China Jinjiang Environment reports flat 2Q earnings of $30 mil as higher cost of sales and other losses offset revenue rise

SINGAPORE (Aug 14): China Jinjiang Environment Holding Company reported flat 2Q19 earnings of RMB149.6 million ($29.6 million) from a year ago.

Revenue for 2Q19 rose 37.6% to $934 million due to an increase in revenue from construction services provided under BOT concession agreements and an increase in revenue from WTE (waste-to-energy) business.

Revenue from WTE business increased 31.2% to RMB584.0 million in 2Q19 due to the expansion and upgrading of seven of the eight WTE facilities being completed by the end of 2Q19 and an increase in revenue from other WTE facilities.

Revenue from construction services provided under build-operate-transfer (BOT) concession agreements increased by 801.3% to RMB313 million in 2Q19.

Revenue from project technical and management services and its EMC (energy management contract) business decreased 80.6% to RMB38.9 million in 2Q19.

However, cost of sales increased 83.8% to RMB631.9 million, resulting in a 9.7% fall in gross profit to RMB304.1 million.

There was also other losses amounting to RMB14.4 million while admin expenses rose 14% to nearly RMB55 million.

Finance costs fell 5.4% to RMB60.3 million while income tax expense fell 65.4% to RMB21.6 million.

On June 10, Zhejiang Energy International and Zheneng Capital Holdings Co -- both controlled by the Zhejiang Provincial Energy Group Co -- entered into a conditional agreement for the acquisition of 29.79% of the shares in China Jinjiang Environment, to become the largest controlling shareholder of the group.

The deal is expected to be completed by Sept 10. Upon completion, Dou Zhenggang and Wei Xuefeng are expected to be the second largest controlling shareholders of Jinjiang Environment, each indirectly holding 25.82% of the shares in China Jinjiang Environment.

Shares in China Jinjiang Environment closed 0.5 cent at 60 cents on Wednesday.