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CHINA Environment Ltd reported on Thursday that its net profit for the three months to end June fell 73.4 per cent from a year ago to 6.4 million yuan.
Revenue tumbled 37.9 per cent to 113.5 million yuan as fewer projects were completed during the second quarter compared to a year ago. About 78.6 per cent of its total revenue was from the power generation industry; 11.2 per cent from the steel and metallurgy industry; 6.4 per cent from the cement industry and the remaining 3.8 per cent was from other industries.
Cash and cash equivalents stood at 8.1 million yuan, compared to 42.9 million yuan a year ago.
The group said while China's anti-air pollution policy is positive for the company, the near-term outlook is clouded by a slowing economy, a tight credit environment as well as intense competition in the sector.
"As such the group will focus more on cash collection for our trade receivables and securing projects from customers with good credibility only,'' it said.
As of end June 2015, China Environment has 114.9 million yuan in secured loans and 71.9 million yuan unsecured that are repayable in a year or less.
Of the secured debt, 65.0 million yuan have been secured by the group's land use rights and property title deeds of its Anhui's plant and guaranteed by one of the its directors, his spouse, and a subsidiary. Another 49.9 million yuan was secured by bank deposits of 52.8 million yuan.
As for the 71.9 million yuan unsecured loan, 27.0 million yuan was guaranteed by one of its directors and secured by the land use rights and leasehold buildings of a related party, Fujian Mintai Environmental Protection Co Ltd, and the 44.9 million yuan was guaranteed by a director and his spouse.