Economic Performance - In 2022, China's GDP was RMB 121.0 trillion, reflecting a 3.0% increase compared to the previous year[17]. - For the year ended December 31, 2022, ELL Environmental recorded a revenue of approximately HK$203.6 million, representing a year-on-year increase of 97.5%[29]. - Total revenue increased by HK$100.5 million or 97.5% to HK$203.6 million for FY2022 compared to HK$103.1 million for FY2021, primarily due to construction revenue from the Bangka Project and increased biofuel sales in Indonesia[55][59]. - Profit before tax decreased by HK$8.9 million or 38.7% to HK$14.0 million for FY2022, primarily due to increased costs and lower profit margins[66][72]. - Loss attributable to owners of the Company was HK$3.3 million for FY2022, a decrease of HK$9.4 million or 153.6% from a profit of HK$6.1 million in FY2021[68][74]. Environmental Initiatives - The proportion of national surface water assessment sections with excellent water quality (Grade I-III) reached 86.3%, an increase of 4.5% from the previous year[17]. - The company aims to leverage the organized recovery of China's economy to enhance its market position in the environmental protection industry[17]. - The government remains committed to addressing environmental issues, including wastewater management, despite economic challenges[17]. - Future strategies include the development of new technologies and products to improve service offerings in wastewater treatment[17]. - The Group plans to explore more environmental protection business opportunities and research new energy developments in the environmental protection industry[28]. Water Quality Targets - By the end of 2025, the Yangtze River's water quality is targeted to be maintained at an excellent level, with a centralized collection rate of urban domestic sewage exceeding 70%[23]. - The Yellow River's water quality in the upper and middle reaches is expected to reach Grade II by 2025, with over 90% of black and odorous water bodies in county-level cities eliminated[23]. - The Chinese government has set targets for the Yangtze River, aiming to maintain water quality at Grade II and improve urban sewage collection rates to over 70% by the end of 2025[39][42]. Financial Management - The Group aims to enhance operational efficiency by strictly controlling costs and improving operational processes to boost profitability in the wastewater treatment business[28]. - The Group has increased water tariffs from RMB 2.67 per tonne to RMB 3.43 per tonne, which is expected to enhance revenue and gross profit[48]. - Total cost of sales rose by HK$93.6 million or 189.1% from HK$49.5 million for FY2021 to HK$143.1 million for FY2022, mainly due to increased construction costs from the Bangka Project and higher biofuel costs in Indonesia[56][60]. - The Group's administrative expenses increased by HK$3.0 million or 10.9% to HK$30.5 million for FY2022, primarily due to staff costs and other operating expenses[64][70]. Operational Developments - The Group is focusing on two overseas projects: the biofuel pellet business in Jambi, Indonesia, which has been generating revenue since 2021, and a power supply project in Bangka, Indonesia, with a fixed price electricity supply agreement for 25 years starting in 2023[27]. - The Bangka Project in Indonesia is under construction and is expected to supply power to the national grid at a fixed price for 25 years starting in 2023[49]. - The biofuel pellet business in Indonesia began wood pellet production in 2021 and is generating revenue, contributing to the Group's diversification strategy[50]. - The Group is actively developing suitable environmental projects overseas, focusing on the Bangka Project, which is in the construction phase and has a 25-year power supply agreement with the Indonesian government[52]. Sustainability and ESG Practices - The Group aims to create a better, greener, and more equitable society through its Environmental, Social, and Governance (ESG) policies[164]. - The Group's commitment to sustainable operations includes protecting employees' rights and ensuring occupational health and safety[165]. - The Group has established a supplier selection process that considers environmental and social performance[160]. - The Group identified 27 ESG issues based on stakeholder communication, listing requirements, and industry sustainability trends[153]. - The Group's ESG report aims to provide an unbiased picture of its performance, avoiding selections or omissions that could mislead readers[150]. Wastewater Treatment Operations - The wastewater treatment facilities have a daily treatment capacity of 80,000 cubic meters, with a total of 13,506,632 cubic meters treated in 2022[127]. - The Group operates two wastewater treatment facilities in Jiangsu Province, China, utilizing Moving Bed Biofilm Reactor (MBBR) technology[129]. - Regular inspections are conducted to ensure the quality of treated wastewater before discharge, supporting environmental protection and sustainability[133]. - The wastewater treatment facilities adhere to local standards, ensuring treated wastewater meets the Integrated Wastewater Discharge Standard and Class 1-A or Class 1-B Discharge Standard of Pollutants for Municipal Wastewater Treatment Plants (GB18918-2002)[133]. Emissions and Resource Management - Total GHG emissions decreased from 8,860.76 tonnes of CO2e in 2021 to 5,236.24 tonnes of CO2e in 2022, representing a reduction of approximately 41.5%[194]. - Total energy consumption decreased from 11,120.86 MWh in 2021 to 7,903.96 MWh in 2022, a reduction of approximately 29.8%[196]. - The company aims to reduce the intensity of scope 1 and 2 greenhouse gas emissions as part of its climate change strategy[190]. - The company has implemented measures to minimize noise emissions from operations, including purchasing low-noise equipment and conducting regular inspections[183].
强泰环保(01395) - 2022 - 年度财报