Colombo Dockyard records second consecutive profitable quarter
The Morning: Colombo Dockyard PLC continued its return to profitability during the second quarter of its 2026/27 financial year, recording its second consecutive profitable quarter and further strengthening the turnaround seen since the beginning of the current financial year.
For the three months ended 30 September 2026, profit attributable to shareholders reached Rs 164.9 million, compared with a loss of Rs 563.6 million during the corresponding quarter of the previous year. Earnings per share improved to Rs 0.42 from a restated loss per share of Rs 2.44.
The latest performance builds on the profit recorded during the first quarter ended 30 June 2026 and takes profit attributable to shareholders for the first six months of the financial year to Rs 251.2 million. This compares with a loss of Rs 1.37 billion during the corresponding six-month period last year.
The improvement reflects continued progress across several areas of the business, led by a strong performance from ship repairing, reduced losses from shipbuilding and a substantial reduction in finance costs following the Rights Issue and subsequent debt restructuring.
Group revenue for the quarter stood at Rs 7.49 billion, marginally lower than the corresponding period last year. However, improved margins and better cost performance lifted gross profit by 53.4% to Rs 1.56 billion, with the gross profit margin improving to 20.8% from 13.2%.
Ship repair remained the strongest contributor to the group’s performance. During the first six months, ship repair revenue increased by 32.4% to Rs 8.85 billion, while gross profit from the segment increased to Rs 3.28 billion from Rs 1.87 billion in the corresponding period.
The shipbuilding business also showed encouraging progress despite lower revenue during the period. Shipbuilding revenue stood at Rs 2.81 billion as recently contracted projects remain at early stages of execution. Importantly, the segment’s gross loss narrowed to Rs 838.4 million from Rs 1.31 billion a year earlier, following the completion of several legacy loss-making projects and the commencement of new projects secured more recently.
Net finance expenses for the September quarter declined by 40.7% to Rs 294.5 million. The reduction reflects the impact of the Rights Issue and the restructuring of the company’s debt profile, which has helped ease the financing burden and establish a more sustainable capital structure.
Commenting on the results, Colombo Dockyard PLC Managing Director/CEO Thimira S Godakumbura said: “The results for the second quarter are another important step in Colombo Dockyard’s recovery. We have now delivered two consecutive profitable quarters, supported by the strong performance of the ship repair business, improved margins and a significant reduction in financing costs. The completion of legacy loss-making shipbuilding projects is also allowing us to move forward with a stronger portfolio of newly contracted work. These projects are still at an early stage of execution and therefore have not yet translated into significant shipbuilding revenue, but we believe they provide a stronger foundation for the periods ahead.”
The group’s balance sheet also reflects the impact of the financial restructuring undertaken over the past year. Current assets stood at approximately Rs 33.09 billion against current liabilities of Rs 23.58 billion as at 30 September 2026, placing the group’s current ratio at approximately 1.4 times.
Cash and cash equivalents increased to Rs 17.27 billion. A substantial portion of this balance, approximately Rs 15.46 billion, comprises interest-earning deposits held under lien as security for bank guarantees and other credit facilities supporting the company’s projects.
Administrative expenses increased during the period, reflecting the broader inflationary environment and its impact on operating costs. However, improved operational margins and lower financing expenses enabled the group to maintain its positive earnings trajectory.
OSL take:
Sri Lanka’s gradually expanding maritime industry is creating significant business and investment opportunities for foreign companies/investors as the country seeks to strengthen its position as a regional shipping, logistics and maritime services hub in the Indian Ocean. The improving financial performance of Colombo Dockyard PLC reflects renewed activity in parts of the country’s maritime sector. The strong performance of its ship repair business, alongside improving prospects in shipbuilding, also highlights the potential for further investment and international partnerships. Opportunities for foreign investors extend across several segments, including port development and management, container terminal operations, shipping services, ship repair, shipbuilding, marine engineering and offshore support services. Sri Lanka’s strategic location along major international shipping routes provides an important foundation for developing transshipment, bunkering, vessel servicing and maritime logistics businesses. Continued investment in port infrastructure, cargo-handling equipment, digital port management systems and warehousing could further strengthen the country’s competitiveness. There is also considerable scope for foreign shipbuilders, marine engineering companies and technology providers to establish joint ventures with local operators, bringing in advanced technology, specialised expertise and access to international markets. Ship repair and maintenance services represent another potential growth area as regional shipping activity expands. The development of integrated logistics facilities, freight-forwarding services, cold-chain infrastructure and multimodal transport networks could create additional opportunities for international logistics companies seeking a stronger presence in South Asia. Furthermore, emerging areas such as offshore energy support, marine technology, green shipping solutions and vessel efficiency systems offer opportunities for specialised foreign investors. As Sri Lanka seeks to capitalise on its geographical advantages and expand its maritime capabilities, greater foreign participation, technology transfers and public-private partnerships could help develop a more diversified maritime economy while creating new export earnings and skilled employment.
| Article Code : | VBS/AT/20261111Z_2 |