10
CITIC Envirotech Ltd.
Annual Report
2015
Dear Shareholders,
Performance for Financial Period
from 1 April 2015 to 31 December 2015
OPERATIONAL REVIEW
In April 2015, CITIC Envirotech Ltd. embarked on a new
journey with its major shareholder, CITIC Environment
Investment Group Co., Ltd (“CITIC Environment”). This
strategic partnership with China’s largest conglomerate
paved the way for a rewarding year with breakthroughs in the
development and growth of the Company.
Operational Net Profit after adjusting for one-off items for
9-months ended 31 December 2015 increased 24.6% to
$49.1 million, with 61.1% increase in recurring water treatment
revenue of $40.4 million to $106.5 million compared to the
last corresponding period. The Group continues its focus in
generating stable and recurring revenue from its investment in
wastewater treatment plants.
During the financial period, CEL secured contracts valued
in aggregate of over RMB 2 billion, including winning our
first Public-Private-Partnership (PPP) project in Liaoyang City,
Liaoning Province, China, in November 2015. The PPP project
involved an investment of RMB 549 million into 4 wastewater
treatment facilities in Liaoyang City.
In April 2015, CEL secured one of its largest investment
projects in industrial wastewater treatment. The RMB 800
million Transfer-Operate-Transfer (TOT) cum Build-Operate-
Transfer (BOT) project is located in a major textile centre in
Gaoyang County, Hebei Province, China. The project involves
the expansion and upgrading of textile wastewater treatment
plants and wastewater recycling using membrane technology.
CEL was also awarded a RMB 400 million Engineering,
Procurement and Construction (EPC) contract to construct an
80,000 m
3
/day wastewater treatment plant in Tianshui City,
Gansu Province, China in October 2015. This project will
use the Company’s proprietary Membrane Bioreactor (MBR)
technology to treat municipal wastewater and will be the
first large scale underground MBR in Western China when
completed.
In November 2015, CEL made its first foray into Indonesia with
its first BOT water supply project to supply clean water to the
local water authority in Medan City.
The Company also saw robust growth in membrane sales
following the strategic partnership with Chengdu Xingrong
Investment Co. Ltd (Chengdu Xingrong) in Sichuan, China
and Beijing Drainage Group Co. Ltd (Beijing Drainage) in
Beijing, China. The sales of membrane to Chengdu Xingrong
and Beijing Drainage projects, coupled with new projects,
saw steady orders for membranes products which culminated
in $53.7 million of membrane revenue for the period. To
meet the increase in demand for membrane production, its
production facility in Singapore has moved to the new 5,083
square metres factory at Kian Teck Drive since November 2015,
where production capacity doubled and is well-equipped with
state-of-the-art R&D facilities. In addition, new membrane
production facilities have also been set up in Nantong, Jiangsu
Province as well as in Beijing, China.
To optimise CEL’s capital structure, the Group launched its
US$750 million perpetual securities issuance programme
in November 2015 and successfully raised US$175 million
which were many times oversubscribed due to overwhelming
demand from investors.
GEARED FOR HIGHER GROWTH
The Group continues to remain upbeat about its prospects in
the water sector in China given that solving pollution issues is
a key political mission of the Central Government. As urban
CEO’S MESSAGE
