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Yangzijiang Shipbuilding’s Profit Surged by 57% Reach Record High of $765.4 million in FY2023

According to its latest financial statement, Yangzijiang Shipbuilding witnessed a significant increase in net profits, soaring by 57% to a record high of RMB4.1 billion (approximately S$765.47 million) in FY2023, compared to just RMB2.61 billion (S$487.29 million) the previous year.

The company’s revenue for the entire year also experienced a notable uptick, rising by 16.5% to RMB24.1 billion (S$4.5 billion). Furthermore, the gross profit margin improved to 22.4% in FY2023 from 15.4% in FY2022.

In the latter half of 2023, Yangzijiang Shipbuilding achieved a net profit of over RMB2.37 billion (S$442.48 million), marking a remarkable 64.7% increase compared to H2 2022.

As of December 31, 2023, the company held cash and cash equivalents amounting to RMB16.6 billion (approximately S$3.1 billion), while total borrowings stood at RMB5.6 billion (S$1.045 billion), resulting in a net cash position of RMB11 billion (S$3.1 billion).

A proposed final dividend of 6.5 Singapore cents per ordinary share has been suggested, pending shareholders’ approval. This would signify a 33.7% dividend payout ratio for FY2023.

Looking ahead, Yangzijiang Shipbuilding expressed optimism regarding the global outlook for the shipbuilding sector, citing ongoing climate-related regulatory initiatives by various authorities.

Of particular note is the European Union’s recent mandate, which expands the EU Emissions Trading System to encompass maritime emissions. This development is expected to incentivize vessel replacement as ship owners aim to phase out non-compliant legacy vessels.

As of December 31, Yangzijiang boasts an impressive book order totaling US$14.5 billion for 182 units of vessels. Throughout FY2023, the company secured 97 new orders valued at US$7.1 billion. This robust order book provides earnings visibility for Yangzijiang until 2027.

CEO and Executive Chairman Ren Letian highlighted, “Maritime decarbonization will continue to drive growth in the industry in the medium term. With the tightening of regulations becoming more evident, ship operators are expediting their vessel replacement initiatives to mitigate potential financial repercussions from non-compliance.”

Ren further emphasized, “With our technical expertise, Yangzijiang Shipbuilding is well-positioned to capitalize on this upward trend and facilitate the industry’s transition.”

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