Euro Tech Holdings Company Limited Reports Interim Results For The Six Months Ended June 30, 2016
HONG KONG, Dec. 13, 2016 /PRNewswire/ -- Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported its unaudited financial results for the six months ended June 30, 2016.
The Company's revenues for the six months ended June 30, 2016 ("1H 2016") were approximately US$10,469,000, a 26.5% increase as compared to approximately US$8,273,000 for the six months ended June 30, 2015 ("1H 2015"). This increase was due to the increase in revenues from trading activities and engineering activities of approximately US$1,367,000 and US$829,000, respectively.
Gross profits increased by 3.9% to approximately US$1,929,000 for 1H 2016 as compared to approximately US$1,857,000 for 1H 2015. The increase was due to the increase in the Company's revenue even though the gross profit margin % is lower because of keen competition under poor economic conditions.
Selling and administrative expenses decreased by approximately US$189,000 to US$2,814,000 for 1H 2016 as compared to approximately US$3,003,000 for 1H 2015. The decrease was primarily due to the decrease of approximately US$111,000 in development costs of Ballast Water Treatment Systems ("BWTS") to approximately US$252,000 for 1H 2016 as compared to approximately US$363,000 for 1H 2015, and decrease in general overheads resulting from actions to trim overheads.
The profit contribution from the affiliates increased by approximately US$206,000 to profit contribution of US$68,000 for 1H 2016 as compared to negative contribution of approximately US$138,000 for 1H 2015.
The net loss decreased by US$178,000 to approximately US$484,000 for 1H 2016, as compared to approximately US$662,000 for 1H 2015. This was primarily due to increase in revenue, decrease in selling and administrative expenses, and profit contribution from the affiliates, despite the decrease in other income due to exchange loss arising from devaluation of Chinese Renminbi.
The company obtained type approval certificate from China's Classification Society ("CCS") for its 200, 300, 500, 750, 1200 and 1250 Cubic Meters per hour BWTS in May 2016. Alternate Management Systems ('AMS") acceptance for its full range BWTS was obtained in October 2016.
In September 2016, the International Maritime Organization had received acceptance from 52 States, representing 35.1441% of world merchant shipping tonnage. The Ballast Water Management Convention will enter into force 12 months after this ratification, i.e. September 8, 2017. The Company has since received a number of enquiries for its BWTS from China, Hong Kong, Russia, India and other Southeast Asian countries, despite worldwide recession in shipping industries.
About BWTS
BWTS are 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 vessels when their ballast water tanks are emptied or refilled. In 2012, ballast water discharge standard became a law in the US. Any vessel constructed in December 2013 or later will need to comply when entering US waters, and existing vessels will follow shortly after. IMO requires that the Ballast Water Management Convention will enter into force on September 8, 2017 after ratification by 52 States, representing 35.1441% of world merchant shipping tonnage. The market potential for retrofits and new installations of BWTS in these old and new ocean-going vessels is enormous.
About AMS
AMS acceptance by the U.S. Coast Guard is a temporary designation given to BWTS approved by a foreign administration. It enables BWTS to be used on vessels for a period of up to 5 years, while the treatment system undergoes approval testing to U.S. Coast Guard standards.
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 mainland 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, 2015.
| EURO TECH HOLDINGS COMPANY LIMITED CONSOLIDATED BALANCE SHEETS |
||||
| As of June 30, 2016 (Unaudited) |
As of (Audited) |
|||
| US$'000 |
US$'000 |
|||
| Assets |
||||
| Current assets: |
||||
| Cash and cash equivalents |
2,809 |
2,480 |
||
| Restricted cash |
242 |
475 |
||
| Accounts receivable, net |
3,176 |
4,500 |
||
| Prepayments and other current assets |
990 |
500 |
||
| Inventories |
426 |
557 |
||
| Total current assets |
7,643 |
8,512 |
||
| Property, plant and equipment, net |
756 |
773 |
||
| Investments in affiliates |
10,532 |
10,712 |
||
| Goodwill |
1,071 |
1,071 |
||
| Deferred tax assets |
178 |
202 |
||
| Total assets |
20,180 |
21,270 |
||
| Liabilities and shareholders' equity |
||||
| Current liabilities: |
||||
| Accounts payable |
3,042 |
3,054 |
||
| Other payables and accrued expenses |
1,379 |
1,626 |
||
| Taxation payable |
133 |
134 |
||
| Total current liabilities |
4,554 |
4,814 |
||
| Commitments and contingencies |
- |
- |
||
|
Shareholders' equity: |
||||
| Ordinary share, 20,000,000 (As of December 31, |
123 |
123 |
||
| Additional paid-in capital |
9,551 |
9,551 |
||
| Treasury stock, 167,700 (As of December 31, |
(786) |
(786) |
||
| PRC statutory reserve |
315 |
315 |
||
| Accumulated other comprehensive income |
810 |
799 |
||
| Retained earnings |
4,660 |
5,144 |
||
| Equity attributable to owners of Euro Tech |
14,673 |
15,146 |
||
| Non-controlling interest |
953 |
1,310 |
||
| Total shareholders' equity |
15,626 |
16,456 |
||
| Total liabilities and shareholders' equity |
20,180 |
21,270 |
|
EURO TECH HOLDINGS COMPANY LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015 |
|||||
| 2016 (Unaudited) |
2015 (Unaudited) |
||||
| US$'000 |
US$'000 |
||||
| Revenues |
|||||
| Trading and manufacturing |
8,034 |
6,667 |
|||
| Engineering |
2,435 |
1,606 |
|||
| Total revenues |
10,469 |
8,273 |
|||
| Cost of revenues |
|||||
| Trading and manufacturing |
(6,689) |
(5,381) |
|||
| Engineering |
(1,851) |
(1,035) |
|||
| Total cost of revenues |
(8,540) |
(6,416) |
|||
| Gross profit |
1,929 |
1,857 |
|||
| Finance costs |
(8) |
- |
|||
| Selling and administrative expenses |
(2,814) |
(3,003) |
|||
| Operating loss |
(893) |
(1,146) |
|||
| Interest income |
13 |
5 |
|||
| Other income, net |
(1) |
50 |
|||
| Loss before income taxes and equity in profit of affiliates |
(881) |
(1,091) |
|||
| Income taxes |
(24) |
318 |
|||
|
Equity in profit of affiliates |
68 |
(138) |
|||
| Net loss |
(837) |
(911) |
|||
| Less: net loss attributable to non-controlling interest |
353 |
249 |
|||
| Net loss attributable to the Company |
(484) |
(662) |
|||
| Other comprehensive loss |
|||||
| Net loss |
(837) |
(911) |
|||
| Foreign exchange translation Adjustments |
7 |
(1) |
|||
| Comprehensive loss |
(830) |
(912) |
|||
| Less: Comprehensive loss attributable to non-controlling interest |
357 |
249 |
|||
| Comprehensive loss attributable to the Company |
(473) |
(663) |
|||
| Net loss per ordinary share |
|||||
| - Basic |
US($0.23) |
US($0.32) |
|||
| - Diluted |
US($0.23) |
US($0.32) |
|||
| Weighted average number of ordinary shares outstanding |
|||||
| - Basic |
2,061,909 |
2,062,409 |
|||
| - Diluted |
2,061,909 |
2,062,409 |
|||
SOURCE Euro Tech Holdings Company Limited
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