ZhongDe Waste Technology AG: Financial results benefit from positive one-off effects in the third quarter 2012
Revenues increased by 15.8% to EUR 7.4 million in Q3 2012 / EBIT of EUR 7.0 million due to positive one-off effects / New BOT project signed in October
The third quarter 2012 was significantly impacted by two positive one-off effects: First, the land use rights for the planned manufacturing facility in Beijing, which had been written off at the end of the year 2011, have finally been approved by the Chinese authorities and thus generated an appreciation of EUR 6.7 million. In addition the results of the third quarter were positively affected by the reversal of a provision amounting to EUR 1.0 million to cover penalties, which were settled at a more favorable amount. Both one-off effects are reflected in the other operating income.
Revenues of the Company increased by 15.8% to EUR 7.4 million in the third quarter 2012 as a result of the progress on the Kunming and Xianning BOT projects. Despite this positive development, revenues for the first 9 months 2012 are still 8.0% below the comparable period 2011. Gross profit grew slightly by 0.8% to EUR 1.3 million in Q3 2012. Adjusted for the positive one-off effects, EBITDA increased by EUR 0.3 million but remained negative at EUR -0.9 million (Q3 2011: EUR -1.2 million) while the adjusted EBIT grew to EUR -0.8 million (Q3 2011: EUR -1.2 million).
Including the one-off effects EBIT increased to EUR 7.0 million (Q3 2011: EUR -1.2 million) and net profit amounted to EUR 6.3 million (Q3 2011: EUR -1.8 million). For the full 9 months 2012 net profit reached EUR 2.1 million (9M 2011: EUR -5.1 million).
The strict cost control measures implemented to improve ZhongDe's operative results showed impact in Q3 2012. Selling and distribution costs remained stable at EUR 0.5 million compared to the third quarter last year. Administrative expenses even went down by 25.4% to EUR 0.9 million (Q3 2011: EUR 1.2 million).
Despite several internal and external factors including delays in the granting of various Chinese government approvals, which slowed down the completion of ZhongDe's running BOT and EPC projects, ZhongDe still disposes of a strong cash position of EUR 108.7 million and a total equity of EUR 128.6 million as of 30 September 2012. The equity ratio of the company amounted to 59.1%.
For the rest of the financial year 2012, ZhongDe will focus on completing its BOT project in Zhoukou and on advancing the construction process of its other BOT projects in Kunming and Xianning. Due to the slow recovery of the market for small-scale incinerators, ZhongDe will continue to focus on large-scale waste-to-energy projects.
Regarding the financial results, ZhongDe's Management Board confirms its guidance of reaching better overall financial results in 2012 compared to 2011.
New BOT project in Lanzhou signed in October
In October 2012, ZhongDe was able to achieve a very important business deal by signing the largest waste-to-energy BOT project within China. Customer is the Lanzhou Qinwangchuan Integrative Development Management Committee. The new waste-to-energy plant located in Lanzhou City will have a daily waste disposal capacity of up to 3,000 tons. The total order intake amount of Lanzhou is expected to be EUR 177.9 million.
"We are starting the planning phase of the project in Lanzhou in the fourth quarter 2012. Thanks to this new order, the Management Board of ZhongDe expects to achieve much better financial results in the future", says William Wang, CFO of ZhongDe Waste Technology AG.
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.