Yangzijiang Shipbuilding's Profit Surges 61.7% to $1.22b in FY2024

Yangzijiang Shipbuilding (Holdings) Ltd., a Straits Times Index component company, reported a remarkable 61.7% year-on-year (yoy) increase in profit to $1.22b (RMB6.6b) for the financial year ended 31 December 2024 (FY2024). The company's strong performance was driven by growth in both shipbuilding and shipping segments, as well as strategic partnerships and investments.

The group's revenue also rose 10.1% YoY to $4.89b (RMB26.5b), with shipbuilding revenue climbing 10.7% YoY to $4.64b ($25.2b), supported by higher newbuild prices and steady vessel construction. The shipping segment's revenue rose 21.6% YoY to $221m ($1.2b), boosted by improved charter rates and fleet expansion. The Group secured 6-36 month charter contracts for 60% of its fleet in 1H2024, improving revenue stability.

Yangzijiang delivered 64 vessels in FY2024, surpassing its target of 63, with three added to its own fleet. Contributions from joint ventures and associated companies more than doubled to $103m (RMB559m), led by Yangzi-Mitsui Shipbuilding Co. Ltd (YAMIC), which delivered 14 vessels, up from 11 the previous year. As of 31 December 2024, Yangzijiang’s orderbook stood at $32.6b ($24.4b) for 245 vessels, with deliveries extending through 2030. Eco-friendly vessels made up 74% of total order value, up from 54% in FY2023.

The company has proposed a final dividend of 12 Singapore cents per share, an 84.6% increase, bringing the dividend payout ratio to 38.6% and yield to 4%. This improved dividend payout indicates the company's confidence in its financial performance and future prospects.

Yangzijiang's strategic focus on shipbuilding and shipping segments, coupled with its commitment to capitalizing on the energy transition trend, has driven its revenue growth and positioned it for long-term success. The company's strong orderbook, increased vessel deliveries, and improved dividend payout are all sustainable factors that will contribute to its long-term growth.

Joint ventures and associated companies have played a significant role in Yangzijiang's success, contributing to the company's growth and expansion. The company's partnership with Mitsui in YAMIC, for example, has allowed it to expand its market reach and tap into new opportunities. Additionally, Yangzijiang's investment in the Yangzi Xinfu Yard, a new clean energy ship manufacturing base, and the conversion of its fully-owned chemical terminal into an LNG terminal, will enable it to develop a comprehensive LNG logistics hub with storage and distribution capabilities.

To continue leveraging these partnerships for growth, Yangzijiang can explore new joint venture opportunities in emerging markets and sectors, strengthen existing partnerships through research and development, technology sharing, and capacity expansion, and diversify its portfolio of associated companies to include synergistic businesses that complement its core shipbuilding operations.

In conclusion, Yangzijiang Shipbuilding's remarkable profit growth in FY2024 is a testament to the company's strategic focus, strong market demand, and successful partnerships. With a robust orderbook, increased vessel deliveries, and improved dividend payout, the company is well-positioned for long-term success in the global shipbuilding industry.