China State Shipbuilding Co Ltd (CSSC), one of the largest shipbuilders in the country, said?Tuesday that its net profit in 2008 increased by 48.6 percent year-on-year to 4.16 billion yuan.

The company's revenue increased by 48 percent to 27.66 billion yuan, of which 21.44 billion yuan was from shipbuilding, 3.02 billion yuan from diesel engines and 2.63 billion yuan from ship repair, the Shanghai-listed company said in its annual financial report.

The company results come at a time when the shipbuilding industry is facing tough challenges arising from the sharp downturn in global trade. Dwindling cargo business has forced many shipping companies to delay deliveries of new ships. Some have gone even further by canceling previous orders.

Chinese shipbuilders took the hit harder than their counterparts in other countries, mainly South Korea, since they specialize in the building of low-tech vessels such as bulk carriers, which face the biggest cuts in hard times.

But the huge orders the CSSC got during the boom times in past years have enabled it to weather the slump better than many of its competitors, analysts said.

"CSSC won plenty of orders several years ago," said Zhang Zhongjie, an analyst with SinoLink Securities. This has obviously helped shield it from the business downturn, he said.

In its latest report, CSSC said China's shipbuilding industry grew rapidly before the third quarter of 2008. However, new orders declined sharply in the fourth quarter, which brought huge pressure to the industry.

CSSC said new shipbuilding orders is likely to slow during the first half of this year because of the slack shipping industry and financing difficulties. Order cancellations will however cool the overheated industry and help it to develop rationally, it said.

The company plans to realize revenue of 29.51 billion yuan this year, including building 44 ships totaling 5.89 million dead weight tons worth 23.6 billion yuan, 85 sets of diesel engines totaling 1.08 million kw worth 2.65 billion yuan and repairing 150 ships worth 2.2 billion yuan.

(China Daily April 1, 2009)