China International full-year profit drops 63.8% after absence of one-off gains

CHINA International Holdings reported a 63.8 per cent drop in full-year profit to 7.2 million yuan (S$1.4 million)  from 19.8 million yuan a year ago, due mainly to the absence of one-off gains.

Earnings per share for the year ended Dec 31 dropped to 10.05 fen from 29.59 fen.

Revenue dipped 1.3 per cent to 89.7 million yuan from 90.8 million yuan.

Gross profit margin fell to 56.9 per cent in FY2018 from 59.2 per cent in FY2017, as the cost of sales rose 4.4 per cent mainly due to higher cost of water operations.

Other income tumbled 77.2 per cent or 26.4 million yuan to 7.77 million yuan from 34.1 million a year ago, which was due mainly to a gain on disposal of subsidiaries and a gain on waiver of amount payable recorded in the previous year.

The company repaid a significant amount of debt, with total borrowings decreasing from 90.9 million yuan as at end-December 2017 to 28 million yuan as at end-December, 2018. Cash and bank balances increased to 64.3 million yuan from 57.1 million yuan.

China International recorded a share of loss from associated companies of 2.90 million yuan, contrasting with a share of profit of 6.44 million yuan in FY2017. The loss was attributed to associated company, KYWJ Group, due to higher expenses incurred for general advertising and marketing activities by a new operating company, Hong Kun, to attract new buyers. 

The group expects the current operations of the Tianjin Water project to have a positive performance in 2019. It commenced the construction of a new water treatment plant in 2018 and expects it to complete in the second half of 2019.

The plant is expected to cost approximately 160 million yuan and will be financed from internal cash resources and debt financing.

It will treat water discharged from a wastewater treatment plant to the standard of reclaimed water, and is expected to significantly increase the water supply capacity of Tianjin Water. 

As of 1.35pm, China International shares traded flat at S$0.55.