Euro Tech Holdings Company Limited Reports Interim Results for the Six Months Ended June 30, 2012
HONG KONG, Dec. 27, 2012 /PRNewswire/ — Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported its unaudited financial results for the six months ended June 30, 2012.
The Company’s revenues for the six months ended June 30, 2012 (“1H 2012″) were approximately US$8,963,000, a 6.2% decrease as compared to approximately US$9,554,000 for the six months ended June 30, 2011 (“1H 2011″). This drop was primarily attributable to the unfavorable economic conditions caused by the ongoing European debt crisis and slowdown in China’s economic growth.
Gross profits increased by 11.4% to approximately US$2,648,000 for 1H 2012 as compared to approximately US$2,378,000 for 1H 2011 even though the total revenues dropped. The increase was mainly contributed by the improvement in pricing and cost control.
Selling and administrative expenses were approximately US$2,813,000 for 1H 2012 as compared to approximately US$2,794,000 (which was after offsetting gain on disposal of a property of approximately US$328,000) for 1H 2011. Hence, the recurring selling and administrative expenses for 1H 2012 decreased by approximately US$309,000 as compared to 1H 2011. The decrease was primarily due to reduction of operating expenses, despite the increase of development costs of approximately US$200,000 for Ballast Water Treatment Systems (“BWTS”).
The net loss for 1H 2012 was approximately US$120,000, as compared to net income of approximately US$12,000 for 1H 2011. If the overheads spent in developing the BWTS were excluded, there would be a small net income for 1H 2012. The net income for 1H 2011 was primarily contributed by the non-recurrent gain on disposal of a property.
The Company expects its business to rebound in 2013 especially in the second half of 2013 when its BWTS are available for sales and shipments. For the past two and half years, the Company has been investing a lot of resources in developing its BWTS for the global market amid the worldwide economy slowdown and the hardship of continuous shrinkage of its distribution business of third party products. The Company expects the new BWTS business to not only offset its shrinking distribution business but also earn significant incomes for coming years.
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 ships when their ballast water tanks are emptied or refilled. The market potential for retrofits and new installations of BWTS in these old and new ocean-going ships is enormous.
After passing the land base test, the Company has recently started marketing its BWTS while it is getting all other approvals before mid 2013. So far a few shipping companies have shown great interest in its systems for their new ships which are being built in China. The price for each basic system is around US$100,000. As each existing or new built ocean going ship needs one or more or bigger systems according to the size of the ship, the Company is very pleased and positive about the big business potential both inside and outside of China.
The Company will focus more on wastewater engineering projects outside of China as there are keener competitions from local contractors in China. On the other hand, outside of China, the Company remains competitive and cooperates successfully with large international engineering firms to win contracts.
The Company is continuously streamlining and restructuring its operations to cope with these two businesses.
According to the latest list of potential initial public offering candidates for the Growth Enterprise Market in China, Blue Sky’s application is still under review.
About Blue Sky
Zhejiang Tianlan Environmental Protection Technology Co. Ltd., (“Blue Sky”), found in 2000, is a fast growing company which provides a comprehensive service for design, general contract, equipment manufacturing, installation, testing and operation management of the treatment of waste gases emitted from various boilers and industrial furnaces of power plants, steel works and chemical plants.
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 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, 2011.
EURO TECH HOLDINGS COMPANY LIMITED CONSOLIDATED BALANCE SHEETS As of As of June 30, December 31, 2012 2011 (Unaudited) (Audited) US$'000 US$'000 Assets Current assets: Cash and cash equivalents 6,029 5,339 Restricted cash 888 246 Accounts receivable, net 2,752 3,744 Prepayments and other current assets 2,683 1,773 Inventories 655 583 --- --- Total current assets 13,007 11,685 ------ ------ Property, plant and equipment, net 994 1,058 Investments in affiliates 9,982 9,763 Goodwill 1,071 1,071 Deferred tax assets 291 287 --- --- Total assets 25,345 23,864 ====== ====== Liabilities and shareholders' equity Current liabilities: Accounts payable 2,672 2,875 Other payables and accrued expenses 4,299 2,658 Taxation payable 512 422 --- --- Total current liabilities 7,483 5,955 ----- ----- Commitments and contingencies - - --- --- Shareholders' equity: Ordinary share, 20,000,000 (As of December 31, 2011: 123 123 20,000,000) shares authorized; 2,229,628 (As of December 31, 2011: 2,229,628) shares issued and outstanding Additional paid-in capital 9,532 9,533 Treasury stock, 160,386 (As of December 31, (765) (733) 2011: 151,747) shares at cost PRC statutory reserve 274 274 Accumulated other comprehensive income 718 731 Retained earnings 6,251 6,371 ----- ----- Equity attributable to owners of Euro Tech 16,133 16,299 Non- controlling interest 1,729 1,610 ----- ----- Total shareholders' equity 17,862 17,909 ------ ------ Total liabilities and shareholders' equity 25,345 23,864 ====== ======
EURO TECH HOLDINGS COMPANY LIMITED CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011 2012 2011 (Unaudited) (Unaudited) US$'000 US$'000 Revenue Trading and manufacturing 5,290 5,601 Engineering 3,673 3,953 ----- ----- Total revenue 8,963 9,554 Cost of revenue Trading and manufacturing (4,023) (4,302) Engineering (2,292) (2,874) ------ ------ Total cost of revenue (6,315) (7,176) ------ ------ Gross profit 2,648 2,378 Selling and administrative (2,813) (2,794) expenses Operating loss (165) (416) Interest income 27 28 Other income, net 16 55 --- --- Loss before income taxes and (122) (333) equity in profit of affiliates Income taxes (90) 7 219 166 Equity in profit of affiliates Net income/(loss) 7 (160) Less: net loss/ (income) (127) 172 attributable to non- controlling interest Net income/(loss) attributable to (120) 12 the Company Net income/(loss) per ordinary share - Basic US($0.058) US$0.001 ========= ======== - Diluted US($0.058) US$0.001 ========= ======== Weighted average number of ordinary shares outstanding - Basic 2,072,182 2,093,302 ========= ========= - Diluted 2,079,142 2,116,034 ========= =========
CONTACT: Euro Tech Holdings Company Limited, Hong Kong T.C. Leung, Chairman and CEO, or Jerry Wong, CFO Tel: 852-2814-0311 Fax: 852-2873-4887 Website: http://www.euro-tech.com Blue Sky's website: http://www.tianlan.cn
SOURCE Euro Tech Holdings Company Limited