Zheneng Jinjiang H2 profit plummets on impairment loss, revenue down 18.8% to 1.8 billion yuan

ZHENENG Jinjiang Environment : BWM 0% posted a net profit of 15.3 million Chinese yuan (S$2.9 million) for the second half ended Dec 31, 2023, plummeting 93.4 per cent from 231.5 million yuan in the corresponding period the year before.

Earnings per share stood at 0.0105 yuan for H2 2023, also 93.4 per cent down from the 0.1592 yuan the previous year.

The China-based waste-to-energy (WTE) and environmental-services provider announced in a bourse filing on Wednesday (Feb 28) that its revenue for H2 2023 dropped 18.8 per cent to 1.8 billion yuan from 2.2 billion yuan in H2 2022.

For the financial year, the group recorded a revenue of 3.75 billion yuan, 7.9 per cent down from 4.1 billion yuan in FY 2022. Net profit shrank 13.3 per cent to 281.6 million yuan, from 325 million yuan a year ago.

The decrease was mainly attributed to a drop in revenue from construction services and financial income under service concession agreements, totalling 331.7 million yuan. This was the result of reduced construction services provided under build-operate-transfer (BOT) concession agreements.

The group said that it recorded a 271.8 million yuan impairment loss in FY2023 “due to difficulties and uncertainty in the progress of the power plant of its BOT projects in India”.

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“Net profit attributable to the equity holders would have been higher at 560.8 million yuan without this non-recurring item and foreign exchange impact,” it added.

The board of directors has recommended a first and final dividend of S$0.013 per share. There was no dividend last year.

Subject to the approval of shareholders, the date payable will be announced later.

Over the near term, the group is cautious that “the economic condition in China will remain challenging”. However, it is generally optimistic about the long-term development of China’s renewables industry.

The group said that it expects to see more low-carbon initiatives being implemented in China, including policies on the extension of the WTE value chain.

Revenue from Zheneng Jinjiang’s core WTE business grew 2.7 per cent year on year to 3.4 billion yuan in FY2023. This segment contributes to 91.3 per cent of the group’s total revenue.

Riding on the positive outlook for the renewables sector, the group eyes diversification within the WTE ecosystem under its long-term growth strategy.

Shares of Zheneng Jinjiang Environment closed S$0.135 or 54 per cent higher, at S$0.385 on Wednesday before the announcement.