Strong ship repair performance, narrowing shipbuilding losses and lower finance costs drive continued recovery
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 repairing 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, Thimira S. Godakumbura, Managing Director/CEO of Colombo Dockyard PLC, 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 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.
Debt restructuring has also changed the maturity profile of the Group's borrowings, with a greater proportion moved from short-term to longer-term facilities. This has helped strengthen the Group's liquidity position and provide greater financial flexibility for ongoing operations and new 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.
With two consecutive profitable quarters now recorded, Colombo Dockyard remains focused on maintaining the momentum of its ship repair operations, improving the performance of shipbuilding projects and strengthening financial discipline as it works towards sustained long-term profitability.
