Euro Tech Holdings Company Limited Reports Interim Results For The Six Months Ended June 30, 2024
PR Newswire
HONG KONG, Dec. 19, 2024
HONG KONG, Dec. 19, 2024 /PRNewswire/ -- Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported its unaudited financial results for the six months ended June 30, 2024.
The Company's revenue for the six months ended June 30, 2024 ("1H 2024") were US$7,259,000, a 8.8% decrease as compared to US$7,957,000 for the six months ended June 30, 2023 ("1H 2023"). The decrease was primarily due to decrease in revenue from engineering activities of US$545,000.
Gross profit increased by 19.5% to US$1,790,000 for 1H 2024 as compared to US$1,498,000 for 1H 2023. The increase was primarily due to the increase in gross profit margin % on revenue from engineering activities.
General and administrative expenses slightly decreased by US$46,000 to US$2,167,000 for 1H 2024 as compared to US$2,213,000 for 1H 2023.
The Company's net income for 1H 2024 was US$44,000 as compared to net loss of US$255,000 for 1H 2023 resulting from increase in gross profit.
Mr. David Leung, CEO of the company commented,
"In 2024 our industrial waste water treatment ("WWT") business has suffered from the continued slowdown of China's economy due to less foreign investments and falling export business. Continued efforts to maintain lean operation are being undertaken at present, and further trimming of overhead costs is necessary.
However, our Ballast Water Treatment Systems ("BWTS") business has been growing steadily in China and overseas countries, particularly Turkey, due to the healthy growth of the maritime industry.
Based on exhibitions participated, we foresee that more sales orders for BWTS can be captured. As we have observed a trend among shipowners of acquiring more small and medium-sized ships with shorter sailing routes to neighboring countries. This trend is gaining momentum due to the stricter compliance requirements enforced by IMO policies and various local region environmental laws. Moreover, there are more inland river ships being converted into ocean-going vessels, with most of these conversions involving small ships. Lastly, there are still a significant number of vessels that have not yet installed BWTS because many shipowners have obtained exemption letters a couple of years ago to postpone BWTS retrofitting.
We also see a trend of more domestic factories and even multinational companies in China relocating their plants overseas. Capturing the growth for this market is crucial, we therefore have recently incorporated a majority-owned Singapore entity named PACT Environmental Technology PTE Ltd. We believe this new entity can provide better support for our overseas clients and increase international business tender bidding opportunities for our overall business. Furthermore, we will utilize our upcoming BWTS trade shows to promote our industrial WWT business to the maritime sector, as green transformation for ports or even shipyards in certain countries has become necessary due to stringent environmental regulations."
About BWTS
BWTS are an imminent requirement by The International Maritime Organization ("IMO") to prevent the biological unbalance caused by the estimated 12 billion tons of ballast water transported across the seas by ocean-going vessels when their ballast water tanks are emptied or refilled. In 2012, ballast water discharge standard became a law in the US. Any vessel constructed in December 2013 or later will need to comply when entering US waters, and existing vessels will follow shortly after. IMO's Ballast Water Management Convention entered into force for new-built vessels on September 8, 2017 after ratification by 52 States, representing 35.1441% of world merchant shipping tonnage. In July 2017, IMO decided that the phase-in period for ballast water system retrofits started on 8 September 2019.
The company obtained type approval certificate from China's Classification Society for its 200, 300, 500, 750, 1200 and 1250 Cubic Meters per hour BWTS in 2016.
The IMO convention stipulates that type approval for revised G8 requirements must be obtained for all BWTS installed on or after October 28, 2020, and the company have been in compliance with such requirements.
The ballast water port solution system is a system installed in port to offer ballast water treatment services for ocean going ships without their own BWTS and for those with damaged BWTS.
Certain statements in this news release regarding the Company's expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company's offices and operations situated in Hong Kong and China, doing business in China, competing with Chinese manufactured products, competing with the Company's own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the "Risk Factor" discussions in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2023.
EURO TECH HOLDINGS COMPANY LIMITED
CONSOLIDATED BALANCE SHEETS
As of As of
June 30, December 31,
2024 2023
(Unaudited) (Audited)
US$'000 US$'000
ASSETS
Current assets:
Cash and cash equivalents 4,521 5,453
Restricted cash 1,041 1,193
Accounts receivable, net 1,491 2,864
Prepayments and other current assets 810 246
Contract assets 23 66
Inventories 426 723
---------------- ------------------
Total current assets 8,312 10,545
---------------- ------------------
Property, plant and equipment, net 163 168
Investments in affiliates 9,781 9,856
Goodwill 1,071 1,071
Operating lease right-of-use assets,
net 95 233
Deferred tax assets 102 103
Restricted cash 18 144
---------------- ------------------
Total non-current assets 11,230 11,575
---------------- ------------------
TOTAL ASSETS 19,542 22,120
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings - 154
Accounts payable 2,297 3,456
Contract liabilities 441 650
Other payables and accrued expenses 899 1,124
Current portion of long-term operating
lease liabilities 95 170
Income tax payable 52 42
---------------- ------------------
Total current liabilities 3,784 5,596
---------------- ------------------
Long-term operating lease liabilities,
net of current portion - 44
---------------- ------------------
Total non-current liabilities - 44
---------------- ------------------
TOTAL LIABILITIES 3,784 5,640
---------------- ------------------
Commitments and contingencies - -
SHAREHOLDERS' EQUITY:
Ordinary share, 20,000,000 shares
authorized and no par value;
7,899,832 and 7,899,832 shares
issued as of June 30, 2024 and
December 31, 2023, respectively 123 123
Additional paid-in capital 9,774 9,762
Treasury stock, 183,533 and 178,400
shares at cost as of June 30, 2024
and December 31, 2023,
respectively (807) (800)
PRC statutory reserves 342 342
Accumulated other comprehensive income 730 733
Retained earnings 4,908 5,481
---------------- ------------------
Total shareholders' equity
attributable to Euro Tech Holdings
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