Mainboard-listed Yangzijiang Shipholdings has reported earnings of RMB761.7 million ($155.7 million) for the 1QFY2021 ended March, 89% higher than earnings of RMB403.8 million for the 1QFY2020.

Despite the higher earnings, revenue during the period fell 25% y-o-y to RMB2.62 billion due to lower shipbuilding activities and lower trading revenue, but offset by revenue from other shipbuilding businesses due to an expanded fleet size and improved charter rates.

Gross profit, however, increased by 12% y-o-y to RMB802.3 million.

The group’s gross profit margin (GPM) improved 11 percentage points y-o-y to 31%, due to the construction of more containerships and larger-sized vessels, as well as improved charter rates.

The group recorded other gains of RMB63.8 million due to a RMB212 million mark-to-market gain on USD-denominated assets, partly offset by a fair value loss of RMB170 million due to USD/CNY forward contracts acquired to manage the group’s exposure to the US currency.

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Yangzijiang also recorded a net reversal of impairment loss on financial assets of RMB154.3 million under administrative expenses in the 1QFY2021 compared to a provision of impairment loss of RMB176.1 million in the same period a year before.

Cash and cash equivalents as at March 31 stood at RMB13.42 billion.

Global new shipbuilding orders in the first three months of 2021 continued to be “strong” underpinned by strong demand for containerships.

Year-to-date 2021, the group secured new orders for 75 vessels with a total contract value of US$4.01 billion ($5.32 billion), the group’s largest order wins since 2008.

The group, as at April 29, has an outstanding orderbook of US$6.6 billion for 146 vessels, its highest level since 2009.

The figure will provide the group with a stable revenue stream for at least two more years.

“Yangzijiang was the key beneficiary to the strong demand for orders placed for containerships since the fourth quarter of 2020, backed by its strong capabilities in this market. Our current outstanding orderbook is at its highest levels since 2009 and to increase capacity, the group will resume operations at its Changbo yard in the second quarter of 2021,” says Ren Letian, executive chairman and CEO of Yangzijiang.

“The Changbo yard will allow the group to deliver six to seven mid-sized vessels every year. I will also like to thank our customers for their trust in Yangzijiang as we continue with our efforts to become one of the best shipbuilders in the world. We will continue to stay ahead of environmental regulations and we aim to play a part in the decarbonization of the shipbuilding industry and increase our capabilities in building ecofriendly vessels,” he adds.

Shares in Yangzijiang closed flat at $1.46 on April 29