SINGAPORE (Nov 12): China Everbright announced HKD164.3 million ($29 million) in earnings for the 3Q ended Sept, up 17% from the group’s 3Q17 earnings of HKD140.9 million a year ago due to higher revenue.

Revenue for the quarter grew 39% to HKD1 billion from HKD746.1 million a year ago, mainly attributable to higher construction and operation revenue contributions.

The growth in construction revenue was largely due to the construction of China Everbright’s sponge city project and water supply project, in addition to the expansion and upgrading of several waste water treatment plants which were under construction during the quarter under review.

Meanwhile, operational revenue growth mainly resulted from the commencement of new projects as well as tariff hikes for several projects.

Overall gross profit margin however dipped to 36% from 40% a year ago, due to a higher proportion of lower-margin construction revenue in the mix of total revenue in 3Q18 compared to a year ago.  

Administrative and other operating expenses doubled to HKD114.5 million from HKD56.8 million previously due to higher legal and professional fees; expenses from newly-acquired subsidiary Xuzhou Municipal Engineering Design Institute; higher research and development (R&D) expenses; as well as foreign exchange losses arising from the depreciation of RMB against the USD and HKD.

In all, finance costs grew to HKD76.42 million from HKD65.12 million in the previous year due to an increase in both higher average balance of borrowings and average interest rate compared to the year before.

As at end-Sept, cash and cash equivalents fell to HKD 1.72 billion from HKD2.07 billion as at end-Dec 2017.

Going forward, China Everbright says it will continue striving to enhance its core competitiveness and to take swift advantage of the opportunities arising therefrom. It also intends to focus on the comprehensive management of water environment, comprehensive utilisation of water resources and comprehensive protection of water ecology.

Year to date, shares in China Everbright are down 24% at 34 cents.