Asia/Pacific News
Chinese Shipyard Expects 80-99% Plunge in Profits
The Guangzhou Shipyard International Company Ltd. [0317.HK] says it expects its profit for 2012 will be 80 to 99 percent lower than in 2011.
The company's profit warning said the decline of the shipbuilding market and a drop in prices for ships under construction hurt its bottom line, and it also made impairment losses related to new orders and ships under construction.
For the year ended December 31, 2011, the company had a net profit of RMB 518.3 million ($83.3 million) and earnings per share of RMB 0.81 ($0.13).
Chinese shipbuilder China Rongsheng Heavy Industries Group [1101.HK] (China Rongsheng Heavy Industries) warned last month that it too expects a loss for 2012.
Both Chinese officials and industry leaders have predicted that as many half of China's approximately 1,600 shipbuilding companies will file for bankruptcy in the next two to three years, which could help address an unbalanced market that has driven prices down.
