SINGAPORE (May 16): China Jinjiang Environment reported 1Q earnings at RMB127.4 million ($25.8 million), 6.8% higher than a year ago on better margins.
The bottomline growth comes despite a 3.6% decline in revenue to RMB557.6 million as compared to RMB578.4 million in the previous year, primarily due to lower revenue from construction services provided under build-operate-transfer (BOT) concession agreements over the quarter, as well as lower contributions from the group’s project technical and management services and energy management contracting (EMC) business.
Revenue from China Jinjiang’s dominant waste-to-energy (WTE) business segment notably grew 39.2% to RMB469.4 million over the quarter from RMB337.1 million in 1Q16, primarily due to higher waste treatment fees on the increase in the supply of municipal solid waste to the group’s WTE facilities.
Gross profit margin grew 5.1 percentage points to 42.6% in 1Q17 from 37.5% respectively.
Group earnings before interest, tax, depreciation and amortisation (EBIDTA) grew 9.2% over the quarter to RMB302.3 million from RMB276.9 million in the previous corresponding period, while earnings per share (EPS) fell 12.2% to 10.47 RMB cents.
Noting a good start to the financial year, executive chairman and CEO Wang Yuanluo says she expects to see a further boost to the group’s results upon commencement of China Jinjiang’s BOT construction projects.
“Leveraging supportive government WTE policies, we will ride on our growth strategy to raise our operational capacity and solidify our position as a leader in the WTE market in the PRC. Our status as a listed company has also reaped benefits in the acquisition of our first and second overseas WTE projects in Lucknow, India and Gwalior, India, and we intend to continue exploring more overseas opportunities within Asia as we take a step forward towards being an international WTE player,” says Wang in a press release on Monday.
Separately, the group announced it has secured its second overseas waste treatment project in Gwalior, Madhya Pradesh, India via its subsidiary in India, Ecogreen Energy Private Limited.
The Gwalior Project comprises, among others, a waste pre-treatment facility with a total designed waste pre-treatment capacity of 606 tons/day; a waste-to-energy facility; and a landfill.
The entire project is expected to commence operations in February 2020.
Under the agreement, Ecogreen Energy will construct the Gwalior Project with an exclusive right to provide waste treatment services in Gwalior, as well as operate and management the project under the BOT model for the concession period of 22 years from June 2017.
This will be done for a consideration of a tipping fee and electricity tariff payable by the relevant local authorities for the services provided and electricity generated by Ecogreen Energy, respectively, in addition to a capital grant by the relevant local authorities for the establishment of the project, following which ownership and possession of the Gwalior Project will be transferred back to the relevant local authorities at the end of the concession period.
Shares of China Jinjiang closed 2.2% lower at 89.5 cents on Monday.
