|
BEIJING—Guangzhou Shipyard International Co., the only
Hong Kong-listed shipbuilder, more than tripled
fourth-quarter profit after expanding capacity and
shortening construction times. The company’s shares rose
the most in a month.
Net
income climbed to 259.8 million yuan ($37 million) in
the fourth quarter from 81.3 million yuan a year
earlier, according to numbers derived from 2007 earnings
announced by the company to the Shanghai stock exchange
last week. Sales gained 254 percent to 2.24 billion yuan.
Record
demand for ships to carry imports of raw materials to
China and exports of consumer goods is fueling earnings
growth in the nation’s shipbuilding industry. Chinese
yards are expanding to help achieve the government’s
goal of surpassing South Korea as the biggest
shipbuilding nation by 2015.
“The
company’s capacity has expanded along with higher
contract prices, so that helped enlarge the growth
margin for the shipbuilding business,” said Jack Xu, a
Shanghai-based analyst at Sinopac Securities Co.
Guangzhou Shipyard International, based in the southern
Chinese city of Guangzhou, last year expanded capacity
by adding a dry dock and increased profitability by
reorganizing production processes to save time and
money. It completed 16 ships during the year and took
new orders for 1.14 million deadweight tons of ships, or
24 vessels, the statement said, without providing last
year’s figures.
The
shipyard plans to deliver 18 vessels this year.
Expansion of facilities to build blocks—giant steel
modules that are built separately and then assembled
into ships—will relieve capacity shortages this year,
the company said.
Worker
shortage, work-space restrictions and yuan exchange-rate
risks curbed earnings growth, the company said.
Suppliers of steel plates used to build ships have
raised prices 35 percent, which will also impact
earnings once the shipyard’s three- to four-month
inventory runs out, Sinopac’s Xu said.
“The
company’s growth will slow with some negative impact
from the rising cost of steel plates,” Xu said.
Guangzhou Shipyard will use derivative financial
instruments such as foreign-currency options to
alleviate exchange-rate losses which occur because
shipbuilding contracts are paid in dollars in several
installments as the value of the yuan rises, it said,
without providing further details.
China
State Shipbuilding Co., the listed unit of the country’s
biggest shipbuilder, reported March 17 that it more than
doubled net income in 2007 and expects sales to rise as
much as 36 percent this year.
China
surpassed South Korea in terms of new vessel orders in
2007, according to data compiled by Clarkson Plc., the
world’s largest ship broker. Chinese yards booked orders
for 103.6 million deadweight tons of vessels, compared
with Korea’s 94.8 million, according to data provided by
London-based Clarksons on January 11.
The
nation lagged behind
South Korea
in new orders measured by compensated gross tons.
Deadweight tonnage measures a finished ship’s carrying
capacity and doesn’t reflect the cost of building a
vessel or its sale price. Compensated gross tonnage is a
measure that accounts for ship size and the time
required and materials used in building the vessel.
The
quarterly results were derived from numbers the company
reported based on mainland
China
accounting standards, which differ from standards used
in
Hong Kong, where Guangzhou Shipyard's shares also trade.
China's
exchanges require companies to report earnings each
quarter, while the Hong Kong exchange requires only
half-yearly statements.
Full-year net income more than tripled to 938.6 million
yuan, or 1.8973 yuan a share, from 266.6 million yuan,
or 0.539 yuan, a year earlier based on international
accounting standards, the company said in its statement.
Sales jumped 79 percent to 5.9 billion yuan, it said.
(Bloomberg) |
