Colombo Dockyard losses widen in 2Q

Sri Lanka’s largest shipbuilder, Colombo Dockyard PLC (DOCK), which operates in collaboration with Japan’s Onomichi Dockyard, saw its net losses widening during the April-june quarter (2Q18) amid rise in costs and slowdown in income from its main business activities—shipbuilding and repairing.

The net loss for 2Q18 widened to Rs.142.1 million from a net loss of Rs.36.5 million reported for the corresponding quarter of the previous year. The loss per share further deteriorated to Rs.1.98 from 51 cents.

On quarter-on-quarter basis also the losses widened as the net loss for 1Q18 stood at little over Rs.120 million. But DOCK was able to narrow its losses significantly during the December quarter (4Q17) to just Rs.192, 000.

However, during 2Q18 the group was able to increase its top line by 11 percent year-on-year (YOY) to Rs.3.5 billion, although gross profit fell 34 percent YOY to Rs.279.9 million due to higher cost of sales which rose 18 percent YOY to Rs.3.2 billion.

The fall in the global oil price hit DOCK hard as building of offshore support vessels for oil platforms was the company’s specialty. DOCK had to cancel or renegotiate most of the orders placed for such vessels by customers with the fall in oil prices.

DOCK Chairman Toru Takehara in last year’s annual report said he didn’t expect a recovery in the shipbuilding market over the short and medium-term. He said DOCK would focus on building niche, high-tech ships as a coping strategy, until the demand for its popular offshore support vessels return to normalcy.