Yangzijiang Shipbuilding's profit up 57% to record $765.4m in FY2023

Final dividend is 6.5 Singapore cents per ordinary share.

Yangzijiang Shipbuilding saw its net profits jump 57% to a record high RMB4.1b (approximately S$765.47m) in FY2023, compared to just FY2.61b (S$487.29m) a year earlier, its latest financial statement showed.

Revenue for the whole year rose 16.5% to RMB24.1b (S$4.5b), and gross profit margin rose to 22.4% in FY2023 from 15.4% in FY2022.

For the second half of 2023, Yangzijiang Shipbuilding logged a net profit of over RMB2.37b (S$442.48m), 64.7% higher than in H2 2022.

Cash and cash equivalents were RMB16.6b (approximately S$3.1b) as of 31 December 2023, whilst total borrowers were RMB5.6b (S$1.045b). This translates to a net cash position of RMB11b (S$3.1b).

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

Looking forward, Yangzijiang Shipbuilding said that the global outlook for the shipbuilding segment remains upbeat as a result of ongoing climate-related regulatory push by various authorities.

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Notably, the European Union’s latest mandate– which extends the scope of EU Emissions Trading System to include maritime emissions– is anticipated to drive vessel replacement as ship owners seek to phase out non-compliant legacy vessels.

Yangzijiang has an outstanding book order of US$14.5b for 182 units of vessels as of 31 December. A total of 97 new orders, worth US$7.1b in value, were secured in FY2023. This order book value gives Yangzijiang earnings visibility up until 2027, it said.

“Maritime decarbonisation will remain the key growth driver for the industry in the mid-term. With the tightening of policies being more apparent now, ship operators are accelerating their vessel replacement plans to avoid potential financial impact from non-compliance,” said CEO and executive chairman Ren Letian.

“With our technical capabilities, Yangzijiang Shipbuilding is well-positioned to ride on this upward trajectory and support the industry’s transition,” Ren added.