Euro Tech Holdings Company Limited Reports 2010 Year-End Results

HONG KONG, June 28, 2011 /PRNewswire-Asia/ -- Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported financial results for the 12-month period ended December 31, 2010 ("Fiscal 2010").

The Company's revenues for Fiscal 2010 were approximately $22,305,000, an approximate 18% decrease compared to approximately $27,336,000 in the Company's fiscal year ended December 31, 2009 ("Fiscal 2009"). The net loss for Fiscal 2010 was approximately $1,087,000, as compared to net income of approximately $32,000 for Fiscal 2009.

The decrease of the company's revenues is mainly due to most foreign suppliers want to market and sell their products directly or through many distributors in China instead of using the Company as their sole distributor as in the past and Guangxi wastewater treatment contract in the face amount of US$3.2 Million, was delayed due to a serious fatal traffic accident in September 2010.

The falling net income is mainly due to the decrease in gross profit resulting from the decline in total revenues as the effect of further declines in revenue from trading activities and delays in completion of some engineering projects due in part to the fatal traffic accident. The increases in selling and administrative expenses for engineering activities, the 3.3% rate of inflation in the PRC and the need to grant reasonable salary increases to retain qualified employees are also the reasons.

Mr. T.C. Leung, Chairman and CEO of the company commented, "In the past few years, we relied on the incomes from engineering contracts, and contributions from affiliates to offset the loss of trading activities of third party products but this time they could not do the same job in 2010. This is because in 2010, our engineering company made quite a big loss, our subsidiary company, Pact, made fewer profits than previous years due to delays of some engineering contracts, even though our affiliate company, Blue Sky, made a sterling performance.

"The big setback in 2010 has prompted us to rethink about our short and mid term plans and amend strategies amid serious streamlining of most affected operations.

"In view of the change of business environment, we have come to the conclusion that as non exclusive distributors, it would be extremely difficult to be economical and successful for us to market third party products and cover all areas in China. Since early 2011, with the exception of our own manufactured products, we have been concentrating our efforts mainly on Pearl River Delta, especially Macau and Hong Kong where we can give customers supports without too many overheads, traveling and other expenses.

"As for engineering, apart from what we are doing the water and wastewater treatment business in China, we have been working on a design of a Ballast Water Treatment System ("BWTS") for the worldwide maritime industry since mid 2010. Ballast water treatment is an imminent requirement by The International Maritime Organization ("IMO") to prevent the biological unbalance caused by the estimated 12 billion tons of ballast water transported across the seas by ocean-going ships when their ballast water tanks are emptied or refilled. The market potential for retrofits and new installations in these old and new ocean-going ships is enormous.

"Under Pact, we are starting to build a Ballast Water Treatment System and working on the preparation for the land and sea certification tests in America. Pact is thinking either to do all these on its own or may seek strategic partners to invest in this project. The latter will definitely take a much shorter time to launch the BWTS into the market. In either case; Pact expects to get the relevant certifications in mid 2012, and becomes one of the few companies in China that has these certifications.

"The management is upbeat about the amendment of strategies, especially the venture into the Ballast Water Treatment business. This will not only boost the image of the company worldwide, but also generate substantial incomes based on repeated orders from retrofits and new installations in future."

About Pact:

Pact Environmental Technology Co. Ltd., ("Pact"), based in Shanghai, is a global provider of environmental solutions for industrial and municipal clients, focusing on water and wastewater treatment. Pact's capabilities cover design, manufacturing, sourcing, installation and servicing of water/wastewater treatment, water desalination plants and equipment.

About Blue Sky

Zhejiang Tianlan Environmental Protection Technology Co. Ltd., ("Blue Sky"), found in 2000, is a fast growing company which provides a comprehensive service for design, general contract, equipment manufacturing, installation, testing and operation management of the treatment of waste gases emitted from various boilers and industrial furnaces of power plants, steel works and chemical plants.

Certain statements in this news release regarding the Company's expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company's offices and operations situated in Hong Kong and China, doing business in China, competing with Chinese manufactured products, competing with the Company's own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the "Risk Factor" discussions in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2010.

SOURCE Euro Tech (Far East) Limited