DOCK.N0000 (COLOMBO DOCKYARD PLC)

2017 was not a profitable year for the Ship Builder of Sri Lanka..

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For many companies Revenue is often growing. Yet for DOCK Revenue has reached a plateau and the company is struggling to not to fall from the high plateau..

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Company could slightly  over come the negative trend in EPS though the figure still appears in negatives.


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Market Value is well below Net Assets Value.

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Thanks YK

Companies with higher net profit margins often declare good dividends. Therefore DOCK is not for dividend hunters.

Hydro power companies are in a position to declare better dividends.

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Thanks YK for the analysis ...


As I remember once SLS has mentioned that the major revenue comes from ship repairing.not building ships.So crude oil price play an important role for their profit.



Quoted from CEO - Mr.D.V Abesinghes speech "

" Abeysinghe said oil prices must recover up to at least between US $ 60 to US $ 80 for a viable offshore oil and gas exploration and extraction. Although the outlook for 2017 is challenging as the global marine sector recession is expected to continue up to 2018, Abeysinghe is hopeful of securing a few shipbuilding projects this year while also strategically diversifying into other types of ships going beyond offshore support vessels market."

spw19721 wrote:Thanks YK for the analysis ...


As I remember once SLS has mentioned that the major revenue comes from ship repairing.not building ships.So crude oil price play an important role for their profit.



Quoted from CEO - Mr.D.V Abesinghes speech "

" Abeysinghe said oil prices must recover up to at least between US $ 60 to US $ 80 for a viable offshore oil and gas exploration and extraction. Although the outlook for 2017 is challenging as the global marine sector recession is expected to continue up to 2018, Abeysinghe is hopeful of securing a few shipbuilding projects this year while also strategically diversifying into other types of ships going beyond offshore support vessels market."

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Column1	2017	2016
Ship Repairs	5,943.00	4,560.00
Ship Buildings	6,038.00	5,374.00
Heavy Engineering	71.00	39.00

seems like both contributes around 50:50..

Yes...

To be exact

Description	2017	2016
Ship Repairs	49.31	45.72
Ship Buildings	50.10	53.89
Heavy Engineering	0.59	0.39
	100.00	100.00

Thanks YK.

Saw this over the weekend.

Actually , what I said/meant was major earnings/profit margins ( not revenue)  for DOCK  come from ship repairing  ( not building) . The profit margin for repairing services is much higher than ship building. Ship building may bring bigger revenue when they have lot of orders, but profit margin is relatively less.


Even if you look at  March 2018 report ( which is not great as to be expected as explained last year) , you can see the fact  stated above on profit margins.

DOCK will recover in earnings when shipping business improves in the world .
Most part of world shipping business is related to  Oil in some way or the other.
With oil prices going up , there is possibility that starting later this year DOCK
might improve business.

But it a bit too early to say such. Let's watch.  

yellow knife wrote:

spw19721 wrote:Thanks YK for the analysis ...


As I remember once SLS has mentioned that the major revenue comes from ship repairing.not building ships.So crude oil price play an important role for their profit.



Quoted from CEO - Mr.D.V Abesinghes speech "

" Abeysinghe said oil prices must recover up to at least between US $ 60 to US $ 80 for a viable offshore oil and gas exploration and extraction. Although the outlook for 2017 is challenging as the global marine sector recession is expected to continue up to 2018, Abeysinghe is hopeful of securing a few shipbuilding projects this year while also strategically diversifying into other types of ships going beyond offshore support vessels market."

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[size=15][b][size=15][b][size=15][b][size=15][b]Column1[/b][/size][/b][/size][/b][/size][/b][/size]	[size=15][b][size=15][b][size=15][b][size=15][b]2017[/b][/size][/b][/size][/b][/size][/b][/size]	[size=15][b][size=15][b][size=15][b][size=15][b]2016[/b][/size][/b][/size][/b][/size][/b][/size]
Ship Repairs	5,943.00	4,560.00
Ship Buildings	6,038.00	5,374.00
Heavy Engineering	71.00	39.00

Thanks SLS.

I didn’t know a constructive discussion is going on here..

I suespect DOCK lower revenue is from change of accounting practice. It was made in the statement..

We can expect DOCK to remain profitable once offshore vessels business become vibrant once oil price hike to above 80.

They secured 3 ship building projects now. But looks like margin is quite low.. this is probably a slow collection time. Anyway looks too early as SL mentioned...

Thanks SLS and Jana

slstock wrote:Saw this over the weekend.

Actually , what I said/meant  was major earnings/profit margins ( not revenue)  for DOCK  come from ship repairing  ( not building) . The profit margin for repairing services is much higher than ship building. Ship building may bring bigger revenue when they have lot of orders, but profit margin is relatively less.


Even if you look at  March 2018 report ( which is not great as to be expected as explained last year) , you can see the fact  stated above on profit margins.

DOCK will recover in earnings when shipping business improves in the world .
Most part of world shipping business is related to  Oil in some way or the other.
With oil prices going up , there is possibility that starting later this year DOCK
might improve business.

But it a bit too early to say such. Let's watch.  




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[size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b]Column1[/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size]	[size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b]2017[/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size]	[size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b][size=15][b]2016[/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size][/b][/size]
Ship Repairs	5,943.00	4,560.00
Ship Buildings	6,038.00	5,374.00
Heavy Engineering	71.00	39.00

[/quote]





Thanks for the clarification  sir. I used the word revenue coz I admit I had no idea about differnces between earnings and revenue.

Anyway Dockyard is reaching towards 70 which is very tempting..

DOCK March 2019 report showing some positive aspects.

01) First time since 2014 company show profit after tax.
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02) Total Liabilities reduced from 22%

But still stock trading around 54

Colombo Dockyard PLC, the leading shipbuilding and ship repair service provider in Sri Lanka, launched the Rapid Response Afloat Repair Service (RRARS) to provide preventive and breakdown repairs through a dedicated unit to handle afloat repairs/voyage with services capability at all local ports.
The RRARS was soft-launched in 2017 and has been in operation over the past two years, gaining the confidence of the shipping fraternity calling at Sri Lanka’s ports. The official launch of the Unit took place on May 31, 2019. The rapid response team has been strengthened and systems streamlined to accommodate the inquiries smoothly and effectively.
The rapid response team has been strengthened and systems streamlined to accommodate the inquiries smoothly and effectively.
Colombo Dockyard PLC Managing Director/CEO D.V. Abeysinghe said the RRARS will provide discerning ship owners and ship managers with fast response and reliable repair services.
The afloat repair services will be available at Colombo, Galle, Trincomalee, and Hambantota ports.
“All efforts have been taken by the ship owner to minimise downtime especially during these tough times. We are confident of achieving great heights in the new venture backed by experience and expertise for over four decades.
RRARS undertook 68 repair jobs in 2017 since the soft launch, 83 in 2018 and 38 up to May 2019. The afloat repair unit has handled over 100 projects since its soft.
“The operation is earmarked to gain the confidence of many owners, managers and grow to be a force to be reckoned with in the near future,” Abeysinghe said.
Colombo Dockyard PLC set up in 1974 is a BOI registered and a Colombo Stock exchange listed company.

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Colombo Dockyard delivers Japanese cable ship, eyes Sri Lanka dredger deal

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ECONOMYNEXT – Colombo Dockyard has delivered a submarine cable-laying ship for Japan’s Kokusai Cable Ship Co. Ltd., its biggest and most sophisticated vessel, and says it wants to bid to build a dredger for a Sri Lankan government agency.

The high-technology “KDDI Cable Infinity” is meant for subsea operation and cable installation and repair works of both optical communications and power cables, the yard’s managing director and chief executive D.V. Abeysinghe said.

Having delivered the first vessel of this type after a two-year period, Colombo Dockyard can now bid to build similar vessels in future, under its strategy of building more sophisticated vessels in niche markets, he told reporters.

Colombo Dockyard won the contract from Kokusai Cable Ship Co. against competition from other Asian yards including from Japan, Singapore and Malaysia, he said.

Yukihiro Fujji, who represented Kokusai Cable Ship Co. (KCS), the Japanese owner, at the delivery, said there was plenty of work for cable ships with more undersea cables being laid for both fibre optic communications and power transmission.

About 99 percent of Japan’s internet traffic goes through submarine cables, said Fujji, board member and director of engineering and facility planning department of KCS, part of the big Japanese telecom operator KDDI Corporation.

Build quality, delivery time and price were factors considered in awarding the contract to Colombo Dockyard, he , told economynext.com.

The home port of KDDI Cable Infinity, which can operate globally, will be Kitakyushu, the northernmost city on Japan’s southern Kyushu Island, from where it will do cable installation and repair in the Asia-Pacific region.

Abeysinghe, of Colombo Dockyard, which is majority owned by Japan’s Onomichi Dockyard Company, said the yard also wants to bid for a dredger which Sri Lanka Land and Development Corporation (SLLRDC) is to buy.

SLLRDC, now renamed Sri Lanka Land and Development Corporation, wants the dredger for sea sand mining to meet growing requirements of the construction industry as sand stocks on land get depleted.

But Abeysinghe said a contract condition specifying previous building experience restricted Colombo Dockyard from bidding for the dredger deal.

“We would like this condition removed because if we don’t get the first ship in any type of ship building activity, we will never gain the experience to build them.”

Minister of Ports and Shipping Sagala Ratnayaka said the ministry would lobby for removal of the prior experience condition.

A Dockyard statement said ‘KDDI Cable Infinity’ is diesel electric driven, another first for the yard, with power provided by four generator sets, developing 2,300kW each, and a range of 10,000 nautical miles

The basic design and production drawings for the construction were supplied by VARD Designs, Norway, and the vessel is built to ClassNK classification society standards and meets the regulatory requirements of the Japanese government.
(COLOMBO, 22 June, 2019)

Dock is Sri Lanka’s next generation business mainly due to advanced technology the firm has and the improving importance to the country’s geographical location in the east world sea route. Good for longterm investment.

Dockyard Update

Apr-Jun 18 Quarter PAT - (141mn)
Oct-Dec 18 Quarter PAT - 433mn
Jan-Mar 19 Quarter PAT - (183mn)
Apr-Jun 19 Quarter PAT - ???

Dockyard has a relatively stagnant fixed cost base so any increment in revenue and some additional income in the P&L can generate them profits. Q1 2019 loss was mainly through losses in other income mainly due to exchange gain or losses. As we had a relatively stable exchange rate during Q2 and Dockyard had secured some new projects in Q2 I expect they are to report some good earnings in the Apr-June 19 quarter.

In terms of share price performance the stock was trading within a price band of 50 - 55 during the month of July where most of the market stocks had a good run. But I see some increase in volumes now with price gaining the momentum. It surpass 60 for the first time in 2019.

RSI has moved to 70 with increasing volumes. Other technical indicators too should improve if the new trend continues.

It will be a worthwhile exercise to search for the background as I believe investors have an opportunity with this stock in the short term to medium term. If the political developments continue to push the market in coming days then I can predict more price gains in the days ahead.

Most important thing is for them is to make a decent good report for Q2 which will be most probably released by 15th August.

Colombo Dockyard loss widens to Rs1bn in June quarter

ECONOMYNEXT - Sri Lankan ship yard Colombo Dockyard’s losses widened sharply to just over a billion rupees in the June 2019 quarter as it lost business owing to April’s suicide bombings, interim accounts showed.

Sales of the yard, owned by Japan’s Onomichi Dockyard Company Limited, plunged 38 percent to 2.2 billion rupees in the period from a year ago as the bombings worsened a slowdown caused by the prolonged global slump in shipping.

Colombo Dockyard had a loss of 142 million rupees in the June 2018 quarter.

Colombo Dockyard loss per share was 14.92 rupees in the June 2019 quarter. The share last traded at 58.10 rupees.

In the six months to June 2019, the loss per share was 17.52 rupees with the net loss almost 1.3 billion rupees with sales down four percent to 5.9 billion rupees.

The accounts showed that Colombo Dockyard’s losses came from the yard’s shipbuilding business while ship repair turned a profit in the six months to June 2019, albeit slightly lower than the year before.

The group’s heavy engineering business profits also grew.

“In addition to challenging market conditions, the company was adversely impacted by the terrorist attack which occurred in April 2019,” a note to the accounts said.

The bombings, which killed over 250 people, caused a one and half month delay and substantial cost escalation in building of a cable laying vessel (CLV) which was finally delivered to Japan on 23rd June 2019.
Progress of existing two shipbuilding projects for Iraq was negatively impacted and project milestones were shifted, Colombo Dockyard said.

“Ship repair volumes reduced substantially after the incident as the ship owners were reluctant to select Colombo for their repairs due to travel bans imposed by foreign governments and security concerns,” it said.

Also, a new contract for three vessels with a European client the yard was expected to sign by end of April 2019 was cancelled after the attack due to security concerns in Sri Lanka.

The management said it estimated a direct financial impact of 800 million rupees for the first half of 2019, due to the terrorist attack in April 2019.

“However, management is confident that the company will come to positive financial performances in 2020, with improved market conditions, potential shipbuilding orders, capacity improvement in ship repair and heavy engineering segments, cost reductions and productivity improvements.”
(COLOMBO, 16 August 2019)

ECONOMYNEXT – State-run Sri Lanka Port Authority is to award a deal to build a pilot launch to Colombo Dockyard Plc, a Colobo publicly traded firm, the state information office said.

Sri Lanka Ports Authority has earlier given an order for two pilot vessels.

The cabinet of ministers had cleared the purchase of a third vessel under the same terms as the earlier deal.

In February 2019 Sri Lanka Port Authority had ordered two pilot vessels for 3.12 million US dollars.

The 19 metre pilot launch is based on a design of MACDUFF of Scotland, Dockyard said. The vessels are used to transport pilots from shore to ship.

The vessels can accommodate a crew of 4 and 4 pilots.

Colombo Dockyard stock closed at 51.70 rupees down 20 cents on Wednesday.
Dockyard is a unit of Onomichi group of Japan. (Colombo/Sept18/2019

Earnings related to foreign currency plays a fairy good percentage,?
At least 70%?
With the renewd interest on port development business this will move up within next two quarters.

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A good opportunity for DOCK to turnaround

Renewd interest is reflected through share price