Colombo Dockyard returns to profit in March

Colombo Dockyard PLC (DOCK) posted a net profit of Rs. 141.43 million for the March quarter (1Q17), recovering from a Rs. 76.66 million net loss year-on-year (YoY) through ship repairing operations, ending the ship builder’s loss-making streak largely due to global headwinds. 
Earnings per share for the first quarter of 2018 increased to Rs. 1.97 from a Rs. 1.07 loss per share YoY. DOCK shares were yesterday trading between Rs. 85-86.
Revenue increased 50.51 percent YoY to Rs. 4.06 billion, while cost of sales increased 49.38 percent YoY to Rs. 3.47 billion.
Net assets per share increased to Rs. 139.90 as at March 31, 2017, compared to Rs. 137.89 at the start of the financial year.
The group asset base declined to Rs. 17.37 billion at end-1Q17 from Rs. 20.39 billion compared to three months ago, mainly through trade and other receivables, while a sharp decline was observed in its short-term borrowings, falling to Rs. 4.08 billion from Rs. 7.41 billion in the same period.
During 1Q17, revenue from shipbuilding increased to Rs. 2.2 billion from Rs. 1.4 billion YoY, which failed to flow down to the bottom line due to increased cost of sales, which restricted gross profits for the segment to Rs. 94.77 million, a fall from Rs. 115.13 million YoY.

Ship repairing revenue increased to Rs.1.64 billion from Rs.1.12 billion YoY, while gross profits increased to Rs.420.33 million from Rs.176.40 million YoY. 
Heavy Engineering sales increased to Rs. 116.92 million from Rs.104.29 million YoY, while gross profits fell to Rs.44.11 million from Rs. 47.79 million YoY. Japan’s Onomichi Dockyard Company Limited owns 51 percent of shares in DOCK. The Sri Lankan government through state-owned agencies owns 35.43 percent of shares in DOCK.