CWG Profit for 1H FY2018/19 Up 20% YoY 50% Increase in Dividend Payout to Reward Shareholders
 
2018/11/29 ¤U¤È 04:15:02 CWG

Results Highlights:
(HK$ million)
For the 6 months ended 30 September
2018
2017
Change
Revenue
4,141.8
3,513.7
17.9%
Gross Profit
1,820.2
1,535.9
18.5%
Operating Profit
1,514.1
1,317.2
15.0%
EBITDA
1,748.8
1,514.4
15.5%
Profit Attributable to Owners of the Company
645.8
537.0
20.3%
Basic Earnings per Share (HK cents)
40.1
34.9
14.9%
Dividend per Share
(HK cents)
12
8
50.0%
 
(29 November 2018, Hong Kong) China Water Affairs Group Limited (¡§China Water Affairs¡¨ or the ¡§Company¡¨, stock code: 00855.HK), a leading integrated water services operator in China, announced today the FY 2018/19 interim results of the Company and its subsidiaries (the ¡§Group¡¨) for the six months ended 30 September 2018 (the ¡§Period¡¨).
 
Underpinned by steady growth in its core city water supply business and the rapid development of environmental protection operation, the Group recorded total revenue of approximately HK$4.14 billion for the Period, representing a 17.9% year-on-year growth. Profit attributable to owners of the Company amounted to approximately HK$650 million, up 20.3% from the same period last year. Meanwhile, the earnings before interests, taxes, depreciation and amortization (¡§EBITDA¡¨) were approximately HK$1.75 billion, representing a 15.5% year-on-year increase. In order to reward shareholders for their long-term support to the Group, the Board of Directors resolved to pay an interim dividend of 12 HK cents per share, representing a substantial increase of 50% year-on-year.
 
The Group has been dedicated to the core business with its development strategies producing greater results. The combined revenue from the core water supply business and environmental protection operation grew steadily by 21.5% year-on-year to more than HK$4 billion. As the core business played an increasing role in the Group¡¦s operations, it laid a solid foundation for the Group¡¦s long-term development and reinforcing its position as a leading water utility stock. The core business accounted for 96.6% of total revenue and 98.7% of total segment profit, representing a year-on-year growth of 2.9 percentage points and 2 percentage points respectively.
The Group established closer partnerships with industry leaders for the expansion of Environmental Protection business (including sewage treatment and drainage operation and construction services, solid waste and hazardous waste treatment, environmental sanitation and water environment management). Moreover, this business received capital injection from an institutional investor and the Company¡¦s management, thereby reinforcing its financial strength and further improving its operating performance. During the Period, the Environmental Protection segment generated revenue of approximately HK$830 million, representing a significant increase of 123.2% year-on-year. The segment profit was approximately HK$290 million, representing an increase of 81.0% from the same period last year.
  
The Group continued to pursue the strategy of disposing of non-core assets. During the Period, it recouped HK$417 million in cash from the reduction of equity investment in Jiangxi Xiannuhu Tourism and the disposal of its interests in Hangzhou Property Asset as well as Chongqing and Jingzhou Property Assets. The cash recouped was 59% higher than the same period of last fiscal year (HK$256 million) and will be used for the expansion of its core water business.
 
During the Period, the Group maintained a sound financial position. As at 30 September 2018, the cash on hand amounted to more than HK$4.4 billion and its total assets grew to approximately HK$32.32 billion, up 44.2% and 13.1% respectively from the end of March 2018. Although the strategic investor had paid approximately HK$430 million for its investment in the Group¡¦s environmental operation, , the amount was temporarily recorded as short-term debt at the end of the Period because the equity transfer modification registration at the administrative departments for industry and commerce had not been completed yet. If the registration were completed, it would have been recorded in the net asset account and the Group¡¦s net gearing ratio, total gearing ratio and current ratio would have been 70.2%, 63.4% and 1.12 times respectively. All of these operating indicators were within a healthy range.
 
Looking ahead, Mr. Duan Chuan Liang, Chairman of China Water Affairs, said, ¡§The Chinese economy has entered a new development mode, shifting from the one stressing rapid growth to that emphasizing high-quality development. Therefore, the government has recently released various policy documents, aiming to create a green and sustainable development model. These create valuable opportunities for the water industry. The Group will ride the market trend to fully capture opportunities arising in domestic water industry. We will adhere to the transfer-own-operate (¡§TOO¡¨) expansion model, accelerate the pace of mergers and acquisitions, and deepen the cooperation with local governments to improve our water supply service quality and standards, providing comprehensive and professional water services to our customers.¡¨
 
Mr. Duan Chuan Liang added, ¡§The Group will uphold the principle of ¡¥striving for excellence like water, being kind to the society¡¦. With more than a decade of professional management experience, we will expedite our business development through mergers and acquisitions as well as organic growth, optimize our business layout, create greater synergies, and drive the development of businesses deriving from the urban-rural water supply integration and the supply-drainage integration. Moreover, we will expand other value-added services such as secondary water supply and direct drinking water, further enhance our profitability and create new profit growth drivers, whereby substantially improving our service standards, delivering better returns to shareholders, and contributing our efforts to the reform and development of China¡¦s water industry.¡¨
 
~ 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 about 60 cities in 3 municipalities of Beijing, Tianjin and Chongqing, and in 13 provinces including Guangdong, Jiangxi, Henan, Jiangsu, Hubei, etc. With a well-established 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 issued by PRChina Limited on behalf of China Water Affairs Group Limited.
 
For investor and media enquiries
PRChina Limited
David Shiu / Charles Chan / Doris Au-Yeung
Tel: (852) 2522 1838 / (852) 2522 1368
           ckchan@prchina.com.hk
           dauyeung@prchina.com.hk

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