Beijing Enterprises Water Group (371) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB11,308.8 million, down 6% year-over-year, mainly due to lower construction services revenue from BOT water projects, with a shift toward higher-margin water treatment services.

• Profit attributable to shareholders decreased by 18% to RMB1,122.1 million compared to the same period last year.

• The Group continued its asset-light transformation, focusing on technological innovation, digitalization, and sustainable development.

• EBITDA declined 1.5% to RMB4,659.7 million.

• Interim cash dividend of HK7.0 cents per share was declared, with a 60% payout ratio.

Financial highlights

• Gross profit margin increased to 38% from 37% in the prior year period, driven by a higher proportion of water treatment services.

• Cost of sales decreased to RMB7,015.3 million from RMB7,652.6 million, reflecting lower construction costs.

• Administrative expenses fell 3% to RMB1,251.7 million, indicating effective cost control.

• Finance costs rose slightly to RMB1,565.6 million due to higher average interest rates.

• Share of profits from joint ventures increased to RMB308.0 million, while associates' contribution dropped to RMB16.8 million.

Outlook and guidance

• The Group will continue to pursue asset-light operations, technological advancement, digital transformation, and sustainable development.

• Regulatory changes in China, such as new water conservation regulations, are expected to benefit the reclaimed water business.

• Ongoing focus on cost optimization and efficiency improvements.

• Plans to enhance innovation, environmental efforts, and value creation, aiming to be a world-leading water environmental service provider.