staying ahead

168 Pages·2013·2.89 MB·English

Yangzijiang Shipbuilding (Holdings) Ltd. Yangzijiang Shipbuilding (Holdings) Ltd.
6 Battery Road, #39-02 揚子江船業(控股)有限公司
Singapore 049909
STAYING AHEAD
ANNUAL REPORT 2012
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CORPORATE INFORMATION
DIRECTORS
Ren Yuanlin, Executive Chairman
Yu Kebing, Non-independent Non-Executive Director
Teo Yi-dar, Lead Independent Director
Teo Moh Gin, Independent Director
JOINT COMPANY SECRETARIES
Joanna Lim Lan Sim
Pan Mi Keay
COMPANY REGISTRATION NUMBER
200517636Z
REGISTERED OFFICE
80 Robinson Road #02-00
Singapore 068898
BUSINESS ADDRESSES
1# Lianyi Road, Jiangyin-Jingjiang Industry Zone,
Jingjiang City, Jiangsu, China 214532
SHARE REGISTRAR AND SHARE TRANSFER OFFICE
Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
AUDITORS
PricewaterhouseCoopers LLP
Certified Public Accountants
8 Cross Street
#17-00 PWC Building
Singapore 048424
Partner-in-charge: Tan Khiaw Ngoh
(appointed on 27 April 2012)
(a member of the Institute of Certified Public Accountants of Singapore)
ANNUAL REPORT 2012 | YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD.
CONTENTS
02 | Financial Highlights 41 | Independent Auditor’s Report
04 | Corporate Profile 42 | Consolidated Income Statement
06 | Chairman’s Message 43 | Consolidated Statement of Comprehensive Income
12 | Corporate Milestones 44 | Balance Sheets
14 | Board of Directors 46 | Consolidated Statement of Changes in Equity
16 | Senior Management 47 | Consolidated Statement of Cash Flows
20 | Operations and Financial Review 49 | Notes to the Financial Statements
25 | Corporate Governance Report 136 | Statistics of Shareholdings
37 | Directors’ Report 138 | Notice of Annual General Meeting
40 | Statement by Directors 143 | Appendix I
Proxy Form
PAGE 01
YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD. | ANNUAL REPORT 2012
FINANCIAL HIGHLIGHTS
REVENUE (RMB’MLN)
201.1% increase from FY2008-FY2012
20,000
15,706
14,799
15,000 13,558
10,624
10,000
7,359
5,000
0
FY2008 FY2009 FY2010 FY2011 FY2012
PATMI (RMB’MLN)
226.6% increase from FY2008-FY2012
3,977
4,000
3,581
2,955
3,000
2,290
2,000
1,580
1,000
0
FY2008 FY2009 FY2010 FY2011 FY2012
DIVIDEND (SINGAPORE CENTS)
178.6% increase from FY2008-FY2012
6 5.5
5.0
5 4.5
4 3.5
2.8
3
2
1
0
FY2008 FY2009 FY2010 FY2011 FY2012
PAGE 02
ANNUAL REPORT 2012 | YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD.
FINANCIAL HIGHLIGHTS
2012 2011 2010
31 December 31 December 31 December
Rmb’000 Rmb’000 Rmb’000
Results
Revenue 14,799,092 15,705,828 13,558,184
Gross Profit 4,571,519 4,862,695 2,907,872
Other Income 292,824 150,067 240,796
Other Gains 385,936 452,044 93,361
Net Profit Attributable to Shareholders 3,580,773 3,976,599 2,955,340
Financial Position
Total Assets 33,202,298 33,739,004 26,168,054
Shareholders’ Equity 15,510,191 12,974,006 9,928,254
Cash and Cash Equivalents 2,086,659 3,152,365 4,543,038
Basic EPS (Rmb cents) 93.45 103.68 79.85
Dividends (Singapore Dollar) 0.05 0.055 0.045
Share Price at Period End (Singapore Dollar) 0.96 0.91 1.91
Market Capitalisation ar Period End
Net Profit % 24% 25% 22%
Payout Ratio 27% 26% 30%
P/E 5.23 4.3 12.24
P/B 1.21 1.32 3.78
Dividend Yield 5.21% 6.04% 2.40%
No. of Shares (’000) 3,831,838 3,831,838 3,836,838
PAGE 03
WE ARE ONE OF THE LEADING
SHIPBUILDERS IN THE PRC, OFFERING
INTEGRATED MARINE AND OFFSHORE
SERVICES THAT INCLUDE VESSEL DESIGN
AND CONSTRUCTION, FABRICATION, MARINE
ELECTRICAL SYSTEMS, SHIP BREAKING.
CORPORATE PROFILE
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YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD. | ANNUAL REPORT 2012
CHAIRMAN’S MESSAGE
THE MOST PROFITABLE SHIP YARD
IN CHINA AND THE SEVENTH MOST
PROFITABLE WORLDWIDE IN 2012.
The year 2012 remained difficult for the shipbuilding industry with
weak vessel demand, depressed vessel prices, a tight ship finance
market, low shipping demand, and margin erosion. Such unfavourable
circumstances have led to newbuild orders placed with shipyards
worldwide falling by over 60% in the past two years. In the face of
these challenges, it has been another exciting year for us as we
implemented our strategy to deliver shareholder value with consistency.
FORTIFIED BY MULTIPLE INCOME STREAMS
To mitigate the cyclical nature of our core shipbuilding business, it
is our long-term strategy to generate about 60% of revenue from
construction of marine vessels and the remaining 40% from related
activities such as the offshore sector, ship demolition and other non-
shipbuilding activities.
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ANNUAL REPORT 2012 | YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD.
CHAIRMAN’S MESSAGE
In order to achieve our long-term strategy, on 1 January We currently manage more than Rmb 11 billion of financial
2012, we very purposefully set up YZJ Offshore assets that are over and above our Rmb 2 billion cash
Engineering Pte Ltd (“YOEPL”), a 45%-owned joint reserve, which is held for working capital, expansion and
venture providing marketing, procurement, front end dividend payment needs. Having supplementary income
engineering and design, and management consultancy streams puts us in the favorable position of being able to
services for the construction, fabrication and repair of be selective on shipbuilding contracts during downturns.
oil & gas marine vessels and platforms. Following the That means we need not enter contracts on compromised
setting up of YOEPL, together with one of our wholly terms and conditions.
owned subsidiaries, Jiangsu Yangzijiang Shipbuilding
Co. Ltd (“Jiangsu Yangzijiang”), another new subsidiary In FY2012, Group revenue was Rmb 14.8 billion, down
named Jiangsu Yangzijiang Offshore Engineering Co., 5.8% year-on-year. Revenue from shipbuilding and related
Ltd (“JYOEC”) was set up in Taicang. On 3 December activities contributed about 91.1% to Group revenue while
2012, JYOEC secured its maiden offshore contract – a revenue from investment segment contributed 8.9%. Net
Jackup Drilling Rig worth US$170 million. Some of our profit attributable to shareholders was Rmb 3.6 billion,
other recent ventures that extend on our shipbuilding down 10.0%. Our balance sheet remained strong, with
capabilities include steel fabrication for building facades net assets of Rmb 16.3 billion, total cash holdings of
of petrochemical plants, energy equipment manufacturing Rmb 6.3 billion and a low gearing of 7.0%. Among
as well as other non-shipbuilding activities. conglomerates engaged in shipbuilding last year, we
were the second most profitable in Singapore, the most
Beyond shipbuilding and its related activities, we profitable in China, and the seventh most profitable
have developed supplementary income streams from worldwide. Our diversification strategy had enabled us to
conservatively managed businesses such as low-risk keep margins stable even though shipbuilding activity has
financial investments. We also leveraged on our strong declined. Gross profit margin was 30.9% compared to
balance sheet to assist ship owners in ship finance and 31.0% a year ago. Net profit margin was 24.2% compared
lease vessels for income. to 25.5% a year ago.
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YANGZIJIANG SHIPBUILDING (HOLDINGS) LTD. | ANNUAL REPORT 2012
CHAIRMAN’S MESSAGE
LOWER SHIPBUILDING OUTPUT AND ORDERS Segment revenue from our core business of shipbuilding
and related activities was down 7.7% year-on-year at
We took the initiative to cease 12 shipbuilding contracts Rmb 13.5 billion.
last year after evaluating business conditions. We found
new buyers for 8 of them, have not commenced work on PRUDENT FINANCIAL MANAGEMENT
two vessels and are looking for buyers for the remaining
two, which are 2,500-TEU containerships. As a result The decline in shipbuilding income was mitigated by a
of the ceasations, output was less than planned. We 19.6% increase in segment revenue from our investment
delivered 51 vessels compared to 62 vessels in FY2011. segment to Rmb 1.3 billion. This was driven by increased
As there was less shipbuilding activity, we streamlined investment in held-to-maturity financial assets and the
operations to take place at 2 yards – New Yangzi Yard growth of our micro financing business. The Group’s
and Xinfu Yard. Our Jiangsu Yangzijiang Yard was investments function as an important supplementary
vacated. Operations at our Changbo Yard were halted revenue stream during downturns. The most important
and it is currently a standby yard. aspect of this division is risk management. We have a
large team of highly qualified banking veterans in our
To ensure a positive operating cashflow, we decided not treasury department and risk management team. Every
to accept newbuilding orders at contract values below investment is carefully evaluated to ensure risk is well
variable cost of production. This resulted in a sharp managed.
decline of newbuilding orders secured last year, which
fell 74.1% to US$300 million. The Group’s outstanding In January 2013, we raised about S$18.15 million through
shipbuilding order book was US$3.4 billion as at 22 a placement of 330 million unlisted warrants. The warrants
February 2013, comprising of 64 vessels. This includes were issued at 6.05 Singapore cents and have an exercise
the exercise of options in January 2013 by Seaspan price of Rmb 7.617 per share. Assuming all the warrants
for four 10,000-TEU containerships valued at US$360 are exercised, the Group will receive additional proceeds
million. When we secured our maiden contract for the of about S$495 million. To a certain extent, the issue
10,000-TEU containership in June 2011, Seaspan placed proceeds will strengthen the Group’s working capital
orders to build 7 units of 10,000-TEU containerships and position as we build our 10,000-TEU containerships and
was granted options for 18 identical additional units. In first offshore order. It will also provide financial flexibility
November, we commenced work on the 10,000-TEU as we implement our diversification strategy.
containerships, a niche dominated by Korean yards before
we came in. THE YEAR AHEAD
As a world-class shipyard, we continued to roll out We expect the shipbuilding environment to remain difficult
vessels with increasingly higher loading capacity, greater in 2013. We intend to deliver 42 vessels in 2013, which
fuel-efficiency, eco-friendly design and other innovative is lower than the 51 vessels we had in 2012. Our 2013
features. Last year, we delivered our maiden 4,250-TEU product mix will comprise more of large containerships
containership to Cosco Shipping. During its maiden of higher value. In 1H2013, we shall deliver our maiden
voyage, the vessel passed US Port inspection with 4,800-TEU containership, which shall be yet another
zero violations. We received rave commendations from flagship product.
customers for this product and expect it to be our flagship
for the next two years.
PAGE 08