China Ocean Shipbuilding narrows losses

China Ocean Shipbuilding Industry narrowed its losses in 2011 due mainly to the absence of amortisation costs and higher revenue.
The Hong Kong-listed shipbuilder posted a net loss of HK$542.56m ($69.87m) in the financial year ended 31 December 2011, an improvement from a net loss of HK$867.39m in 2010.
Revenue rose to HK$1.1.66bn last year compared to HK$1.31bn a year earlier.
China Ocean said the losses was mainly because of the difficult shipbuilding market condition, and it has negotiated with shipowners to ensure the successful delivery of vessels.
“Obviously, the industry faces overcapacity. With sluggish demand for new vessels, rising costs for labour and material, appreciation of RMB and tightening credit policy imposed by the banks, the small and even medium-sized shipyards are bearing the brunt of the downturn,” China Ocean said.
The company said certain small and even medium-sized shipyards may halt in production upon completion of their existing orders on hand.