SGX-listed China Everbright Water has reported earnings of HK$520.1 million ($91.0) million for the 1HFY2022 ended June, down by 5% y-o-y.
Revenue, however, rose by 12% y-o-y to HK$3.48 billion, and was offset by the higher direct costs and operating expenses, which increased by 21% y-o-y to HK$2.26 billion for the period.
The higher revenue was due to an increase in construction service revenue, higher operation income, as well as higher finance income.
The larger increase of direct costs and operating expenses was due to the increase in operating costs which in turn was attributed to the soaring energy prices 1HFY2022, the rising price of commodities during the same period, as well as China’s newly issued VAT incentive policy, which has been applied to majority of the group’s subsidiaries since March.
As a result, gross profit stood 2% lower y-o-y at HK$1.22 billion. Overall gross profit margin (GPM) fell by 5 percentage points y-o-y to 35%. The decrease was due to the higher operating costs and the application of the new VAT exemption policy during the review period.
Other income and gains surged to HK$23.3 million from HK$144,000 the year before due to the higher grants from the government.
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Finance costs also increased by 21% y-o-y to HK$256.7 million mainly due to the increase of the average balance of borrowings in 1HFY2022 over the corresponding period of last year.
Profit before tax fell by 12% y-o-y to HK$691.6 million.
As at June 30, cash and cash equivalents stood at HK$3.54 billion.
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The board has declared an interim dividend of HK5.45 cents (or 0.98 cents) per share for the 1HFY2022, slightly lower than the HK5.75 cents declared in the same period the year before.
The group says it will “endeavour to drive its development” by prioritising stability and progress and firmly adhere to its philosophy of its innovation-driven development as the future remains “uncertain yet filled with opportunities”.
Shares in China Everbright Water closed flat at 28.5 cents on Aug 11.