北控水务集团(00371) - 2023 - 中期业绩

Performance Summary This section highlights key financial metrics, showing significant profit and EBITDA growth for the first half of 2023 Key Financial Highlights Profit attributable to shareholders surged 124% YoY to HK$1.557 billion, with a proposed interim dividend of HK 7.0 cents per share 2023 Interim Results Summary | Indicator | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Profit attributable to company's shareholders | HK$1,556,500,000 | HK$694,000,000 | +124% | | EBITDA | HK$5,373,800,000 | HK$3,811,800,000 | +41% | | Basic earnings per share | 15.31 HK cents | 6.64 HK cents | - | | Diluted earnings per share | 15.28 HK cents | 6.61 HK cents | - | | Proposed interim dividend | 7.0 HK cents | 7.0 HK cents | - | Consolidated Financial Statements This section presents the Group's financial performance and position, detailing revenue growth and changes in assets and liabilities Condensed Consolidated Income Statement Revenue grew 29% YoY to HK$13.73 billion, driving a 124% increase in profit attributable to the company's shareholders Key Income Statement Data (For the six months ended June 30) | Indicator | 2023 (Unaudited) | 2022 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HK$13,730,787 thousand | HK$10,645,939 thousand | +29.0% | | Gross Profit | HK$5,034,692 thousand | HK$4,607,712 thousand | +9.3% | | Profit from operations | HK$4,220,913 thousand | HK$2,866,615 thousand | +47.2% | | Profit for the period | HK$2,224,598 thousand | HK$1,408,079 thousand | +57.9% | | Profit attributable to company's shareholders | HK$1,556,538 thousand | HK$694,029 thousand | +124.3% | | Basic earnings per share | 15.31 HK cents | 6.64 HK cents | +130.6% | Condensed Consolidated Statement of Financial Position Total assets stood at HK$181.85 billion, while net current assets turned positive from a net liability position at year-end Key Statement of Financial Position Data | Indicator | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Assets | HK$181,848,521 thousand | HK$183,945,711 thousand | -1.1% | | Total Liabilities | HK$124,717,516 thousand | HK$124,482,210 thousand | +0.2% | | Total Equity | HK$57,131,005 thousand | HK$59,463,501 thousand | -3.9% | | Net current assets | HK$1,367,213 thousand | (HK$4,155,323) thousand | Turned positive | Summary of Notes to the Financial Statements The Group's principal activities include sewage treatment and water supply, with an interim dividend of HK 7.0 cents per share declared - The Group is principally engaged in sewage treatment, water supply, construction of comprehensive treatment projects, technical consulting, and environmental sanitation services across mainland China, Southeast Asia, Europe, and Oceania[8] - The Board declared an interim cash dividend of HK 7.0 cents per ordinary share, consistent with the prior year, totaling approximately HK$703 million[24] - Basic earnings per share was 15.31 HK cents, calculated based on profit attributable to shareholders of HK$1.531 billion (adjusted for perpetual capital instrument distributions) and a weighted average of approximately 9.998 billion ordinary shares[25][26][27] Management Discussion and Analysis This section provides an in-depth analysis of financial results, business operations, and the company's future strategic direction Financial Performance Analysis Revenue grew 29% to HK$13.73 billion, driven by BOT projects and the new urban resources segment, which contributed 18% of revenue Contribution of Business Segments to Profit Attributable to Shareholders (H1 2023) | Business Segment | Revenue (HK$ million) | % of Total Revenue | Profit Attributable to Shareholders (HK$ million) | % of Total Business Profit | | :--- | :--- | :--- | :--- | :--- | | Water Treatment Services | 6,326.8 | 46% | 2,720.6 | 71% | | Water Environment Treatment Construction Services | 3,667.9 | 27% | 779.1 | 21% | | Technical Services and Equipment Sales | 1,195.0 | 9% | 214.8 | 6% | | Urban Resources Services | 2,541.1 | 18% | 79.4 | 2% | | Total Business Performance | 13,730.8 | 100% | 3,793.9 | 100% | - Compared to the same period last year, revenue increased by 29%, mainly due to a 48% increase in BOT water project construction revenue and the addition of urban resources services revenue; however, overall business performance (profit attributable to shareholders) remained flat due to a 55% decrease in comprehensive treatment project construction revenue[45] Business Review The Group operated 1,447 water plants with a total daily design capacity of 43.81 million tons, with BOT project revenue recovering post-pandemic - As of June 30, 2023, the Group owned a total of 1,447 water plants and township sewage treatment facilities, with a total daily design capacity of 43,810,385 tons[46][47] - The Group has halted new investments in comprehensive water environment treatment projects, leading to a decrease in related construction revenue, which will continue to decline as existing projects are completed[59] - Construction of BOT water projects saw a 48% YoY increase in revenue to HK$3.3 billion and a 48% increase in profit attributable to shareholders to HK$426 million, as construction sites fully resumed operations post-pandemic[60] - Since June 30, 2022, the Group has consolidated the results of Beijing Enterprises Urban Resources, which contributed revenue of HK$2.541 billion and profit attributable to the Group of HK$79.4 million during the period[62] Detailed Financial Analysis The gross profit margin declined to 37% due to a revenue mix shift, while the gearing ratio rose slightly to 1.24 - The gross profit margin decreased from 43% to 37%, primarily due to a change in the revenue mix with the consolidation of the lower-margin (23%) urban resources services[65] - Net other operating expenses decreased significantly from HK$1.801 billion to HK$346 million, as the prior period included one-off items such as a HK$1.091 billion loss on the deemed disposal of an associate, Shandong Hi-speed New Energy[68] - Total receivables from contract customers, service concession arrangements, and trade receivables amounted to HK$115.96 billion, a slight decrease from the beginning of the period mainly due to RMB depreciation[75][76][77] - As of June 30, 2023, the Group's gearing ratio (net debt/total equity) was 1.24, up from 1.16 at the end of 2022, mainly due to an increase in bank and other borrowings and a decrease in total equity from RMB depreciation[88] Future Outlook The Group will advance its "New Future Water Services" plan, leveraging digitalization and innovation to become a world-class service provider - The Group has integrated sustainable development into its long-term strategy and proposed the "New Future Water Services" development plan to promote sustainability through technological and management innovation[90] - The company will enhance operational efficiency through digital systems (like SED) and upgrade its regional intensive management mechanism[92] - Responding to China's call for high-quality green development and the "Beautiful China" initiative, the Group will adhere to sustainable practices, striving towards its vision of becoming a "world-class water and environmental services provider"[93] Other Corporate Information This section covers capital structure, risk management, dividend policy, and corporate governance practices Capital, Liabilities, and Risks The Group faces RMB exchange rate risk and has pledged certain assets for borrowings, with employee numbers increasing due to consolidation - As of June 30, 2023, the Group had 72,974 employees, with staff costs increasing significantly due to the consolidation of Beijing Enterprises Urban Resources[94] - Certain Group assets, including concession rights, land and buildings, investment properties, bank balances, and trade receivables, have been pledged as security for bank and other borrowings[95][96] - As most of the Group's operations are in China with transactions denominated in RMB, it is exposed to RMB exchange rate fluctuation risk, which may affect the Group's net asset value[97] Dividends and Corporate Governance The Board declared an interim dividend of HK 7.0 cents per share and confirmed compliance with all corporate governance code provisions - The Board of Directors resolved to declare an interim cash dividend of HK 7.0 cents per share, with the record date being October 4, 2023[101][102] - The Board believes that the company has complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules during the reporting period[103] - These interim results are unaudited but have been reviewed and approved by the company's Audit Committee[105]