Yangzijiang's net profit surges 73% to $146m in Q2

Thanks to the strong turnout in its shipbuilding business.

Shipbuilder Yangzijiang recorded a 73% surge in its net profit for the past quarter ending in June to RMB 719.9m ($146m), a 73% increase from the last year's RMB 415.4m.

According to the group, its total revenue increased 27% to RMB3.8b despite only delivering four vessels. Its revenue derived from shipbuilding business increased by 25% from RMB1.8b in 2Q16 to RMB2.3b in 2Q17, primarily attributable to the construction of vessels of larger size during the quarter.

Meanwhile, the revenue generated by trading business and other shipbuilding related businesses, such as shipping logistics & chartering and ship design services, were also higher in 2Q17, supported by higher trading volume and higher charter rate.

Under investment segment, although the size of the HTM assets decreased in 2Q17, interest income increased to RMB341m, from RMB258m in 2Q16. The higher interest income was mainly due to higher average interest rate as a result of more long-term investments in the portfolio.

Additionally, its gross profit margin for Shipbuilding business was at 20% for 2Q17, lower than the 24% for 2Q2016. The lower margin was mainly due to the lower contract price of vessels under construction. Other shipbuilding related business generated higher gross profit of RMB12m in 2Q17 compared to a gross loss of RMB19m in 2Q2016, supported by improved charter rate for the shipping logistics & chartering business. Net interest income margin for HTM investment improved slightly from 94% for 2Q16 to 95% for 2Q17.

The group's other income maintained at a similar level of about RMB 50m as compared to 2Q16. The Group recorded other gains of RMB189m, including some fair value gains on its financial assets, from outstanding currency-hedging derivative financial instruments, and from the dissolution of four shipping companies under its shipping arm, which was offset by an exchange related loss.