Euro Tech Holdings Company Limited Reports Interim Results For The Six Months Ended June 30, 2019
HONG KONG, Dec. 23, 2019 /PRNewswire/ -- Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported its unaudited financial results for the six months ended June 30, 2019.
The Company's revenues for the six months ended June 30, 2019 ("1H 2019") were approximately US$8,815,000, a 7.4% decrease as compared to approximately US$9,516,000 for the six months ended June 30, 2018 ("1H 2018"). Revenues from trading and manufacturing activities, and engineering activities decreased by US$281,000 and US$420,000, respectively.
Gross profits increased by 39.5% to approximately US$2,036,000 for 1H 2019 as compared to approximately US$1,460,000 for 1H 2018. The increase was primarily due to the drop in contracts of low profit margin.
Selling and administrative expenses increased by approximately US$75,000 to US$2,512,000 for 1H 2019 as compared to approximately US$2,437,000 for 1H 2018 as a result of general inflation.
Operating loss decreased by 48.4% to approximately US$476,000 for 1H 2019 as compared to approximately US$983,000 for 1H 2018. This was primarily due to the increase in gross profits.
The profit contribution from the affiliates increased by approximately US$55,000 to profit contribution of US$43,000 for 1H 2019 as compared to negative contribution of approximately US$12,000 for 1H 2018.
The net loss was approximately US$280,000 for 1H 2019, as compared to net profit of approximately US$878,000 for 1H 2018. This was primarily due to there was a non-recurrent net gain on disposal of an affiliate of approximately US$1,522,000 in 1H 2018.
The economic slowdown in Mainland China and Hong Kong resulting from the China-US trade war and the ongoing social unrest in Hong Kong will adversely affect the overall operating performance of the Company in the second half year of 2019 and the near future.
The development of the ballast water port solution prototype is now completed and under system and operation tests in various ports. The port solution system is a system installed in port to offer ballast water treatment services for ocean going ships without their own ballast water treatment system ("BWTS") and for those with damaged BWTS. The Company is now embarking on promotion activities for port solution systems in China and South East Asia.
About BWTS
BWTS are an imminent requirement by The International Maritime Organization ("IMO") to prevent the biological unbalance caused by the estimated 12 billion tons of ballast water transported across the seas by ocean-going vessels when their ballast water tanks are emptied or refilled. In 2012, ballast water discharge standard became a law in the US. Any vessel constructed in December 2013 or later will need to comply when entering US waters, and existing vessels will follow shortly after. IMO's Ballast Water Management Convention entered into force for new-built vessels on September 8, 2017 after ratification by 52 States, representing 35.1441% of world merchant shipping tonnage. According to the IMO's decision, the phase-in period for ballast water system retrofits started on 8 September 2019.
The company obtained type approval certificate from China's Classification Society for its 200, 300, 500, 750, 1200 and 1250 Cubic Meters per hour BWTS and Alternate Management Systems ("AMS") acceptance for its full range BWTS in 2016.
Certain statements in this news release regarding the Company's expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company's offices and operations situated in Hong Kong and Mainland China, doing business in China, competing with Chinese manufactured products, competing with the Company's own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the "Risk Factor" discussions in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2018.
EURO TECH HOLDINGS COMPANY LIMITED
CONSOLIDATED BALANCE SHEETS
As of
As of
December 31,
June 30, 2018
2019
(Audited)
(Unaudited)
US$'000
US$'000
Assets
Current assets:
Cash and cash
equivalents 6,260 5,267
Restricted cash 574 1,330
Receivables, net 2,012 5,089
Prepayments and other
current assets 584 547
Contract assets 73 899
Inventories, net 314 401
Total current assets 9,817 13,533
Property, plant and
equipment, net 719 754
Interests in
affiliates 7,626 7,583
Goodwill 1,071 1,071
Deferred tax assets 125 124
Total non-current
assets 9,541 9,532
Total assets 19,358 23,065
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Liabilities and
shareholders' equity
Current liabilities:
Accounts payable 2,437 4,900
Contract liabilities 640 1,370
Other payables and
accrued expenses 1,107 1,250
Total current
liabilities 4,184 7,520
Commitments and
contingencies
Shareholders' equity:
Ordinary share, 123 123
20,000,000 (2018:
20,000,000) shares
authorized;
2,229,609 (2018:
2,229,609) shares
issued
Additional paid-in
capital 9,551 9,551
Treasury stock,
167,700 (As of
December 31, (786) (786)
2018: 167,700) shares
at cost
PRC statutory reserves 316 316
Accumulated other
comprehensive income 899 893
Retained earnings 4,212 4,492
Equity attributable to
shareholders of Euro
Tech 14,315 14,589
Non-controlling
interests 859 956
Total shareholders'
equity 15,174 15,545
Total liabilities and
shareholders' equity 19,358 23,065
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EURO TECH HOLDINGS COMPANY LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
/ (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018
2019 2018
(Unaudited)
(Unaudited)
US$'000
US$'000
Revenues
Trading and
manufacturing 5,353 5,634
Engineering 3,462 3,882
Total
revenues 8,815 9,516
Cost of
revenues
Trading and
manufacturing (4,123) (4,679)
Engineering (2,656) (3,377)
Total cost
of revenues (6,779) (8,056)
Gross profit 2,036 1,460
Finance
costs (6)
Selling and
administrative
expenses (2,512) (2,437)
Operating
loss (476) (983)
Interest
income 47 11
Other income
/(losses),
net 9 (5)
Loss before
income
taxes,
equity in (420) (977)
income /
(loss) of
affiliates
and non-
controlling
interests
Income taxes
credit 1 253
43 (12)
Equity in
income /
(loss) of
affiliates
Net gain on
disposal of
affiliate 1,522
Net (loss) /
profit (376) 786
Add: net
loss
attributable
to non- 96 92
controlling
interests
Net (loss) /
profit
attributable
to the (280) 878
Company
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Other
comprehensive
loss
Net (loss) /
profit (376) 786
Foreign
exchange
translation 5 (8)
adjustments
Comprehensive
(loss) /
income (371) 778
Add:
Comprehensive
loss
attributable 97 96
to non-
controlling
interests
Comprehensive
(loss) /
income (274) 874
attributable
to the
Company
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Net (loss) /
income per
ordinary
share
-Basic
US$(0.14)
US$0.43
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-Diluted
US$(0.14)
US$0.43
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Weighted
average
number of
ordinary
shares
outstanding
-Basic 2,061,909 2,061,909
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-Diluted 2,061,909 2,061,909
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Dividend per
share
US$ -
US$0.70
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SOURCE Euro Tech Holdings Company Limited
