Yangzijiang’s net profit sank 17% to $223.3m in Q2

Its shipbuilding margins are squeezed.

Mainboard-listed Yangzijiang Shipbuilding reported that its net profit sank 17% to $223.3m (RMB 1.0b) in the second quarter.

The decline was mainly attributed to lower shipbuilding margins. Gross shipbuilding profit margin slipped to 15% in Q2, compared to 24% in the same quarter last year.

Yangzijiang recognized that Chinese yards have been hardest hit by the offshore market downturn, with new orders falling by 72% year-on-year.

“After a short recovery in the shipbuilding market in the first half of 2014, the contraction mode resumed in the past two quarters. The prolonged downturn has led many companies in the industry, including the larger ones, to face financial difficulties,” Yangzijiang warned.