CHINA Everbright Water : U9E +7.14% reported a net profit of HK$632.2 million (S$109.0 million) for the first half ended Jun 30, a 22 per cent increase from HK$520.1 million in the corresponding year-ago period.

 

The Hong Kong and Singapore dual-listed environmental services group posted on Thursday (Aug 10) an increase in earnings per share for H1 to HK$0.2210 from HK$0.1818 the previous year.

 

The increase in earnings came despite an 11 per cent fall in H1 revenue to HK$3.1 billion from HK$3.5 billion, as profit margin improved by 11 percentage points to 46 per cent.  

 

The group&rsquo s direct costs and operating expenses fell 26 per cent to HK$1.7 billion from HK$2.3 billion. This was attributed to cost reduction and efficiency enhancement measures.

 

China Everbright said it reviewed and undertook 175 major cost reduction measures in H1 relating to expenses for electricity, pharmaceuticals, sludge disposal, maintenance and other operations management items, thus reducing relevant expenses significantly compared with H1 2022. 

 

The fall in gross revenue was a result of a 39 per cent decline in construction service revenue to HK$826.7 million from HK$1.4 billion. The decrease was attributed to a drop in construction activities. 

 

In contrast, operation income increased 6 per cent to HK$1.6 billion from HK$1.5 billion as new projects went into operation following the completion of their constructions. The proportion of revenue coming from operation income also increased to 50.5 per cent from 42.2 per cent in the year-ago period.

 

The group expects operation income to make up an even greater proportion of its total revenue, as the constructions of more new projects are scheduled to complete.

 

An interim dividend of HK$0.0663 per share was declared for the half-year period, up from HK$0.0545 a year earlier. 

 

The dividend will be paid out on or around Sep 8, after the Singapore books closure date of Aug 25.

 

As at Jun 30, the group&rsquo s gearing ratio stood at 60.5 per cent, slightly lower than the 61.1 per cent at the end of FY2022.

 

ENVIRONMENTAL services company China Everbright Water has issued 1.5 billion yuan (S$276.8 million) worth of five-year medium-term notes at 2.97 per cent interest.

 

The notes have a maturity period of five years, with an interest rate adjustment option to be exercised by the company and a resale option to be exercised by the noteholders at the end of the third interest-bearing year. They have a subscription rate of 2.25 times.

 

They were fully subscribed for by institutional investors in the national interbank bond market of mainland China, the company said.

 

These notes are the second tranche of notes issued by China Everbright Water, following a first tranche of 1.5 billion yuan five-year notes issued in April 2023. The first tranche of notes has an interest rate of 3.20 per cent, and a subscription rate of 2.37 times.

 

Proceeds from the notes issuance will be used to replenish the working capital of China Everbright Water&rsquo s subsidiaries and repay the interest-bearing debts of the company or its subsidiaries. This will provide &ldquo good capital security for the company&rsquo s steady development in a challenging industry and market environment&rdquo , it said.

 

Everbright Securities Company was lead underwriter and bookrunner of the issuance of this second tranche of notes.