ZhongDe Waste Technology AG: Difficult start into financial year 2012
Q1 results 2012
EBIT improved slightly from EUR -1.5 million in the first quarter 2011 to EUR -1.4 million in the first three months of 2012. Net loss amounted to EUR -1.8 million, which corresponds to a decline of EUR 0.4 million compared to the same period last year (Q1 2011: EUR 1.4 million). This decrease is mainly due to higher finance costs.
ZhongDe's measures to control operating costs showed positive results: The company reduced its selling and distribution expenses by 53.5% to EUR 0.3 million (Q1 2011: EUR 0.6 million) in the first quarter of 2012. Also administrative expenses dropped from EUR 1.1 million to 1.0 million in this period.
The main reason for the poor results of the first quarter 2012 are the delays in the completion of waste-to-energy plants due to internal as well as external factors. The future financial performance of ZhongDe will depend on its progress of completing its on-going EPC and BOT construction projects. ZhongDe's Management Board estimates to finalize its current Zhoukou BOT project until the end of the financial year 2012.
Looking ahead, ZhongDe expects to benefit from the favorable economic environment for eco-friendly waste disposal as well as from the growing demand for waste-to-energy plants in China and throughout Asia. With regard to the slow recovery of the market for small-scale incinerators, ZhongDe will continue to focus on large-scale waste-to-energy projects. The company expects to sign one or two new project contracts in 2012, which will lead to a significant growth of order intake and order backlog. ZhongDe plans to generate recurring revenues especially with the BOT business, which delivers sustainable earnings stream from electricity sales and the waste disposal fee. The management of ZhongDe is convinced that the company will show improved financial performance in the coming years.
ZhongDe Waste Technology AG
ZhongDe Group designs, invests, constructs, finances and operates waste-to-energy incineration plants generating electricity from the disposal of solid municipal and industrial waste. ZhongDe realises either EPC (Engineering, Procurement and Construction) or BOT (Build, Operate and Transfer) projects, focusing on large-scale plants with waste disposal capacities of around 1,000 tons per day. Since 1996, ZhongDe Group has installed approximately 200 waste incinerators in 13 provinces throughout China. ZhongDe is one of the leading players in the project development and operation of waste-to-energy plants in China.