Profits hit as shipbuilders enter choppy waters

Profits of two of China's major shipbuilders plunged last year amid an industry downturn.

China CSSC Holdings Ltd, the Shanghai-listed arm of the nation's largest shipbuilder China State Shipbuilding Corp, last year only generated 1 percent of its net profit in 2011, while Guangzhou Shipyard International Co Ltd reported a 98.01 percent year-on-year slump in 2012 net profit.

Severe market sluggishness and a lingering hangover from the financial crisis have led to significant drops in completed shipbuilding orders and new contracts, the two companies said in separate filings on Tuesday.

China CSSC Holdings' net profit dropped 98.81 percent to 26.87 million yuan ($4.27 million), while Guangzhou Shipyard International's net profit tumbled 98 percent to 10.33 million yuan.

China CSSC Holdings posted profit of 546 million yuan in the first three quarters in 2012, meaning it generated a loss of more than 500 million yuan in the final three months.

Data from the Ministry of Industry and Information Technology showed Chinese shipbuilders completed orders fell 21.4 percent year-on-year in 2012, while new orders dropped 43.6 percent.