Things are looking so good that the YZJSB will self-fund their customer's cancelled orders and be "selective" in taking on new orders.
During the boom time, project-based companies generally need a lot of working capital to fund the construction of their projects. YZJSB is no different with a inventory/contract asset turnover of ~ 6 months. But with large amount of contract liabilities (customer deposits), its working capital (receivables/contract assets/inventories minus payables/contract liabilities) as end 1H24 is
negative, thanks to a 4bil reversal compared to end FY23. Things are looking fantastic on this front!
Even with the pending 3billion CAPEX on the shipyard expansion, it is pretty clear that cash is building up fast on the BS. Historically, YZJSB's dividend payout ratio is ~30% and the retained capital was accumulated with YZJFH to do its shadow banking business. With YZJFH already spun off, the natural question would be
Where will that excess capital go now?
From AR23, Ren Junior is paid ~600k sgd and top5 KMP a total of 900k sgd. Rens are getting close to 20mil of dividends instead, while its YZJSB Employee Trust gets ~10mil too. Nice Common Prosperity theme.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
During 1H2024, Yangzijiang Shipbuilding secured a total of 79 new orders worth USD8.5 billion with 79% of new orders for green vessels with the likes of gas carriers, LNG dual-fuel vessels, and methanol dual-fuel vessels. With six more months remaining, the Group has already surpassed its FY2024 new order target of USD4.5 billion. In 1H2024, the Group also terminated the shipbuilding contracts for two units of 175,000CMB LNG carriers. The Group will utilize our own funds to complete their constructions and subsequently sell them on the market.
As of 30 June 2024, the Group has an outstanding orderbook of USD20.2 billion for 224 units of vessels.
In terms of vessel deliveries, the Group is on track to meet the full-year target of 63 vessels. As of 30 June 2023, Yangzijiang Shipbuilding has delivered 37 vessels, including 2 vessels built for its own fleet. In the near term, and given the current capacity of the yards, the Group will be selective on adding new orders to its record orderbook.
https://links.sgx.com/FileOpen/YZJSH_1H2...eID=815163