China Water Affairs Announces FY2009/10 Annual Results

    HONG KONG, July 27 /PRNewswire-Asia/ --

    Results Highlights:

    Financial Highlights
    (HKD '000)                FY2009/10       FY2008/09       Change
    Revenue                   1,398,168       1,033,199         35%
    Gross profit                586,562         320,769         83%
    Profit from operation       632,945         395,164         60%
    Net profit                  444,703         228,674         94%
    Profit attributable to
     owners of the Company      301,571         115,037        162%
    Basic earnings per share
     (HK cents)                   23.31            9.39        148%
    Final dividend per share
     (HK cents)                       5               3         67%

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 the audited annual results of the Company and its subsidiaries (the "Group") for the twelve months ended 31 March 2010 (the "Review Period").

During the Review Period, the Group achieved satisfactory business performance. Its total revenue amounted to HK$1,398 million, representing a 35% year-on-year increase. Its gross profit advanced by 83% year-on-year to HK$587 million. Gross profit margin improved 11 percentage points to 42%. Profit from operations reached HK$633 million, representing an increase of 60% year-on-year. Profit attributable to Owners of the Company advanced by 162% year-on-year to HK$302 million. Basic earnings per share were 23.31 Hong Kong cents, up 148% from the previous financial year. The board of directors recommended a final dividend of 3 Hong Kong cents per share. Total dividend per share for the year will increase by 67% year-on-year to 5 Hong Kong cents.

"The Chinese economy grew robustly during the period under review. As the country stepped up efforts in managing water resources in order to resolve the water shortage problem, the overall domestic water prices increased steadily. The Group achieved satisfactory growth in its core operation, with revenue of the city water supply business increased substantially. The city water supply operation and construction segment remained the largest revenue contributor to us. Revenue from this segment increased by 38% year-on-year to HK$908 million while profit from this segment increased by 90% to HK$271 million," said Mr. Duan Chuan Liang, Chairman of China Water Affairs.

Water tariffs were increased in five water plants during the Review Period. Moreover, water tariffs in another three water plants were raised after the Review Period. In addition, two sewage treatment plants completed construction and commenced operation in Wannian and Yanshan of Jiangxi Province respectively. The Group also acquired the entire interest in Chongqing Qiaoli Pipe Manufacturer so as to create synergies within the Group.

As at 31 March 2009, total assets of the Group were approximately HK$7,776 million, up 40% year-on-year. Net assets amounted to HK$2,550 million, an increase of 36% year-on-year. The Group forged strategic alliances with various banks and obtained credit facilities of over RMB6 billion from financial institutions such as China Everbright Bank and the China Construction Bank, thereby providing it with a solid financial position for future business expansion.

Looking ahead, Mr. Duan Chuan Liang commented, "With the sustained development of the Chinese economy and accelerating urbanization and industrialization, the government will continue the policy of integrating water supply in cities and counties so as to strengthen the management of water industry. These favorable factors are set to provide ample room of growth for our core operations such as city water supply, meter installation and other water related businesses. We will actively look for water and related projects with good potential in order to benefit from great economy of scale. Besides, we will strive hard to improve our operating efficiency and overall competitiveness, thereby creating greater value to our shareholders."

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, meter installation and related value-added businesses. Currently, the Group is undergoing rapid development, with operations being extended to over 20 cities in various provinces including Guangdong, Jiangxi, Henan and Jiangsu, etc. With a well established cooperative relationship with various local water authorities, the Group achieves 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
     David Shiu
     Tel:   +852-2522-1838
     Email: [email protected]

     PRChina
     Eric Song
     Tel:   +852-2522-1838
     Email: [email protected]

SOURCE China Water Affairs Group Limited