China CSSC Holdings Ltd, the listed arm of China's largest shipbuilder, said Saturday that its profits will likely shrink by 95 to 100 percent year-on-year in 2012 as the result of a sluggish shipping industry.

The Shanghai-based firm attributed the slump to a huge decline in newbuilding prices amid a shipping downturn.

The company's net profits hit 2.52 billion yuan ($400 million) in 2011.

China's shipping industry has been on the decline following a brief recovery in 2010, as the industry has been hit by a supply and demand imbalance and rising operating costs.