SINGAPORE (Aug 5): Yangzijiang Shipbuilding saw its earnings slip 6% to RMB 936.4 million ($185.7 million) for the 2Q19 ended June, from RMB 994.9 million a year ago.

Earnings per share (EPS) fell to 23.73 RMB cents in 2Q19, compared to 25.08 RMB cents in 2Q18.

2Q19 revenue saw a 12% decline to RMB 7.03 billion, from RMB 7.96 billion a year ago.

In a filing to SGX on Monday, Yangzijiang says this was due to the group’s exceptionally strong performance in corresponding quarter last year.

The decline was led by a drop in revenue contribution from its core Shipbuilding business to RMB 3.08 billion in 2Q19, down 41% from RMB 5.24 billion a year ago.

Some 18 vessels were delivered in 2Q19, just two vessels lower than a year ago.

In line with increased size of investments in debt investment at amortised costs, the group’s Investment segment recorded interest income of RMB 528.0 million, 34% higher than interest income of RMB 393.7 million a year ago.

Total gross profit dropped 23% to RMB 1.20 billion in 2Q19, from RMB 1.56 billion a year ago, as gross profit margin dipped 3 percentage points to 17% during the quarter.

As at end June, cash and cash equivalents stood at RMB 4.11 billion.

In 1H19, the group secured new orders for five vessels with total contract value of US$209 million ($288 million), bringing its outstanding order book to US$3.1 billion for 85 vessels as at June 30, 2019.

These orders will keep the group’s yard facilities at a healthy utilization rate up to the end of 2020 and provide a stable revenue stream for at least the next 18 months.

“For decades, we have been focused on quality, efficiency and R&D to strengthen our core capabilities and bring high-value-added vessels to ship owners. This was the essence of Yangzijiang being able to both ride the waves when market conditions were favourable, and also avoid major adverse impact of industry downturns,” says Ren Letian, CEO of Yangzijiang.

“On top of traditional vessel types, we have gradually set up an integrated structure for LNG business, with the construction of LNG carriers at the centre. LNG-related business will be an important catalyst that elevates Yangzijiang’s growth in the next decade,” he adds.

Share in Yangzijiang closed 4 cents lower, or down 2.8%, at $1.38 on Monday before its results announcement.