Zhongtian Construction (2433) H2 2024 earnings summary

Executive summary

• FY2024 revenue fell 52.3% YoY to RMB930.8m; gross margin declined to 7.6%, and net results swung to a RMB26.4m loss from RMB46.0m profit.

• Lower revenue reflected challenging market conditions and completion of major projects that had supported FY2023 results.

Financial highlights

• Revenue decreased to RMB930.8m from RMB1,952.1m; gross profit fell 66.7% to RMB71.0m from RMB212.6m.

• Gross margin was 7.6% vs. 10.9% in FY2023, as subcontracting and material costs rose relative to revenue and competition increased.

• Loss before tax was RMB30.8m vs. FY2023 profit before tax of RMB52.8m; net loss was RMB26.4m vs. net profit of RMB46.0m.

• Administrative and other expenses fell to RMB74.0m from RMB125.5m; impairment losses on financial and contract assets rose to RMB37.6m from RMB17.4m.

• Basic and diluted loss per share was RMB4.69 cents vs. restated earnings of RMB9.60 cents; FY2024 owners’ loss was RMB25.4m.

Outlook and guidance

• Management’s 12-month cash-flow forecast supports going-concern preparation, subject to bank loan extensions, continued facilities, cost control and no significant economic deterioration.

• After year-end, a RMB15.0m bank loan was obtained; unused bank and credit facilities were RMB11.0m, and debtor collections reached at least RMB220m by announcement date.

• Cost controls and close monitoring of working capital were cited as measures to improve operating results and cash flows.