FY2017/18 Interim Results Announcement
Net Profit Grows Strongly by 27.6% Y-O-Y City Water Supply Business Maintains Steady Growth
2017/11/30 ¤U¤È 02:13:16 tatyi

Results Highlights:
 
 
For the 6 months ended 30 September
(HKD million)
2017
2016
Change
Revenue
3,513.7
3,020.0
16.3%
Gross Profit
1,535.9
1,246.5
23.2%
Gross Profit Margin (%)
43.7%
41.3%
2.4 p.p.
Recurring Operating Profit*
1,343.5
955.0
40.7%
Recurring EBITDA*
1,540.7
1,144.3
34.6%
Net profit for the period
857.6
672.0
27.6%
Profit attributable to shareholders
537.0
429.1
25.2%
Basic Earnings per share (HK cents)
34.9
28.4
22.9%
Dividend per share (HK cents)
8
4
100%
 
* (Excluding fair value gain on investment properties, change in fair value of derivative financial assets)
 
(30 November 2017, Hong Kong) China Water Affairs Group Limited (¡§China Water Affairs¡¨ or the ¡§Company¡¨, stock code: 0855.HK), a leading integrated water services operator in China, announced today the FY2017/18 interim results of the Company and its subsidiaries (the ¡§Group¡¨) for the six months ended 30 September 2017 (the ¡§Period¡¨).
 
During the period under review, the Group recorded a revenue of HK$3,513.7 million, representing an increase of 16.3%. The Group¡¦s gross profit increased by 23.2% to HK$1,535.9 million, reflecting the Group¡¦s strong profitability in core business. The gross profit margin is 43.7%, reflecting an increase of 2.4 percentage point. The net profit increased by 27.6% to HK$857.6 million. Profit attributable to shareholders increased by 25.2% to HK$537.0 million. The recurring operating profit amounted to HK$1,343.5 million, representing a significant increase of 40.7%. The recurring EBITDA amounted to HK$1,540.7 million, representing a significant increase of 34.6%.
 
During the period under review, the Group¡¦s water segment (water supply and waste water treatment) recorded significant growth. The water business segment revenue reached HK$3,294.2 million, representing an increase of 13.9%, and representing around 93.8% of the total revenue. The segment profit from water business arise to around HK$1,288.9 million, representing a significant increase of 29.3% as compared with the last corresponding period. Benefiting from the encouragement policies of the central government and the integration of urban and rural water supply, the Group's water supply connection income has made great strides during the performance period¡Awhich representing an increase of 26.7% to HK$551.3 million. The revenue of sewage treatment significantly increased by 50.9% to HK$374.0 million. The corresponding profit significantly increased by 104.6% to HK$163.0 million.
 
The Group maintained a sound financial position. As of 30 September 2017, the gearing ratio is 63.1%. The Group¡¦s total equity amounted to HK$9,926.6 million, an increase of 10.8% from the end of March 2017. The shareholder¡¦s equity accounts for HK$6,285 million, which representing an increase of 11.9%. In order to express the Group¡¦s gratitude for the long-term support from shareholders, the Group decided to pay an interim dividend of 8 Hong Kong cents per ordinary share for this half financial year, representing a significant increase of 100%. Starting from this financial year, the Board of Directors decided to increase its dividend payout ratio to not less than 30%, subject to the financial performance and future funding needs of the Group.
 
For the prospects, during the period of the ¡§Thirteenth Five Year Plans¡¨, the central government has established specific plans for the urban-rural integrated water supply projects. It aimed to intensify the reform for market-oriented water rights and water price, and optimise the formation mechanism of water price and integrated management of water resources. It is expected that a market-oriented pricing mechanism of water price shall drive the diversification of investment entities in water industry and market-orientation of capital operation, as well as accelerating urban-rural integrated construction, co-ordination of regional water supply and integration of areas of water resources, specifically, the increasing demand from governments at various levels the investment and construction of professionalised green water infrastructures and fine operation and services, which provide huge opportunities for the water industry.
 
Mr. Duan Chuan Liang, the Chairman of the Company, said: ¡§Looking ahead the Group will fully grasp the opportunities of the industry. We will uphold our business vision of "The best virtue is like water, Kindness to society", develop in a sustainable way while striving for steady progress, make the best use of the base and advantages of Group's existing operation in various cities as well as our internal financial resources, so as to develop the urban integrated projects and supply-drainage integrated projects, deepen geographical expansion, accelerate the development of our core business via merger and acquisition, continuously enhance our internal management, improve the Group's core competitiveness, provide quality services to the public, as well as maximising returns for our shareholders.¡¨ 
 
- End -
 
 
About China Water Affairs Group Limited
 
China Water Affairs Group Limited is principally engaged in city water supply, sewage treatment and drainage, and related value-added businesses in the PRC.  Currently, the Group¡¦s businesses cover over 50 cities in 3 municipalities of Beijing, Tianjin and Chongqing, and in 13 provinces including Guangdong, Jiangxi, Henan, Jiangsu, Hubei, etc. With a well-established long term cooperative relationship with various local government authorities, the Group has positioned itself in a leading position in China¡¦s water industry.
 
This press release is distributed by Wonderful Sky Financial Group Company Limited for China Water Affairs Group Limited.
 
For further information, please contact:
 
Wonderful Sky Financial Group Limited
Jacqueline Wong / Mandy Liu / Sabrina Chiu
Tel      :  (852) 3970 2177/ (852) 3641 1310 / (852) 3970 2187
E-mail  :  po@wsfg.hk / chinawater@wsfg.hk

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