Two shipbuilders report earnings

CHINESE shipbuilders Cosco Corp and Yangzijiang Shipbuilding seem to be sailing in markedly different waters with the duo reporting sharply contrasting earnings on Tuesday. Higher operational costs and a generally tough trading environment ate into Cosco's profits and resulted in an 80 per cent slump to $22.3 million from the same period a year ago.
Turnover fell 24 per cent to $752 million, as it repaired and built fewer ships and lower charter-hire rates took a toll on its dry bulk shipping business.
Mr Jiang Li Jun, Cosco's vice-chairman and president, admitted that the road to recovery remained 'bumpy with little solid evidence of a sustainable growth in sight. Cosco also warned that it expects earnings for the year to be 'substantially lower' than 2008.
On the other hand, Yangzijiang sang a more upbeat tune, as its earnings for the first nine months at 1.6 billion yuan had already surpassed that of the whole of last year. Net profit for the third quarter rose 17 per cent to 554.2 million yuan, while revenue climbed 28 per cent from 2.02 billion yuan to 2.59 billion yuan.
The smaller of the two shipbuilders said it is on track to deliver a total of 40 vessels this year as scheduled and the remaining 10 vessels are in the final stages of construction.