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Sri Lanka’s Colombo Dockyard returns to losses in Dec on forex transactions

Dry docks at Colombo Dockyard, where the firm repairs ships. Colombo Dockyard Photo

ECONOMYNEXT- Colombo Dockyard Plc, a Sri Lankan shipbuilding unit of Japan’s Onomichi Dockyard, reported a 90.98 million rupee loss for the December quarter, down from a 433.51 million rupee profit a year earlier due to lower foreign exchange income and scrap sales.

The firm reported a loss per share of 1.24 rupees. For the 12 months ended December, Colombo Dockyard lost 23.38 rupees a share. The firm’s share opened at 50.40 rupees on Monday.

Revenue for the December quarter fell 33.8 percent to 3.21 billion rupees, while cost of sales fell 40.13 percent to 2.64 billion rupees, leading to gross profits rising 29.66 percent to 572.38 million rupees.

Revenue on shipbuilding and heavy engineering segments halved for the quarter from a year earlier, while ship repairing sales grew. Gross margins of both ship repairing and heavy engineering fell, while shipbuilding returned to profitability.

Other losses for the December quarter amounted to 27.94 million rupees, falling from a gain of 451.57 million rupees a year earlier.

Colombo Dockyard had made an ‘unprecedented’ rise in other income a year earlier due to gains from foreign exchange and sale of steel scrap, which had given the firm its only year of profit since 2015.

The firm, which formerly received most of its shipbuilding orders from the offshore oil industry, has been making a loss due to the shale oil boom in 2015, which had led to lower oil prices.

This led to the firm diversifying into construction of boats for other purposes such as cable laying, and heavy engineering.

Net finance income for the quarter fell 31.1 percent to 66.46 million rupees. Short-term borrowings grew to 3.67 billion rupees from 2.71 billion rupees a year earlier. (Colombo/Mar03/2020)

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