The Colombo Dockyard PLC reported Rs. 337 million after tax profit for the financial year ending December 31, 2018, compared with Rs. 26 million in the previous year.
CEO, D.V Abeysinghe told the shareholders of the company yesterday, “We have been able to cross over the financial losses of the last three years, although there has been no significant growth in profitability yet,” addressing the annual general meeting (AGM) of Colombo Dockyard PLC at the Galadari Hotel. Abeysinghe said, “2018 was another tough one due to the continuing low demand for shipbuilding and heavy competition. In addition to the successful order for a cable laying vessel, the company was able to contract two vessels for the Port Authority of Iraq through a subsidiary of Toyota. We won an award to deliver two pilot boats to Sri Lanka Ports Authority through an international competitive tender. We were able to increase the revenue by 14% for the new building segment.” “The financial situation of the country did not help us to realize the cabinet recommended vessels for the coast guard. Ship repair sector in turnover (USD) dropped by 7.5% mainly due to non-operation caused by the need for repair on docks.”
He said, “We are optimistic about the future of the ship repair sector with some of the global changes in the maritime industry.
The sulfur cap by 2020 and the ballast management regulation will be good revenue avenues for ship repair business.” He added, “we are willing to expand our float repair business as well. We need to develop hydro-blasting and to improve the hull repair capacity to invite some prospective private owners.”
The CEO mentioned the construction of underwater restaurants in the Maldives and spoke of a wide range of opportunities available in the market. He ended by sayin,g “the outlook of our core business remains challenging.”
Chief Financial Officer Gihan Ravinatha answering a question on the drop in gross profit said “due to the competition we have to give preferential prices. That is why we see gross profit reduction.”
Ravinatha said, “To control FX aspects we use forward contracts.” He later added responding to a question on the FX impact on profitability “because of Rs. depreciation there is obviously a gain.
We usually expect 5-6% depreciation but for the last 2 years, there has only been a 3% decline.
We were penalized by low depreciation.”
The share DOCK.N last traded at Rs. 54 had earnings for the fiscal year of Rs. 6.03 and approved a dividend payment of Rs. 1.5. The share has a net asset value of 142.23 per share. All matters put to the shareholders were unanimously passed.
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