SINGAPORE (Oct 25): Mainboard-listed environmental protection solutions provider CITIC Envirotech (CEL) plunged into the red with losses of $7.2 million for the 3Q19 ended September, from earnings of $21.9 million a year ago.
Total 3Q19 revenue fell 31.0% to $164.3 million, compared to $238.2 million a year ago.
The decline was led by a sharp 61.2% drop in engineering revenue to $47.7 million, from $122.9 million a year ago.
Revenue from membrane system sales also slipped 18.3% lower to $53.5 million.
These was partially mitigated by higher treatment revenue, which rose 26.7% to $63.1 million.
In addition, the group incurred a largely unrealised net foreign exchange loss amounting to $26.0 million in 3Q19, compared to an unrealised net forex loss of $2.2 million a year ago. This was mainly from its US dollar denominated bank loans, due to the significant weakening of the Renminbi against the US dollar.
As at end-September, cash and cash equivalents stood at $520.6 million.
Looking ahead, the group says it plans to enhance the technology driven aspect of its business by leveraging its Membrane Reactor (MBR) technology, and will increase focus on developing higher margin growth segments, particularly hazardous waste projects.
“Wastewater treatment and manufacturing of membranes remain the group’s main revenue generators and stable sources of recurring income and we will continue to develop our capabilities in these areas,” says Hao Weibao, executive chairman and group CEO of CITIC Envirotech.
“Besides our proprietary MBR technology, we have also identified hazardous waste treatment, water treatment assets and circular economies as growth drivers for CEL,” he adds.
As at 2.28pm on Friday, shares in CITIC Envirotech are trading half a cent lower, or down 1.5%, at 32 cents.
