Robust Business Growth

HONG KONG, Dec. 3 /PRNewswire-Asia/ -- China Water Affairs Group Limited ("China Water Affairs" or the "Company", stock code: 00855.HK), one of the leading integrated water services operators in China, today announced unaudited interim results of the Company and its subsidiaries (the "Group") for the six months ended 30 September 2009 (the "Review Period").

    Results Highlights:
                                           For the 6 months ended 30 September
    (HKD '000)                                2009         2008     Change
    Revenue                                 670,556      385,965      74%
    Gross profit                            251,915      136,649      84%
    Profit / (Loss) from operations         340,355     (166,236)     N/A
    Net profit / (Net loss)                 271,148     (171,642)     N/A
    Basic earnings / (Loss) per share
    (HK cents)                                17.48       (15.14)     N/A
    Interim dividend per share (HK cents)         2           --      N/A

During the Review Period, the Group's operating performance was satisfactory. It achieved significant growth in its businesses, with total revenue amounting to HK$671 million, a 74% increase over the last corresponding period. Gross profit advanced 84% to HK$252 million. The gross profit margin improved 2.2 percentage points to 37.6% when compared with the same period last year. Net profit was HK$271 million. Basic earnings per share were 17.48 Hong Kong cents. The board of directors recommended an interim dividend of 2 Hong Kong cents per share.

During the Review Period, the integrated city water supply segment generated revenue of HK$353 million, up 42% over the last corresponding period. Of which, HK$244 million came from the water supply business, up 50%; while the remaining HK$109 million was from the construction and meter installation business, up 28%. Revenue from the sewage treatment segment was HK$16 million, an increase of 7% over the last corresponding period. Revenue from the infrastructure construction segment soared by 271% to HK$208 million.

As at 30 September 2009, total assets of the Group were approximately HK$5,946 million, up 23% over the last corresponding period. Net assets amounted to HK$3,167 million, an increase of 54% over the last corresponding period. Cash and bank balances totaled HK$539 million, up 4% over the last corresponding period.

"Benefiting from the government's stimulus measures, the economy of Mainland China resumed growth momentum. As a result, urbanization and industrial processes sped up. During the period under review, the performance of our core business, city water supply, was encouraging amid the steady overall growth of water supply. This segment remained our largest revenue contributor and generated stable cash flow. During the period, we took various measures to enhance operating efficiency, strove hard to raise water tariffs and exercised stringent cost control so as to improve our core competitiveness and to lay a solid foundation for sustainable growth," commented Mr. Mr. Duan Chuan Liang, Chairman of China Water Affairs.

Looking ahead, Mr. Duan Chuan Liang said, "While focusing on the development of the water business, the Group will spin off or dispose of non- core assets at opportune times in order to create more investment value for shareholders. Meanwhile, the proposed spin-off of tourism and property projects in Xiannuhu, Jiangxi Province is still progressing. With the sustained development of the Chinese economy and accelerating urbanization, the government will continue its policy of integrating the water supply in cities and counties so as to strengthen the management of the water industry. These favorable factors are set to provide ample room for growth of our core operations such as city water supply, sewage treatment and installation of water facilities. We will continue to look for water projects with good potential and to further improve the scale and efficiency of our water business. Leveraging on our existing platform, we will work hard to integrate our water supply and sewage treatment businesses and to further expand the sewage treatment operation through acquisitions. By streamlining the value chain of water business and related operations, we will continue to enhance our overall operating efficiency, service quality and competitiveness."

About China Water Affairs Group Limited

China Water Affairs Group Limited is principally engaged in waterworks investment and operation as well as other related businesses in the PRC. The Group's businesses include urban water supply, water supply systems management, sewage treatment, water ecology preservation and related value-added businesses. Currently, the Group is undergoing rapid development, with operations in over 20 cities including Guangdong, Jiangxi, Henan and Jiangsu. A well established network with the Ministry of Water Resources of the PRC and various local water authorities gives the Group a leading position in the PRC water industry.

The press release is issued by PRChina Limited on behalf of China Water Affairs Group Limited.

    For investor and media enquiries:

    PRChina
     Henry Chik
     Tel:   +852-2522-1838
     Email: hchik@prchina.com.hk

    PRChina
     David Shiu / Eric Song
     Tel:   +852-2522-1838
     Email: dshiu@prchina.com.hk
            esong@prchina.com.hk

SOURCE China Water Affairs Group Limited

Back to top