Euro Tech Holdings Company Limited Reports Interim Results For The Six Months Ended June 30, 2022

HONG KONG, Dec. 24, 2022 /PRNewswire/ -- Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported its unaudited financial results for the six months ended June 30, 2022.

The Company's business for the six months ended June 30, 2022 ("1H 2022") was severely affected by the COVID-19 pandemic-control measures in China and Hong Kong, especially the strict lockdown measures imposed in Shanghai from March to May 2022.

The Company's revenues for 1H 2022 were US$6,730,000, a 33.1% decrease as compared to  US$10,054,000 for the six months ended June 30, 2021 ("1H 2021"). Revenues from trading and manufacturing activities, and engineering activities decreased by US$305,000 and US$3,019,000, respectively.

Gross profits decreased by 37.5% to US$1,888,000 for 1H 2022 as compared to US$3,022,000 for 1H 2021. The decrease was primarily due to the decrease in revenues from engineering activities which is of higher gross profit margin %.

Selling and administrative expenses decreased by US$142,000 to US$2,372,000 for 1H 2022 as compared to US$2,514,000 for 1H 2021. The decrease was principally due to the decrease in selling expenses resulting from the decrease in revenues.

The Company's net loss for 1H 2022 was US$184,000 as compared to net income of US$490,000 for 1H 2021 resulting from decrease in revenues.

Mr. David, CEO of the company commented,

"China's severe "zero-COVID" policy and the recent relaxation of COVID policy has significantly affected our business performance for 2022. China's economy had slowed amid macroeconomic headwinds and a slumping property market. Global markets have been falling in the wake of the Covid-19 pandemic, which has caused global supply chain disruption for many industries. Russia-Ukraine war also set off an inflationary spiral for many countries, leading to higher interest rates. Weak overseas demand and the strict zero-COVID policy combined to reduce our sales orders. The market could still be very uncertain and challenging due to the high interest rates, global economic slowdown and the likelihood of a recession in major economies.

In view of the poor economic environment, we have ceased the business operations of Shanghai Euro Tech Limited ("SET") on September 30, 2022 because SET has suffered loss for the past few years during which it focused on the manufacturing of analytical and testing instruments.

Although the overall business has been dropped in the first half year of 2022, there are more shipowners and distributors in overseas and China purchasing our Ballast Water Treatment Systems ("BWTS") than in year 2021.

We have been receiving repeated orders from Thailand and Dubai for BWTS and industrial wastewater business from a respectful food and beverage clients from USA.

We are still positive to see more sales contracts from both BWTS and industrial waste water treatment activities, especially after the transition period of easing COVID policy in China and a new biodiversity policy (i.e. which is in line with new global framework of United Nation COP 15) has been launched in China recently."

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, 2021.

EURO TECH HOLDINGS COMPANY LIMITED

CONSOLIDATED BALANCE SHEETS

 

EURO TECH HOLDINGS COMPANY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021