Canvest Environmental Protection Group Company (1381) H1 2024 earnings summary

Executive summary

• Revenue declined 28.5% year-over-year to HK$2,130.4 million due to the absence of construction revenue, while core power sales and waste treatment revenue grew 4.8% to HK$1,819.1 million.

• Gross profit margin rose to 48.5% from 38.0% and EBITDA margin to 62.0% from 48.5%, reflecting improved operational efficiency.

• Net profit attributable to equity holders fell 27.1% year-over-year to HK$445.0 million; basic EPS was HK18.3 cents.

• No interim dividend declared for the period, compared to HK4.9 cents per share in the prior year.

• Recognized for ESG performance by MSCI, Sustainalytics, and Institutional Investor Magazine.

Financial highlights

• Revenue: HK$2,130.4 million (down 28.5% year-over-year); core revenue from power sales and waste treatment up 4.8%.

• Gross profit: HK$1,033.8 million (down 8.8%); gross profit margin increased to 48.5%.

• EBITDA: HK$1,321.7 million (down 8.6%); EBITDA margin up to 62.0%.

• Net profit: HK$452.2 million (down 29.4%); profit attributable to equity holders: HK$445.0 million.

• Operating cash flow: HK$613.1 million (up 59.3% year-over-year); CapEx: HK$460.1 million.

Outlook and guidance

• Focus on quality improvement, operational efficiency, and technological innovation in WTE and environmental hygiene.

• Plans to expand upstream and downstream business, leverage regional advantages, and pursue smart city management.

• Committed to green, low-carbon development and digital transformation to enhance competitiveness.

• National policy supports county-level WTE projects, but new capacity additions are small and face operational challenges.

• Strategic goals include expanding environmental hygiene and solid waste treatment services.