SIIC Environment (BHK) Q3 2024 earnings summary

Executive summary

• 9M2024 revenue fell 17.0% YoY to RMB5,272.606m and profit attributable to owners declined 14.4% to RMB499.627m, mainly reflecting lower construction activity.

• Gross margin rose 2.8 percentage points to 37.7%, supported by higher-margin operations and a lower construction-revenue mix.

Financial highlights

• Q3 revenue was RMB1,949.1m, down 16.4% YoY; profit was RMB271.3m, down 18.0%, and profit attributable to owners was RMB178.2m, down 13.5%.

• 9M net profit was RMB779.551m, down 15.7% YoY; basic and diluted EPS were RMB19.40 cents, down 14.3%.

• Construction revenue fell 52.7% to RMB1,016.1m; separately, construction revenue and construction-period concession finance income fell 56.2% to RMB1.021bn.

• Operation income, including operating-period concession finance income, rose 5.8% to RMB4.252bn; service-concession income including financial income increased 0.7% to RMB3,850.3m.

• 9M gross profit decreased 10.2% to RMB1,988.8m; finance expenses fell 6.7% to RMB591.8m after higher-interest non-RMB loans were replaced with lower-interest RMB loans.

Segment performance

• Water and Sludge Treatment revenue was RMB3,932.1m and segment operating profit RMB1,294.1m, versus RMB3,553.2m and RMB1,217.5m in 9M2023.

• Water Supply revenue was RMB733.8m and operating profit RMB66.0m, versus RMB945.3m and RMB149.6m in 9M2023.

• Waste Incineration revenue was RMB521.3m and operating profit RMB170.7m, versus RMB1,654.6m and RMB476.3m in 9M2023.

• Wastewater treatment volume rose 3.0% to 1,948.511m tonnes, and water supply volume increased 3.8% to 251.191m tonnes; average wastewater tariff rose 3.8% to RMB1.86 per tonne.

• Three new projects in Hubei, Shandong and Guangxi added 285,000 tonnes/day of capacity; four expansions totaling 190,000 tonnes/day commenced commercial operation.