YANGZIJIANG Shipbuilding cruised to a record net profit, with favourable tax policies and higher interest income filling its sails.
The mainboard-listed Chinese firm reported record quarterly earnings of 1.24 billion yuan (S$251 million), a 52 per cent spike in net profit from last year.
The jump in profit came about despite total revenue dropping 3 per cent to 4.27 billion yuan.
The company announced yesterday that its shipbuilding revenue declined by 3.2 per cent to 3.9 billion yuan as it delivered only nine vessels in the quarter, down from 11 last year.
Much of its earnings was buoyed by a 317 per cent jump in other income to 215 million yuan.
It recorded a one-off realisation of 130 million yuan interest income from its cash deposits that matured during the three months to June 30.
A one-off tax refund of 349 million yuan also lent support to its bottom line as its wholly owned subsidiary, Jiangsu New Yangzi Shipbuilding, was accredited as a high or new technology enterprise.
This enabled the unit to enjoy the preferential corporate income tax rate of 15 per cent from 2013 for three years.
Net profit for the half-year rose 33 per cent to 2.04 billion yuan over the same period a year ago, while revenue grew 7 per cent to 7.83 billion yuan.
Earnings per share rose to 32.26 fen from 21.18 fen previously, while net asset value per share rose to 4.9277 yuan as at June 30, from 4.6455 yuan as at Dec 31.
The company secured 32 shipbuilding contracts worth US$1.4 billion (S$1.75 billion) in the first half of this year, boosting its outstanding order book to US$5 billion at the end of June.
Executive chairman Ren Yuanlin said in a statement that the firm will focus on its core strength of shipbuilding to benefit from the recovering shipping industry.
This article was first published on August 7, 2014.
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