EX-99.1 2 clwt_ex991.htm PRESS RELEASE clwt_ex991
  Exhibit 99.1
 
Euro Tech Holdings Company Limited Reports Interim Results For The Six Months Ended June 30, 2020
 
Hong Kong – December 30, 2020 – Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported its unaudited financial results for the six months ended June 30, 2020.
 
The Company’s net income for the six months ended June 30, 2020 (“1H 2020”) was approximately US$869,000 as compared to net loss of approximately US$280,000 for the six months ended June 30, 2019 (“1H 2019”). This was attributed by the non-recurrent net gain on disposal of a property of approximately US$1,429,000.
 
The adverse impact of COVID-19 coupled with the China-US escalating trade war and technology tensions, and the ongoing social unrest in Hong Kong resulted in a 35.1% decrease of revenues from approximately US$8,815,000 for 1H 2019 to approximately US$5,718,000 for 1H 2020. Revenues from trading and manufacturing activities, and engineering activities decreased by US$1,426,000 and US$1,671,000, respectively.
 
Gross profits decreased by 20.5% to approximately US$1,619,000 for 1H 2020 as compared to approximately US$2,036,000 for 1H 2019. The decrease was primarily due to the drop in revenues.
 
Selling and administrative expenses decreased by approximately US$171,000 to US$2,341,000 for 1H 2020 as compared to approximately US$2,512,000 for 1H 2019, in spite of the severance pay of approximately US$117,000 related to the scale-down of its loss-making manufacturing operation. The decrease was principally due to tight control over expenses.
 
Operating loss increased by 52.5% to approximately US$726,000 for 1H 2020 as compared to approximately US$476,000 for 1H 2019. This was primarily due to the decrease in revenues.
 
The Company expects that its operating performance will continue to be negatively impacted by COVID-19. However, the Company is still positive about the future Ballast Water Treatment Systems (“BWTS”) business from port services and commercial ships. The Company’s first ballast water port solution system has recently been delivered to its Shanghai port client. As the first pioneer to commence on commercial ballast water port reception treatment service in the Asia Pacific region, the Company is currently working on a number of enquiries from China, Southeast Asia and Europe. To comply with the International Maritime Organization ("IMO") revised G8 requirements, the Company obtained a BWTS revised G8 test report already from a third party ballast water conformity assessment laboratory (with China National Accreditation Service qualification), and is now undergoing China Classification Society’s internal procedure of issuing the revised G8 type approval certificate.
 
About BWTS
 
BWTS are an imminent requirement by 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 and Alternate Management Systems (‘AMS”) acceptance for its full range 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.
 
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, 2019.
 
 
 
 
EURO TECH HOLDINGS COMPANY LIMITED
 
CONSOLIDATED BALANCE SHEETS
 
 
 
As of
June 30,
2020
(Unaudited)
 
 
As of
December 31,
2019
(Audited)
 
 
 
US$’000
 
 
US$’000
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
  5,015 
  5,991 
Restricted cash
  1,453 
  658 
Accounts receivable, net
  1,765 
  3,586 
Prepayments and other current assets
  1,495 
  748 
Contract assets
  62 
  441 
Inventories
  205 
  586 
Total current assets
  9,995 
  12,010 
 
    
    
Property, plant and equipment, net
  271 
  700 
Interest in affiliate
  7,677 
  7,720 
Goodwill
  1,071 
  1,071 
Deferred tax assets
  37 
  87 
Operating right-of-use assets
  310 
  406 
Long-term investment
  148 
  148 
Restricted cash
  126 
  71 
Total non-current assets
  9,640 
  10,203 
Total assets
  19,635 
  22,213 
 
    
    
Liabilities and shareholders’ equity
    
    
Current liabilities:
    
    
Bank borrowings
  - 
  565 
Accounts payable
  2,129 
  3,914 
Contract liabilities
  1,382 
  869 
Other payables and accrued expenses
  1,028 
  1,142 
Current portion of operating lease obligations
  160 
  170 
Total current liabilities
  4,699 
  6,660 
Non-current liabilities:
    
    
Operating lease obligations, net of current maturities
  130 
  216 
Total liabilities
  4,829 
  6,876 
Commitments and contingencies
    
    
 
    
    
Shareholders’ equity:
    
    
Ordinary share,
20,000,000 (2019: 20,000,000) shares authorized;
3,260,559 (2019: 3,260,559) no par value shares issued
  123 
  123 
Additional paid-in capital
  9,588 
  9,561 
Treasury stock, 167,700 shares at cost as of June 30, 2020 and December 31, 2019, respectively
  (786)
  (786)
PRC statutory reserves
  316 
  316 
Accumulated other comprehensive income
  907 
  899 
Retained earnings
  3,916 
  4,346 
Total shareholders’ equity attributable to Euro Tech Holdings Company Limited
  14,064 
  14,459 
Non-controlling interests
  742 
  878 
Total shareholders’ equity
  14,806 
  15,337 
 
    
    
Total liabilities and shareholders’ equity
  19,635 
  22,213 
 
 
 
 
 
EURO TECH HOLDINGS COMPANY LIMITED
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019
 
 
 
2020
(Unaudited)
 
 
2019
(Unaudited)
 
 
 
US$’000
 
 
US$’000
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
Trading and manufacturing
  3,927 
  5,353 
Engineering
  1,791 
  3,462 
Total revenues
  5,718 
  8,815 
 
    
    
Cost of revenues
    
    
Trading and manufacturing
  (2,819)
  (4,123)
Engineering
  (1,280)
  (2,656)
Total cost of revenues
  (4,099)
  (6,779)
Gross profit
  1,619 
  2,036 
 
    
    
Finance costs
  (4)
  - 
Selling and administrative expenses
  (2,341)
  (2,512)
Operating loss
  (726)
  (476)
Interest income
  16 
  47 
Other income, net
  46 
  9 
Gain on disposal of property, plant and equipment
  1,429 
  - 
Equity in income of affiliates
  28 
  43 
 Income / (loss) before income taxes
  793 
  (377)
 
    
    
Income taxes (expense) / credit
  (50)
  1 
Net income / (loss)
  743 
  (376)
 
    
    
Net loss attributable to non-controlling interests
  126 
  96 
Net income / (loss) attributable to Euro Tech Holdings Company Limited’s shareholders
  869 
  (280)
Other comprehensive income / (loss)
    
    
    Net income / (loss)
  743 
  (376)
    Foreign exchange translation
      Adjustments
  (2)
  5 
Comprehensive income / (loss)
  741 
  (371)
Comprehensive loss attributable to non-controlling interests
  136 
  97 
Comprehensive income / (loss) attributable to the Company
  877 
  (274)
 
Net income / (loss) per ordinary share attributable to Euro Tech Holdings Company Limited’s shareholders
 
 
 
 
 
 
- Basic
 $US0.28 
 $US(0.14) 
- Diluted
 $US0.28 
 $US(0.14) 
Weighted average ordinary shares outstanding
    
    
- Basic
  3,092,859 
  2,061,909 
- Diluted
  3,092,859 
  2,061,909 
 
    
    
 
    
    
 
    
    
Dividend per share
 $US0.42 
  
US$ -
 
 
CONTACT:
Euro Tech Holdings Company Limited, Hong Kong
T.C. Leung, Chairman and CEO, or
Jerry Wong, CFO
Tel: 852-2814-0311
Fax: 852-2873-4887
Website: http://www.euro-tech.com