Tougher 2Q but Dockyard ends 1H with better results

By Dilani Goonewardene

Colombo Dockyard Plc had faced a tough second quarter, though managing to report improved results in the first half.

Consolidated revenue grew by 6% in the second quarter ended 30 June 2011 to Rs. 3.5 billion but gross profit dipped by 36% to Rs. 440.6 million. Pre-tax profit dipped by 26% to Rs. 233.5 million. This was despite 285% increase in other income to Rs. 116.8 million.

Group after tax profit and net profit attributable to equity holders dipped by 25% to Rs. 210.8 million and Rs. 210.4 million respectively.

Despite this dip, thanks to robust first quarter, Dockyard finished first half with better results in comparison to a year earlier.

Consolidated profit after tax in the first half of this year had gained by 24% to Rs. 678 million over the same period last year as revenue rose by 14% to Rs. 6.7 billion.  Net profit attributable to equity holders of parent amounted to Rs. 677.2 million, up from Rs. 546 million a year earlier.

Group cost of sales had increased by 17% to Rs. 5.4 billion in the six months and gross profit improved by 3.7% to Rs. 1.35 billion. Distribution cost rose 91% to Rs. 12.6 million while administration expenses increased 16.7% to Rs. 857 million. Other income increased by 192% to Rs. 163 million while other expenses which were Rs. 81 million in the first six months of 2010 converted to an income of Rs. 30 million. Net financial income declined 3.8% to Rs. 38 million.

Income from ship building which constitutes 58% of total improved 8% to Rs. 3.9 billion, income from ship repairs which accounts for 35% of total rose 28% to Rs. 2.4 billion. The remaining share of income attributable to heavy engineering fell from Rs. 189 million to Rs. 97 million while sales in off shore engineering and material fell 3.6% to Rs. 107.9 million.

First half performance overall appears to be in line with optimism forecast by Dockyard Chairman A. Nakauchi in the company’s 2010 Annual Report.

"As we navigate into a year that is better than the last we believe the world has seen the worst of the recession and is now on the threshold of growth and development the industry therefore will see better times in the year ahead," Nakauchi said.