iMarine

CSSC says low-priced orders will be cleared by the end of 2024

On November 29, China State Shipbuilding Corporation (“CSSC”) held an online briefing on its third-quarter results.

CSSC has four shipyards, namely Jiangnan Shipyard (Group) Co., Ltd., Shanghai Waigaoqiao Shipbuilding Co., Ltd., CSSC Chengxi Shipyard Co., Ltd. and Guangzhou Shipyard International Co., Ltd.

According to CSSC’s previous disclosure, in the first three quarters of this year, CSSC achieved operating income of RMB 56.169 billion (approximately USD 7.756 billion), a year-on-year increase of 13.12%. Net profit attributable to shareholders of listed companies was RMB 2.271 billion, a year-on-year decrease of 11.35%.

Regarding the decrease in profits, Shi Weidong, director and general manager of CSSC, replied that this was mainly due to the non-monetary asset exchange gains and losses caused by the disposal of offshore engineering platforms by Shanghai Waigaoqiao Shipbuilding in the same period last year. Excluding the impact of this matter, the net profit attributable to the parent in the first three quarters increased by 5530.7% year-on-year.

Shi Weidong introduced that by the end of June 2024, CSSC had accumulated 322 civilian ship orders, totaling 23.6218 million deadweight tons, with a total order value of RMB 199.639 billion. Judging from the orders that took effect in a single quarter, the contract amount in the third quarter of 2024 was slightly higher than the same period last year. At present, the orders on hand are full, with the schedule extending to the end of 2027, and some to 2028.

Shi Weidong also said that the relatively low-priced ship orders the company undertook before the first half of 2021 are in the process of gradual delivery and clearance, and will be basically cleared by the end of this year.

As of the first half of this year, CSSC has received orders for 109 civilian ships with a total of 8.5577 million deadweight tons and RMB 68.425 billion, with a year-on-year increase of 38.21% in tonnage; 190 ships with a total of RMB 1.174 billion in ship repair business; and RMB 1.179 billion in contract value in application industry. Among the new ship orders, there are mainly 35 oil tankers, 31 bulk carriers, 18 liquefied gas carriers, 14 PCTCs, and 10 container ships; green ship types account for more than 50%, mid-to-high-end ship types account for more than 70%, and batch orders account for more than 70%.

On September 19, CSSC disclosed a major asset reorganization proposal to merge China Shipbuilding Industry Company limited (CSIC) through share swap. The reorganization will regulate the competition between CSSC and CSIC. After the completion of the transaction, the surviving company will become China’s largest shipbuilding listed enterprises.

Regarding the progress of the restructuring, Shi Weidong said that since the disclosure of the plan, the company and relevant parties have actively and steadily promoted various tasks such as due diligence, auditing, and valuation. After the completion of the above work, the company will convene the board of directors again to review the relevant matters of this transaction, and the board of directors will submit the above proposals and other proposals related to this transaction to the shareholders’ meeting for review. The relevant work is progressing normally.

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