Imabari Shipbuilding, Japan’s largest shipbuilder, managed to turn a profit last year, despite facing further increases in material costs.

The shipbuilder said it delivered 60 ships in 2021, amounting to 3.4m gt, which, on a tonnage basis, is roughly the same as last year. It rang up sales of ¥365bn ($2.6bn), down 2% on the previous year.

“We managed to secure a profit,” said Imabari president Yukito Higaki at a Tokyo press conference without disclosing further details.

Commenting on this year, he added: “I think the sudden increase in steel prices of the previous year will put pressure on the profitability of ships delivered in 2022, but we want to make efforts to somehow stay in the black.”

Imabari recorded its second-highest order intake in 2021, contracting 129 vessels. The high level of contracting was helped by Nihon Shipyard, a new joint venture shipbuilding company established with Japan Marine United.

The yard was successful in winning orders for ultra large container ships, bulkers and LNG-fuelled car carriers. But higher material costs are raising questions for Imabari on new contracting for the rest of this year. “In these conditions, I wonder if we can continue to take orders in this way for the rest of the year,” Higaki said.

Weak Japanese yen

The Japanese yen is now trading at a 24-year low against the US dollar. In theory, a weak yen should boost Japanese shipbuilders’ income from US dollar-denominated export contracts.

Higaki said the company would be unable to take advantage of the weaker yen because it had not planned for the current level of depreciation, while higher material costs are putting pressure on its earnings.

Imabari is planning to start production of LNG fuel tanks at its Nishi Tadotsu plant this year to decrease its reliance on importing LNG tanks from China.

The move is also aimed at meeting future demand for LNG-fuelled ships. Imabari is also developing hydrogen, ammonia, sail and battery technology for ships.