China Water Affairs Announces FY2011/12 Annual Results

HONG KONG, June 28, 2012 /PRNewswire-Asia/ --  

Results Highlights:

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 2012 (the "Review Period").

During the Review Period, the Group recorded total revenue of HK$1,897 million, up 28% year-on-year amid strong profit growth of city water supply operation. Gross profit advanced by 32% year-on-year to HK$835 million, with gross profit margin improving 1 percentage points to 44%. Profit from operations eased 11% year-on-year to HK$675 and profit attributable to owners of the Company decreased by 25% year-on-year to HK$315 million. The decrease was mainly due to a substantial one-off disposal gain realized in FY2010/11. The board of directors recommends paying a final dividend of 3 Hong Kong cents per share. Total dividends for the Review Period were 5 Hong Kong cents per share.

"During the review period, the Group achieved robust growth in core water supply operation. Both its revenue and profit grew remarkably. Our water business experienced phenomenal growth through acquisitions, improvement in operating efficiency and tariff hikes. Revenues from water supply and sewage treatment services reached HK$1.631 billion, accounting for 86% of our total revenue. This remained our largest revenue contributor," said Mr. Duan Chuan Liang, Chairman of China Water Affairs.

The segment profit of city water supply business soared 52% year-on-year to HK$591 million, while the segment profit of sewage treatment business increased 8% year-on-year to HK$21 million. The Group raised tariffs in four cities during the Review Period and the average tariff increase was approximately 25%.

The Group maintained its strong financial position. As at 31 March 2012, total assets of the Group were approximately HK$10.679 billion, representing a substantial growth of 28% from the corresponding period in 2011. Total equity amounted to HK$5.041 billion, an increase of 16% from the end of March 2011. Net gearing ratio edged up 1 percentage point to 37% from a year ago.

Going forward, Mr. Duan Chuan Liang commented, "Despite various uncertainties facing the global economy, the Group is confident of riding out the challenges. We will leverage on our expertise and experience in the water industry to drive sustainable business development and to deliver better returns to shareholders. China is one of the countries most affected by severe water shortages in terms of water resources capacity per person. As a result, the government is working hard to improve domestic water resources management. It plans to spend RMB 2 trillion promoting the development of the domestic water industry during the Twelfth Five-year Plan period and it will introduce a number of favourable policies to support the development of this sector. We believe these measures will create a favourable environment for our growth."

About China Water Affairs Group Limited

China Water Affairs Group Limited is principally engaged in waterworks investment and operations 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 has achieved a leading position in the PRC water industry.

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

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SOURCE China Water Affairs Group Limited