2 March 2017 12:01 am
Colombo Dockyards PLC (DOCK), a unit of Japan’s Onomichi Dockyard, managed to cut down its net losses to Rs.75.78 million from Rs.1.09 billion year-on-year (YoY) through lower sales costs for the quarter ended December 31, 2016 (4Q16), the interim financial
accounts showed.
The loss per share improved to Rs.1.05 in 4Q16 from Rs.15.18 YoY. The DOCK shares were trading at Rs.69 yesterday.
A slower global economy and lower oil prices affected DOCK’s sales, especially due to its specialization in constructing offshore drilling vessels. Some orders had to be renegotiated due to clients expressing difficulties in meeting original terms.
DOCK’s 4Q16 top line fell 45 percent YoY to Rs.2.26 billion, while cost of sales fell 61 percent YoY to Rs.1.84 billion.
Gross profits improved 174 percent YoY to Rs.427.51 million from a loss of Rs.575.04 million. Administrative costs, which increased 17 percent YoY to Rs.498.96 million, weighed down on profit before tax.
The group’s asset base at the end of the year increased to Rs.20.39 billion from Rs.18.26 billion at the start of the financial year, mainly due to increases in receivables.
The net asset value per share fell to Rs.137.89 from Rs141.54 during the same period, as interest-bearing borrowings increased to Rs.7.41 billion from
Rs.4.51 billion.
For the 2016 financial year, DOCK posted a net loss of Rs.286.78 million, falling from a Rs.589.80 million net loss YoY. The loss per share fell to Rs.3.99 from Rs.8.21 YoY.
Revenue declined 30 percent YoY to Rs.10.74 billion, while cost of sales fell 36 percent YoY to Rs.9.17 billion.
The ship repairing segment brought in the highest gross profits with Rs.998.96 million, up from Rs.717.77 million YoY against revenues of Rs.4.56 billion, which increased from Rs.4.31 billion YoY.
The heavy engineering segment posted gross profits of Rs.252.62 million, increasing marginally from Rs.251.74 million YoY, despite revenue from the segment falling to Rs.536.69 million from Rs.870.87 million YoY.
Shipbuilding, the segment which suffered the most, nevertheless posted a gross profit of Rs.225.23 million, up from Rs.60.37 million YoY, while revenue fell to Rs.5.37 billion from Rs.10.09 billion YoY.
However, DOCK received some good news this week, with the Sri Lankan cabinet deciding to award the company a US $ 180 million order to construct three coastguard vessels.
Japan’s Onomichi Dockyard Company Limited owns 51 percent of DOCK shares, while the Sri Lankan government owns 35.58 percent of the shares through various state-controlled funds and
public corporations.