Leader Environmental Technologies (LS9) H2 2024 earnings summary

Executive summary

• FY2024 net loss widened to RMB62.1m from RMB53.0m; continuing-operations loss was RMB58.3m, while discontinued AlWater operations lost RMB3.9m.

• Sluggish PRC recovery, rising costs, lower project activity and significant contract-asset impairments weighed on results; strategic focus is shifting toward sludge treatment and membrane manufacturing.

Financial highlights

• Revenue was RMB30.47m versus RMB33.04m in FY2023; continuing revenue fell to RMB7.03m from RMB27.08m, while discontinued revenue rose to RMB23.44m from RMB5.97m.

• Continuing gross profit fell to RMB1.76m from RMB6.15m; gross margin improved to 25.1% from 22.7%. Discontinued gross profit rose to RMB9.11m, with margin down to 38.9% from 46.4%.

• Net loss was RMB62.14m versus RMB53.02m; continuing loss after tax was RMB58.27m versus RMB45.02m, and discontinued loss was RMB3.87m versus RMB7.99m.

• Operating cash outflow improved to RMB30.5m from RMB50.8m; cash and cash equivalents fell to RMB49.1m from RMB91.8m.

• Total assets declined to RMB207.0m from RMB254.4m; equity fell to RMB38.6m from RMB92.7m, while liabilities rose to RMB168.4m from RMB161.7m.

Outlook and guidance

• Sludge-treatment demonstration plant completion was expected in Q2 2025; the plant is designed for closed-loop treatment, zero-waste discharge and resource recovery.

• A consortium secured a RMB71.3m Tongxu municipal-sludge contract in early 2025; the apportioned value was approximately RMB30m, with proprietary CTH and energy-recovery technology to be supplied.

• A proposed RMB370m AlWater disposal is subject to SGX-ST and independent-shareholder approval; completion was expected to produce an estimated RMB318.1m net gain in FY2025.

• Forecasts for the next 15 months rely chiefly on sludge cash flows and membrane opportunities; the strategy includes more technical and O&M services to limit operating cash requirements.