| HONG KONG
HONG KONG Dec 4 China Rongsheng Heavy
Industries Group, the country's largest private
shipbuilder, said on Wednesday it expects to report a
substantial full-year loss just months after it appealed to the
government for financial help.
The struggling shipbuilder said this year an unspecified
number of workers had been made redundant and it reported a net
loss of 1.3 billion yuan ($213 million) for the first half of
the year amid a prolonged industry slump.
"The company believes that the net loss is primarily
attributable to the decrease in revenue as a result of the
company's conservative sales strategy under the current trough
stage of the shipbuilding market," China Rongsheng said in a
statement to the Hong Kong stock exchange.
Analysts have said the company could be the biggest casualty
of a local shipbuilding industry suffering from overcapacity and
shrinking orders amid a global shipping downturn.
Greek ship owner Dryships Inc has already questioned whether
some of the ships on order at China Rongsheng will be delivered,
which could hit its revenue and profitability next year.
Dryships has four dry bulk carriers on order at the
company's shipbuilding subsidiary, Jiangsu Rongsheng Heavy
Industries, that are due for delivery in 2014.
"The deliveries of these vessels are severely delayed," said
Ziad Nakhleh, Dryships chief financial officer, during a third
quarter results presentation last month.
China Rongsheng, which sought financial help from the
government in July, has said it won only two shipbuilding orders
worth $55.6 million last year when its target was $1.8 billion
worth of contracts.
The company told Reuters on Wednesday it had delivered 7
vessels (1.5 million DWT) in the first half of 2013, and had
delivered at least two 380,000-DWT class very large ore carriers
in the second half of the year.
The company declined to say how many new orders it has
received so far this year.
Rongsheng's profit warning was made after the close of
trading in Hong Kong.
Its shares had fallen 1.7 percent in trading on Wednesday,
lagging a 0.8 percent loss in the benchmark Hang Seng Index
. They have fallen 7.3 percent so far this year.