Rongsheng losses mount

Rongsheng Heavy Industries, the struggling Chinese shipbuilder, has posted a first half loss of just over CNY 3bn ($498m).

Revenue at the shipbuilder slumped 78.4% to CNY 340m versus the CNY 1.6bn seen in the corresponding period last year.

“For the period under review the unfavourable operating environment for shipowners persisted amid the unsatisfying performance of the global shipping market,” Rongsheng said.

As a result, it said shipowners were requesting that shipyards postpone the delivery of their newbuildings.

As a consequence it said this reduction in production activity at its core shipbuilding segment led to the significant decline in its revenue.

Despite the deterioration in the shipping industry the shipbuilder still managed to secure fresh newbuilding contracts.

During the first half of the year it obtained orders for six 64,000-dwt bulkers worth $167.4m from an undisclosed shipowner.

Rongsheng’s newbuilding order backlog as of the 30 June 2014 now stands at 90 vessels of 11.5mdwt worth $4.2bn.

These include 24 ultramax bulkers of 64,000-dwt, 25 panamaxes, 13 VLOCs, 20 suezmaxes, two capesizes plus two VLCCs and three post-panamax containerships.

Rongsheng said eight newbuilding contracts were cancelled during the first half of the year, two of which were sold to another shipowner.

Shares in the Hong Kong-listed company were suspended Friday morning pending the release an announcement in respect of the restructuring of the group.