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CITIC Envirotech 9-month profit drops 21.2% on one-offs, tax, engineering decline

CITIC Envirotech's net profit attributable to shareholders fell 21.2 per cent to S$40.8 million in the nine months ended December 2015 amid a decline in its engineering business, the absence of one-off gains and an increase in tax expenses.

On a per-share basis, nine-month profit was 3.65 Singapore cents per share at the water treatment specialist. CITIC Envirotech, which is changing its financial year-end to Dec 31, said 12-month net profit stood at S$59.3 million as at end-2015.

The company is declaring a final dividend of 0.36 Singapore cents per share. The stock closed at S$1.42 on Monday.

CITIC Envirotech recorded a one-off gain of S$14.2 million in the year-ago nine-month period from the disposal of available-for-sale investments. Excluding those gains and other one-off items, nine-month profit would have increased by 24.6 per cent to S$49.1 million, the company said.

Engineering revenue posted the sharpest decline, dropping 32.1 per cent to S$114.6 million, in the nine-month period. But water treatment revenue rose 61.1 per cent to S$106.5 million to mitigate the engineering slowdown.

The bottom line also took a hit from a 54.9 per cent increase in tax expense, to S$18.9 million, in the nine-month period.

CITIC Envirotech said the outlook for the Chinese water treatment sector, especially in industrial wastewater, remains "positive" with more opportunities arising from stricter government policies.

"With the ongoing China central government's push for strong environmental protection policies, we are confident that the outlook for the water sector will continue to be positive," the company said.