lost 69 per cent this year, compared with the 27 per cent slide in the benchmark Hang Seng Index.

The order book at the Guangzhou, southern China-based company expanded by five vessels of a combined 80,500 deadweight tons, yesterday's announcement said. The company has accumulated orders for 65 vessels of 2.8 million deadweight tons.

Guangzhou Shipyard on Aug 19 said that its shareholders approved a rights offer to raise funds for buying the Wenchong yard from parent China State Shipbuilding Corp. Guangzhou Shipyard, a maker of handysize tankers, will use Wenchong to expand in smaller container vessels.

Full-year profit will increase by 54 per cent, helped by the Wenchong acquisition, Zeng Xiangxin, said Guangzhou Shipyard's chief accounting officer, on Aug 4. China State Shipbuilding put the yard on the block for 3.04 billion yuan, according to a June 27 statement.