SINGAPORE (Feb 28): Yangzijiang Shipbuilding reported 4Q17 earnings increased by 12% to RMB 677.9 million ($141.7 million) from RMB 607.8 million in 4Q16.

This brings FY17 earnings to RMB 2.93 billion, 67% higher than RMB 1.75 billion in FY16.

Revenue for the quarter was 15% higher at RMB 6.35 billion compared to RMB 5.51 billion a year ago, mainly due to progressive construction of more larger size containerships.

Cost of sales increased by 33% to RMB 5.41 billion from RMB 4.07 billion last year, mainly due to a provision of RMB 1.20 billion for expected losses recognised on construction contracts recorded in 4Q17 as a result of the rising costs of raw materials and the weakening of USD against RMB.

Therefore, gross profit was 34% lower at RMB 944.2 million compared to RMB 1.43 billion in the previous year.

Other income jumped 65% to RMB 505.1 million from RMB 306.4 million a year ago, mainly due to the recognition of RMB 402 million advances payment from customers of terminated contracts.

Other losses were 89% higher at RMB 400.8 million compared to RMB 212.1 million last year, mainly due to foreign exchange loss and fair value loss on financial assets.

Administrative were lower with impairment loss declining 45% y-o-y to RMB 235.9 million and other expenses dropping 1% to RMB 49.1 million.

Finance expenses were 73% lower at RMB 39.2 million from RMB 146.7 million.

The group has recommended a final cash dividend of 4.5 cents per share.

Looking forward, the group will further build up its order book, capturing opportunities in both the dry bulker and containership segments.

In addition, it will continue to push forward the R&D in the LNG related vessels space, and gradually build up the capabilities in this field.

Shares in Yangzijiang closed 1 cent lower at $1.51 on Wednesday.