Last updated on April 18, 2014 at 1:21 EDT

Euro Tech Holdings Company Limited Reports Interim Results for the Six Months Ended June 30, 2012

December 27, 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.

                           CONSOLIDATED BALANCE SHEETS
                                                         As of         As of
                                                      June 30,  December 31,
                                                          2012          2011
                                                   (Unaudited)     (Audited)
                                                       US$'000       US$'000


    Current assets:
    Cash and cash
     equivalents                                         6,029         5,339
    Restricted cash                                        888           246
     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

     payable                                             2,672         2,875
    Other payables
     and accrued
     expenses                                            4,299         2,658
     payable                                               512           422
                                                           ---           ---

    Total current
     liabilities                                         7,483         5,955
                                                         -----         -----

    Commitments and
     contingencies                                           -             -
                                                           ---           ---

    Ordinary share,
     20,000,000 (As
     of December
     31, 2011:                                             123           123
      (As of December
       31, 2011:
      issued and
     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
     income                                                718           731
     earnings                                            6,251         6,371
                                                         -----         -----

     to owners of
     Euro Tech                                          16,133        16,299
     interest                                            1,729         1,610
                                                         -----         -----

     equity                                             17,862        17,909
                                                        ------        ------

     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

    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)

    Operating loss                                              (165)                      (416)
    Interest income                                               27                         28
    Other income, net                                             16                         55
                                                                 ---                        ---

    Loss before income
     taxes and                                                  (122)                      (333)
      equity in profit of

    Income taxes                                                 (90)                         7
                                                                 219                        166
    Equity in profit of

    Net income/(loss)                                              7                       (160)
    Less: net  loss/
     (income)                                                   (127)                       172
      attributable to non-

    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
    - 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

Source: PR Newswire