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China Everbright Water Q2 profit up 37%

WATER treatment company China Everbright Water Limited recorded a lift in profit for its second fiscal quarter, helped by a rise in construction revenue of several water environment treatment projects.

Profit attributable to company shareholders rose 37 per cent to HK$192.62 million (S$33.52 million) for Q2, on a 52 per cent rise in revenue to HK$1.31 billion.

That translated to earnings per share of HK$0.073 for Q2, up from HK$0.054 in the prior corresponding period. Net asset value was HK$3.18 for the period ended June 30, 2018, up from HK$2.99 last year.

The Chinese firm noted that the increase in construction revenue was "mainly attributable to construction of several water environment treatment projects including the sponge city construction project and the river-basin ecological restoration project, and construction of the water supply project in addition to the expansion and upgrading of several waste water treatment plants which were under construction during Q2 FY2018".

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Overall gross profit margin for Q2, meanwhile, fell to 32 per cent, compared to 34 per cent a year ago, mainly due to a  slightly larger portion of construction revenue recognised in the mix of the total revenue for the second quarter as compared to the year-ago period.

"In general, construction services have lower gross profit margin as compared to operation services, and thus, a
larger portion of construction revenue will reduce the overall gross profit margin," China Everbright Water said in their earnings statement.

For the first fiscal half of 2018, the company's net profit rose 45 per cent to HK$370.74 million, lifted by a 44 per cent rise in revenue to HK$2.36 billion.

On Aug 3, 2018, the company announced it is seeking a dual primary listing of its ordinary shares on the mainboard of the Stock Exchange of Hong Kong.

The company's shares gained 4.94 per cent, or two Singapore cents, to 42.5 Singapore cents as at 1.50pm on Tuesday.