27 Aug 2024
1H24 revenue down by 29% YoY to HK$2.13bn, mainly due to i) no construction revenue recorded during the period compared to HK$997m in 1H23, as there were no new projects; ii) revenue from power sales and waste treatment was up by 4.8% YoY to HK$1,819m, but if in terms of Rmb then would be up 7.5% YoY on the back of power sold up 4.6% YoY and MSW processed up 7.6% for its consolidated projects; and iii) a 44.4% YoY increase in revenue from environmental hygiene and other services (“EH”) to HK$218m. Overall GPM was up 10.5ppt YoY to 48.0% mainly due to i) sales mix change, as the higher margin operation segment (1H24 – GPM: 47.3%/85% of sales, 1H23 – GPM: 46.7%/58% of sales) outgrew construction segment (1H24 – 0% of sales, 1H23 – GPM: 16.7%/34% of sales); while partially offset by ii) GPM of the EH segment was down by 2.8ppt YoY to 36.7%. SG&A increased by 25.7% YoY to HK$350m amid more WTE projects under operation and also higher R&D related to innovation and digitalization. Interest expenses was up 7.8% YoY to HK$335m, as some of its loans were in HKD and HIBOR increased during the period. As a result, 1H24 NP was down by 27.1% to HK$445m, but if we exclude the impact of impairment of smart parking, increase in interest expenses and FX impact, adjusted NP was down by 13% YoY. No interim dividend was recommended during the period.