Chinese bridge builder responsible for new Johnson Street Bridge sees earnings drop, stock slide
Published May 11, 2017
The Chinese company building the lift span of Victoria’s new Johnson Street Bridge had a rough year in 2016, according to its latest annual report.
Jiangsu Zhongtai Bridge Steel Structure Co. Ltd. (ZTSS) saw its earnings drop to ¥316.98-million Chinese Yuan from ¥757.09-million the year prior (¥1 today converts to CAD $0.20). 2016 was also the first time in five years ZTSS posted earnings below ¥661-million, according to online financial statements. Losses in the last quarter of 2016 were ¥51-million against revenues of ¥64-million.
Meanwhile Jiangsu Zhongtai’s stock price has plummeted from a high of ¥34.59 in mid-2015 to ¥13.57 (as of market close, May 10) and is hovering just above two-year lows after experiencing a drop of 30% year-over-year.
Analysts say the company has faced a sharp decline in its operating margins and issues with cost control are taking their toll.
Whether Jiangsu Zhongtai’s financial situation has any bearing on Victoria’s overall bridge project remains to be seen.
Delayed by several years and tens of millions of dollars over budget, the replacement for Victoria’s Strauss-designed Johnson Street Bridge has been underway locally and at the Chinese fabrication plant for nearly half a decade.
According to City of Victoria documents, the latest phase of fabrication in China had the bridge undergo a vertical fit-up to assess the completed span’s dimensions. Pending a successful assessment, the bridge will have been disassembled and painting of select components now underway.
However, as of the publication date of this article, the City of Victoria has not posted a monthly bridge construction update since mid-March. As such, the results of the fit-up are unknown. An update is expected this week or next.
In 2014 quality control tests revealed significant deficiencies in the steel produced for the bridge which lead to a complete rejection of all fabricated materials. Since then steel quality controls have been stepped up and the bridge completion deadline pushed back to December 31, 2017.
Despite a ballooning budget that pushed the cost of the crossing and its affiliated work to $105-million from $63-million, millions of dollars in fendering (a means of protecting the bridge from collisions with vessels) have yet to be added to the final tally.
The first shipment of parts of the newly fabricated Johnson Street Bridge is scheduled to depart China as early as May 29th. A second shipment is due by the end of June. C
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