Stronger ship repair performance, improved cost efficiencies and lower finance expenses drive first positive quarter following an extended loss-making period

Colombo Dockyard PLC (CSE: DOCK) has recorded a significant financial turnaround for the three months ended 30 June 2026, returning to quarterly profitability following an extended period of losses.

The achievement comes as Colombo Dockyard prepares to mark its 52nd anniversary on 1 August 2026, providing a significant milestone in the company’s ongoing transformation and renewed strategic direction following its collaboration with parent company Mazagon Dock Shipbuilders Limited.

The Group recorded a profit after tax of Rs. 80.2 million for the quarter, reversing the Rs. 813.4 million loss reported during the corresponding period of 2025. Profit attributable to the owners of the company amounted to Rs. 86.3 million, while earnings per share improved to Rs. 0.22 from a restated loss per share of Rs. 3.51 during the corresponding period of the previous year.

Despite Group revenue declining by 6.8% to Rs. 5.84 billion during the quarter, improved cost efficiencies supported a substantial increase in profitability. Cost of sales declined by 21.8% to Rs. 4.63 billion, enabling gross profit to increase by 250.7% to Rs. 1.21 billion. The Group’s gross profit margin consequently improved to approximately 20.7%, compared with 5.5% during the corresponding period of the previous year.

Net finance expenses also declined by 63.8% to Rs. 188.2 million, compared with Rs. 520 million in the corresponding quarter, reflecting the benefits of the company’s strengthened financial position and reduced financing burden.

Ship repairing emerged as the principal contributor to the improved performance. Revenue from the segment increased by 48.4% to Rs. 3.95 billion, from Rs. 2.66 billion in the corresponding quarter. The segment result at gross profit level more than doubled to Rs. 1.46 billion, compared with Rs. 727 million previously.

While the shipbuilding segment continued to face challenging market and project conditions, its loss at gross profit level narrowed considerably to Rs. 378.8 million, from Rs. 899.6 million in the corresponding period. This improvement helped reduce the impact of the decline in shipbuilding revenue during the quarter.

Commenting on the performance, Thimira S. Godakumbura, Managing Director/CEO of Colombo Dockyard PLC, said, “Returning to quarterly profitability as we mark 52 years of operations represents an important milestone for Colombo Dockyard. The result reflects the commitment of our employees, the strengthening of our ship repair operations, disciplined cost management and the reduction of our financing burden. It also demonstrates the early progress being made through our strategic collaboration with Mazagon Dock Shipbuilders Limited.”

“While we recognise that further work remains, particularly in strengthening our shipbuilding portfolio and improving working capital efficiency, this performance provides greater confidence in the direction of the company. Our focus will remain on building a more resilient, competitive and financially sustainable Colombo Dockyard.”

The company also strengthened its balance sheet during the period. Total Group equity stood at Rs. 15.59 billion as at 30 June 2026, compared with Rs. 4.07 billion as at 30^th June 2025, while stated capital increased to Rs. 13.65 billion. Total assets amounted to Rs. 42.58 billion, with cash and cash equivalents reaching Rs. 8.48 billion.

Mazagon Dock Shipbuilders Limited presently holds a 51% shareholding in Colombo Dockyard. The company has also aligned its financial year with its parent company, with the current reporting year commencing on 1 April 2026. Accordingly, the results for the three months ended 30 June represent the first quarter under the revised reporting cycle.

As Colombo Dockyard marks 52 years, the company will continue to prioritise operational excellence, stronger project execution, financial discipline and greater collaboration with Mazagon Dock Shipbuilders Limited. These priorities are expected to support Colombo Dockyard’s long-term competitiveness and reinforce its contribution to Sri Lanka’s maritime and heavy engineering sectors.

Image Caption : Colombo Dockyard PLC Managing Director/CEO Thimira S. Godakumbura