Guangzhou Shipyard hit by falling prices, rising costs

China State Shipbuilding Corp unit Guangzhou Shipyard International (GSI) saw 2012 net profit plunge 98% to RMB10.33m ($1.66m) from RMB518.33m previously as newbuilding prices fell and costs rose.
Declining prices, appreciation of the Chinese currency against the US dollar and changes in the demand-supply relationship in the shipbuilding market led to costs exceeding revenue in the group's shipbuilding business and resulted in a loss of RMB415.34m for contracts in the current year, GSI said.
Income from the key shipbuilding operations fell by more than a quarter to RMB5.27bn leading to an operating loss of RMB 241.87m. This was caused by lower prices, with shipbuilding output value falling 25.2% to RMB5.26bn. Inroads made in the non-ship business segment however, with output value from these businesses rising by more than half from the year before to RMB914m.
Source: Seatrade Global