Colombo Dockyard returns to profit in Sept. quarter

Sri Lanka’s largest shipbuilder, Colombo Dockyard PLC (DOCK), a unit of Japan’s Onomichi Dockyard, returned to profit during the September quarter (3Q18), after two quarters of losses, largely helped by a surge in other income, the interim financial accounts released to the Colombo bourse showed.

The company reported earnings of Rs.2.23 per share or Rs.165.1 million for the quarter under review, against a loss per share of Rs.1.10 or net loss of Rs.78.2 million.

The revenue for the quarter rose little over 27 percent year-on-year (YoY) to Rs.4 billion. But the cost of sales rose at the faster pace of 30 percent YoY to Rs.3.7 billion, resulting in a flat gross profit of Rs.290.2 million.

However, the group performance buoyed by a 294 percent YoY surge in other incomes to Rs.398 million, which appears to be stemming from a foreign exchange gain.
However, for the nine months ended September 30, 2018, DOCK was in red with a net loss of Rs.101.9 million, against a net profit of Rs.25.5 million reported for the same period, last year.

The revenue for the period fell 2.5 percent YoY to Rs.10.1 billion, with contributions from both shipbuilding and ship repairing segments underperforming.
The shipbuilding segment reported revenue of Rs.4.4 billion for the nine months ended September 30, 2018, down from Rs.5.3 billion reported for the same period, last year. 

The segment’s gross profit however improved to Rs.126.8 million, from Rs.106.9 million.  

The ship repairing segment reported a gross profit of Rs.374.5 million, down from Rs.964.9 million on revenue of Rs.4.2 billion, down from Rs.4.3 billion reported last year.

The heavy engineering segment saw a steady increase in revenues and profits during the period under review, compared to the previous year. The segment reported a gross profit of Rs.262.1 million on revenue of Rs.928.5 million.

Japan’s Onomichi Dockyard Company Limited owns 51 percent of DOCK while the state collectively owns about 35 percent of the issued shares of the firm through various state-owned institutions.