SIIC Environment (BHK) Q1 2024 earnings summary

Executive summary

• 1QFY2024 revenue fell 15.1% YoY to RMB1,628.110m and profit attributable to shareholders fell 15.8% to RMB126.295m, mainly due to lower construction revenue.

• O&M and financial income from service concession arrangements rose 1.5% to RMB1,222.1m, supported by higher water treatment and supply volumes and average prices.

Financial highlights

• Gross profit fell 9.6% YoY to RMB611.188m; profit for the period was RMB204.977m, down 15.3%.

• Profit before tax decreased 17.7% to RMB276.5m; basic and diluted EPS were RMB4.90 cents, down 15.8%.

• Finance expenses declined 10.1% YoY to RMB204.2m after refinancing into lower-rate debt.

• Operating cash flow was an outflow of RMB76.30m; investing cash outflow was RMB256.0m and financing cash inflow was RMB501.9m.

Outlook and guidance

• Priorities include high-quality projects, technological innovation, upgrading and digitizing operations, and opportunities in the Greater Bay Area and Yangtze River Delta.

• Green, low-carbon and water infrastructure renewal policies may create opportunities in wastewater treatment, water supply upgrades and business growth.

• Green finance guidance may broaden financing channels and support lower financing costs for equipment renewal and technological transformation.