Yangzijiang Shipbuilding’s earnings jump 47% YoY to $1.19b in FY 2021

This is the shipbuilding group’s highest net profit since 2011.

Singapore Exchange (SGX)-listed Yangzijiang Shipbuilding saw its net profit attributable to shareholders (earnings or PATMI) climb to its highest peak since 2011, increasing 47% YoY to  $1.19b (RM3.7b) in the financial year (FY) 2021.

Given the latest financial results, the shipbuilding proposed a final dividend of $0.05 per share for FY 2021.

The group likewise saw an increase in its total revenue in FY 2021, rising 13% YoY to $3.61b (RMB16.8b) on the back of increases in the shipbuilding’s segments during the second half (H2) of 2021 namely core shipbuilding which was up 80% to $1.79m (RMB8.420m), and shipping which climbed to $118.5m (RMB551m).

Revenue from its other shipbuilding related businesses such as trading and ship design services, however, declined to RMB358m in 2H2021 due to “lower trading revenue.”

Meanwhile, interest income derived from the investment segment declined to $180.2m (RMB838m) in H2 2021, mainly due to the lower average interest rate earned from new investments during the period.

The China-based shipbuilding company has proposed a spin-off of its investment business through a separate listing on SGX Mainboard in a bid to “position itself as a pure-play shipbuilding company.”

“This spin-off will allow the group to focus on its core shipbuilding business, strengthening its corporate governance by accelerating its ESG repositioning and is likely to attract new investors to come on board, especially investors with a preference of limiting their investment exposure to within the shipbuilding sector. This could also lead to a revaluation of the company, as it can be directly compared to other listed peers such as the Korean and Japanese shipbuilders,” the group said.

The group has already obtained pre-clearance from the Singapore Exchange Securities Trading Limited to spin-off its investment arm for listing on the Mainboard of SGX, and last 11 February, the Spin-off Group has applied for listing on the Mainboard of the SGX-ST by way of an introduction.