China Water Affairs Group (855) H2 2024 earnings summary

Executive summary

• Revenue declined 9.4% year-over-year to HK$12,858.5 million, with gross profit down 10.7% to HK$4,776.0 million.

• Net profit attributable to owners fell 17.4% to HK$1,533.5 million; basic EPS dropped 17.5% to HK$0.94.

• Final dividend proposed at HK15 cents per share, with a total payout ratio of about 30%.

Financial highlights

• EBITDA decreased 9.2% to HK$5,152.5 million year-over-year.

• Gross margin was 37.2%, slightly down from 37.7% last year.

• Total borrowings increased to HK$24,850.3 million, with gearing ratio at 66.1%.

• Cash and pledged deposits stood at HK$5,550.2 million, down from HK$7,499.1 million.

Outlook and guidance

• Management expects pipeline direct drinking water to drive a second growth stage, leveraging green and low-carbon trends.

• Anticipates supportive government policies, interest rate cuts, and a new water price recovery cycle.

• Sufficient working capital expected for the next twelve months, supported by cash flow, loan facilities, and new financing.