China Rongsheng Heavy Industries Announces 2013 Interim Results; reports loss

China Rongsheng Heavy Industries Group Holdings Limited  yesterday announced its unaudited interim results for the six months ended 30 June 2013 (the "Period"). In the first half of 2013, the Group recorded approximately RMB 1.6 billion in revenue, a year-on-year decrease of 71.1% from RMB 5.5 billion. Loss attributable to equity holders of the Company were RMB 285.5 million, compared to income of RMB 215.8 million in first half of 2012.
Mr. Chen Qiang, Chairman of the Board of Directors, Executive Director and Chief Executive Officer of China Rongsheng Heavy Industries, said, "The global shipping market staggers to the supply-demand imbalance, thus slowing down the overall recovery of the shipbuilding industry. Although the industry has recently showed positive signs that point to a rebound, neither new order price nor volume confirms a recovery. Given the current price index,  shipbuilding companies still encounter difficulty in earning profits on orders."
He added, "In the first half of 2013, global offshore engineering market remained stable. Recently, the State Council issued the "Implementation Plan for Accelerating Structural Adjustment of the Shipbuilding Industry to Promote Transformation and Upgrading (2013 to 2015)", outlining the main tasks for implementing transformation and upgrading of the shipbuilding industry for the next three years. In light of the current market situation, we will continue to effectively implement the established strategies of "transformation and advancement". By management enhancement as well as active market expansion, we will continue development towards a high-end equipment manufacturing enterprise."
Shipbuilding
Shipbuilding was our primary business segment and also our major revenue source. In the first half of 2013, our revenue from the shipbuilding segment was RMB1,479.7 million, representing 93.7% of our total revenue.
New shipbuilding prices have been under severe pressure, with meager profit margins for new orders and harsh contractual terms. In this adverse market environment, we adopted a defensive sales strategy by avoiding low-price orders or orders with unfavorable payment terms. We secured 2 180,000 DWT Capesize bulk carriers for the period. In the first half of 2013, we delivered 7 vessels, representing a total volume of 1.5 million DWT, including 3 380,000 DWT-class Very Large Ore Carriers ("VLOCs"). Including a VLOC delivered in
July, we still have 5 VLOCs pending delivery.
The Group's total orders on hand as at 30 June 2013 consisted of 86 vessels, representing a total volume of approximately 11.8 million DWT with a total contract value of approximately USD4.6 billion. It included 45 Panamax bulk carriers, 2 180,000 DWT Capesize bulk carriers, 6 VLOCs, 23 Suezmax crude oil tankers, 1 Panamax crude oil tanker, 2 Very Large Crude Oil Carriers ("VLCCs"), 1 6,500-TEU containership and 6 7,000-TEU containerships. All the vessels in our order book will be delivered within the period from 2013 to 2016 as stated in the contracts.
Offshore Engineering
With the effort of our Singapore offshore engineering business team established in 2012, we further enhanced our research and development capability in offshore engineering business. Currently we are in preparation of constructing our first international order of one tender barge. We are actively pursuing the high-end offshore engineering projects from various countries and regions.
To read the full report, click: http://www.hkexnews.hk/listedco/listconews/sehk/2013/0828/LTN20130828341.pdf
Source: China Rongsheng Heavy Industries Group Holdings Limited