China Water Affairs Group (855) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 30 September 2024 was HK$5,952.6 million, down 13.0% year-over-year, mainly due to a strategic focus on higher-return projects and a slowdown in construction activities.

• Profit attributable to owners was HK$755.6 million, a decrease of 8.5% compared to the same period last year, with basic and diluted EPS at 46.29 HK cents.

• Interim dividend of HK$0.13 per share declared, unchanged from the prior year.

Financial highlights

• Gross profit decreased by 9.4% to HK$2,286.2 million year-over-year.

• EBITDA was HK$2,647.0 million, down 2.0% from the previous year.

• Operating profit was HK$2,019.1 million, compared to HK$2,126.9 million a year earlier.

• Total comprehensive income rebounded to HK$1,574.1 million from a loss of HK$346.5 million last year, mainly due to positive currency translation effects.

• Net assets increased by 5.2% to HK$22,568.7 million as of 30 September 2024.

Outlook and guidance

• The company expects stable performance in its core water supply business, supported by government stimulus and market reforms in water pricing.

• Plans to optimize development strategy, reduce capital expenditure, and enhance management efficiency for sustainable growth, focusing on dual water supply and both asset-light and asset-heavy models.

• Market consensus is for water tariff increases and favorable interest rate trends, supporting future profitability.