中国光大水务(01857) - 2025 - 中期业绩

Performance Summary Key financial indicators for H1 FY2025 show a slight revenue decrease but stable EBITDA and a modest increase in profit before tax Key Financial Indicators for H1 FY2025 | Indicator | H1 FY2025 | H1 FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 3,279,565,000 | HKD 3,352,595,000 | -2% | | Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) | HKD 1,194,117,000 | HKD 1,196,486,000 | -0.2% | | Profit Before Tax | HKD 832,211,000 | HKD 815,307,000 | +2% | | Profit Attributable to Equity Holders | HKD 563,760,000 | HKD 581,146,000 | -3% | | Interim Dividend | 6.09 HK cents per share | 6.09 HK cents per share | Unchanged | Consolidated Financial Statements This section presents the consolidated statements of comprehensive income, financial position, changes in equity, and cash flows for the period Consolidated Statement of Comprehensive Income In H1 FY2025, revenue slightly decreased by 2% to HKD 3.28 billion, primarily due to reduced construction services, yet gross profit rose 8% to HKD 1.37 billion due to effective cost control, resulting in a 3% decline in profit attributable to equity holders to HKD 564 million Consolidated Statement of Comprehensive Income Summary (HKD '000) | Indicator | H1 2025 | H1 2024 | Increase/Decrease | | :--- | :--- | :--- | :--- | | Revenue | 3,279,565 | 3,352,595 | (2%) | | Gross Profit | 1,369,235 | 1,269,233 | 8% | | Profit Before Tax | 832,211 | 815,307 | 2% | | Profit for the Period | 625,324 | 627,568 | (0.4%) | | Profit Attributable to Equity Holders of the Company | 563,760 | 581,146 | (3%) | | Basic and Diluted Earnings Per Share (HK cents) | 19.71 | 20.31 | (3%) | Statement of Financial Position As of June 30, 2025, total assets increased by 6.5% to HKD 38.21 billion, driven by higher contract and intangible assets, while net assets grew 5.9% to HKD 14.82 billion, reflecting an optimized debt structure with increased non-current and decreased current borrowings Statement of Financial Position Summary (HKD '000) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 27,121,929 | 25,931,236 | +4.6% | | Total Current Assets | 11,090,917 | 9,958,126 | +11.4% | | Total Assets | 38,212,846 | 35,889,362 | +6.5% | | Total Current Liabilities | 7,544,712 | 7,521,411 | +0.3% | | Total Non-Current Liabilities | 15,846,545 | 14,376,273 | +10.2% | | Total Liabilities | 23,391,257 | 21,897,684 | +6.8% | | Net Assets | 14,821,589 | 13,991,678 | +5.9% | Consolidated Statement of Changes in Equity Equity attributable to company owners increased from HKD 11.84 billion at the start of 2025 to HKD 12.62 billion by period-end, primarily driven by profit for the period and foreign currency translation gains, partially offset by declared dividends - Total equity attributable to company owners increased from HKD 11.835 billion at the beginning of 2025 to HKD 12.615 billion by the end of June[10] - The primary contributions to the equity increase were profit for the period (HKD 564 million) and foreign currency translation differences (HKD 382 million)[10] - The HKD 167 million final dividend declared for 2024 was one of the main items reducing equity[10] Consolidated Statement of Cash Flows In H1 2025, operating cash flow significantly improved to a net inflow of HKD 132 million from a net outflow, while investing activities resulted in a net outflow of HKD 174 million, and financing activities generated a net inflow of HKD 41 million, maintaining stable cash and cash equivalents at period-end Consolidated Statement of Cash Flows Summary (HKD '000) | Activity Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 131,710 | (422,256) | | Net Cash Flow from Investing Activities | (173,546) | 14,292 | | Net Cash Flow from Financing Activities | 40,889 | 382,787 | | Net Decrease in Cash and Cash Equivalents | (947) | (25,177) | | Cash and Cash Equivalents at End of Period | 1,865,021 | 1,813,216 | Notes to the Financial Statements This section details the basis of preparation, accounting policies, operating segment information, revenue breakdown, dividends, and post-reporting period events Basis of Preparation and Accounting Policies This interim financial information is prepared in accordance with IAS 34, with accounting policies consistent with the 2024 financial statements, and the adoption of revised IFRS had no significant impact on the Group's financial position - Interim financial information is prepared in accordance with International Accounting Standard 34[16] - The adoption of new and revised International Financial Reporting Standards had no significant impact on the results and financial position for the current accounting period[18] Operating Segment Information The Group operates solely in the water environment management business, with the vast majority of its revenue (99.9%) and non-current assets derived from mainland China - The Group operates in a single business segment: water environment management[21] Revenue by Geographical Region (HKD '000) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Mainland China | 3,276,626 | 3,339,163 | | Germany | 2,939 | 13,432 | | Total | 3,279,565 | 3,352,595 | Revenue Composition Total revenue was HKD 3.28 billion, with operating income from service concession arrangements growing 13.5% to HKD 1.48 billion, while construction service revenue decreased 14.1% to HKD 1.16 billion, and finance income remained stable Revenue Breakdown by Source (HKD '000) | Revenue Category | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Construction Service Revenue | 1,164,178 | 1,355,412 | -14.1% | | Operating Income | 1,476,891 | 1,301,259 | +13.5% | | Equipment Sales and Technical Service Revenue | 79,684 | 131,597 | -39.4% | | Finance Income | 558,812 | 564,327 | -1.0% | | Total | 3,279,565 | 3,352,595 | -2.2% | Dividends The Board approved an interim dividend of 6.09 HK cents per ordinary share for FY2025, consistent with the prior year, in addition to the payment of the previous fiscal year's final dividend totaling HKD 167 million - An interim dividend of 6.09 HK cents per ordinary share was declared for the first half of fiscal year 2025, consistent with the same period in 2024[33] Trade and Other Receivables Net trade receivables increased by 18.8% to HKD 6.29 billion at period-end, with a net provision for expected credit losses of HKD 73.03 million recognized, and a significant portion (HKD 2.33 billion) of receivables aged over 13 months - Net trade receivables increased from HKD 5.29 billion to HKD 6.29 billion[37] - Net provision for expected credit losses on trade receivables recognized during the period was HKD 73.03 million, a significant increase from HKD 34.72 million in the prior year period[29][38] Events After the Reporting Period Post-reporting period, Mr. Xiong Jianping was appointed as Executive Director and President, and a new Sustainability Committee was established under the Board to enhance ESG oversight - Effective July 24, 2025, Mr. Xiong Jianping was appointed as an Executive Director and President of the company[51] - On the same day, the company established a Sustainability Committee to oversee ESG matters[51] Business Review and Outlook This section provides an overview of operating performance, management's discussion and analysis of financial results, key risks, and corporate governance practices Review of Operating Results Despite a 2% revenue decrease amid a complex macro environment, the Group maintained stable operations, improving its overall gross profit margin from 38% to 42%, with new light-asset contracts totaling approximately RMB 60 million, and holding 170 environmental projects with a total investment of RMB 31.63 billion - Overall gross profit margin increased by 4 percentage points from 38% in the prior year period to 42%[53] - Light-asset business achieved new progress, with new contracts totaling approximately RMB 60 million and an additional industrial wastewater treatment design capacity of 10,000 cubic meters per day[54] - As of June 30, 2025, the Group invested in and held 170 environmental projects with a total investment of approximately RMB 31.63 billion[54] Management Discussion and Analysis This section analyzes the Group's financial performance, highlighting revenue decline due to reduced construction activities offset by increased operating income, improved gross margin from cost control, decreased finance costs, and enhanced liquidity through debt structure optimization Financial Review Revenue decreased by 2% to HKD 3.28 billion due to a 14% drop in construction services, while operating income grew 13% from new projects and tariff adjustments, leading to a 4-percentage-point increase in overall gross margin to 42% due to cost control, with administrative expenses rising from exchange losses and income tax expenses increasing by 10% - Construction service revenue decreased by 14% to HKD 1.164 billion due to reduced construction activities[66] - Operating income increased by 13% to HKD 1.477 billion due to the commissioning of new projects and water tariff adjustments[66] - Overall gross profit margin increased by 4 percentage points to 42%, primarily due to cost control and a higher proportion of operating service revenue[68] Financial Position Analysis Total assets increased to HKD 38.21 billion, with a stable asset-liability ratio of 61.2% and net assets per share rising to HKD 4.41, while contract and intangible assets grew from new projects, trade receivables increased to HKD 6.29 billion due to seasonal payments and slower government payments, and net current assets significantly improved with the current ratio rising from 1.32 to 1.47 - The asset-liability ratio was 61.2%, a slight increase of 0.2 percentage points from 61.0% at the beginning of the year[75] - Trade receivables increased by HKD 993 million, primarily due to customers' seasonal payment patterns and slower payments from local governments[77] - Net current assets increased by HKD 1.109 billion, and the current ratio improved from 1.32 to 1.47, mainly due to the issuance of medium-to-long-term notes to replace short-term borrowings[79] Key Risks and Uncertainties The Group identified eight key risks, including policy changes, market competition, environmental and safety production, trade receivables collection (especially from local governments), project management, human resources, financing, and cost control, with trade receivables collection being a top priority managed by a dedicated task force - Key risks include policy changes, market competition, environmental compliance, trade receivables collection, project management, human resources, financing, and cost control[101][103][105][106] - Trade receivables collection risk is highly prioritized, as key clients are local governments whose fiscal payment capabilities may decline; the company has established a task force led by the President and implemented a 'task force, ledger, incentive, and assessment' mechanism to address this[106][107] Corporate Governance The company adheres to corporate governance codes in Singapore and Hong Kong, with the Board overseeing five committees including a newly established Sustainability Committee, and all directors confirmed compliance with strict internal codes for securities dealings during the period - The company's corporate governance practices comply with the corporate governance codes of Singapore and Hong Kong[116] - The Board has five committees: Audit, Remuneration, Nomination, Strategy, and Sustainability[117]