Canvest Environmental Protection Group Company (1381) H1 2024 earnings summary

Executive summary

• Navigated a challenging macro environment and intensified competition with strong operational resilience, efficiency improvements, and a focus on automation and cost optimization.

• Revenue declined 28.5% year-over-year to HK$2,130.4 million due to the absence of construction revenue, while core power sales and waste treatment revenue grew 4.8% to HK$1,819.1 million.

• Processed 8.7 million tonnes of MSW, generated 3.23 billion kWh of green electricity, and offset 4.79 million tonnes of CO2 in 1H2024.

• Achieved recognition for ESG performance, industry awards, and ranked 16th in the 2023 Top 50 Environmental Enterprises in China.

• No interim dividend declared for the period, compared to HK4.9 cents per share in the prior year.

Financial highlights

• Revenue for H1 2024 was HK$2,130.4 million, down 28.5% year-over-year, mainly due to zero construction income.

• Gross profit reached HK$1,033.8 million, down 8.8% year-over-year; gross margin increased to 48.5%.

• Net profit attributable to equity holders fell 27.1% to HK$445.0 million; net profit margin was 21.5%.

• EBITDA margin rose to 62.0% from 48.5% year-over-year.

• Operating cash flow increased 59.3% to HK$613.1 million.

Outlook and guidance

• Plans to strengthen management of existing projects, reduce costs, and improve efficiency.

• Strategic focus on technological innovation, digital transformation, and expanding environmental hygiene and solid waste treatment services.

• Will expand steam sales and integrated environmental hygiene business to drive new revenue streams.

• Committed to green, low-carbon development and smart city management.

• National policy supports county-level WTE projects, but new capacity additions are small and face operational challenges.