Everbright International Announces 2009 Annual Results

Remarkable Development In the Environmental Energy, Environmental Water And
Alternative Energy Businesses

EBITDA On Recurring Basis Increased 20% To HK$711,609,00
Profit Attributable To Shareholders Increased 10% To HK$371,898,000
Abundant Cash On Hand Of HK$2,024,272,000,
Well Positioned To March Into The Next Round Of Robust Growth

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FINANCIAL HIGHLIGHTS

	For the year ended 31 December
	2009	2008
	HK$'000	HK$'000	Change
Turnover	1,765,996	1,862,509	-5%
Gross Profit	774,922	653,671	19%
EBITDA on recurring basis	711,609	592,727	20%
Non-recurring profit	4,888	51,778	-91%
Income tax expense	99,060	95,161	4%
Profit attributable to equity shareholders	371,898	339,018	10%
Basic earnings per share (HK cents)	11.39	10.80	5%
Total dividends (HK cents)	2.2	1.6	38%

China Everbright International Limited ("Everbright International" or "the Group"), today announced its audited annual results for the year ended 31 December 2009.

In 2009, the Group has grasped the opportunities of the Central Government's favorable policies on renewable energy and endeavored its effort on energy saving and emission reduction, providing green energy, and building better environment. The Group is now developing green environment and alternative energy business with high level of social responsibilities and spirit. During the year under review, the Group shifted focus from developing individual projects to building environmental industrial chains and endeavored to "transform from a traditional environmental company into a new environmental protection enterprise that employs top-notch techniques and high-end technologies". Based on the development strategy of "One Center, Two Supporters and Three Business Sectors", the Group has classified its environmental protection business into three sectors, namely Environmental Energy, Environmental Water and Alternative Energy.

During the year under review, most of the construction projects completed in the first half year which caused a decrease in construction service revenue. However, a number of environmental protection projects of the Group commenced commercial operation, which has expanded the base of its operation service revenue. In 2009, the consolidated turnover of the Group amounted to HK$1,765,996,000, representing a decrease of 5% from HK$1,862,509,000 in 2008. EBITDA on recurring basis was HK$711,609,000, representing a growth of 20% from HK$592,727,000 in 2008. Profit attributable to equity shareholders of the Company for the year was HK$371,898,000, an increase of 10% when compared to HK$339,018,000 of 2008. Basic earnings per share were HK11.39 cents, HK0.59 cent more than HK10.80 cents of last year.

During the year under review, the market exploration and development of the Group has achieved significant progress. The Group had secured ten new environmental protection projects, commanding a total investment of approximately RMB2.8 billion. With the two newly secured environmental protection industrial parks in Zhenjiang and Suqian as well as the signing of the strategic co-operation agreements with six cities, namely Zhenjiang, Suqian and Xinyi of Jiangsu Province, Dangshan and Huaining of Anhui Province and Dezhou of Shandong Province, the projects have been expanded from Jiangsu and Shandong Provinces to Guangdong and Anhui peripheral areas. It also signified the Group's successful achievement in expanding from the southern part to the northern part of Jiangsu Province and the development of new areas in Shandong Province. Moreover, the Group has obtained a major breakthrough in the alternative energy field such as the solar energy and the biomass energy etc. The increasing number of projects and the construction activities entering a two-year peak period will enhance the operating volume and raise the standard of the Group, thereby increasing its construction and operation service revenues. During the year under review, turnover from environmental protection business amounted to HK$1,650,971,000 (construction service revenue: 48%, operation service revenue: 32%, and finance income: 20%), accounting for 93% of the Group's total turnover. EBITDA amounted to HK$634,434,000, an increase of 24% when compared with 2008 and accounting for 85% of total profit on recurring basis.

In 2009, the Group took advantage of the reviving financial market to place shares and raised approximately HK$1,433,035,000. This coupled with the US$200,000,000 10-year loan facility provided by Asian Development Bank ("ADB") have greatly strengthened the Group's financial position. As at 31 December 2009, the Group had cash and bank balances of approximately HK$2,024,272,000 (excluding the ADB loan facility). With abundant financial resources, the Group has a solid foundation for its environmental protection business to march into the next round of robust growth.

Environmental Energy

The environmental energy sector encompasses waste-to-energy projects, industrial solid waste landfill project and environmental protection industrial park being developed. The Group currently has 11 projects. During the year under review, the environmental energy projects of the Group together processed 1,724,000 tonnes of household waste, 22,000 m³ of solid waste and generated on-grid electricity of 365,120,000 kilowatt-hour, representing an increase of 84%, 57% and 96% as compared with last year. The environmental energy projects brought an EBITDA of HK$284,826,000, representing an increase of 3% against last year.

In 2009, the Group secured five waste-to-energy projects including Jinan Waste-to-energy Project, Jiangyin Waste-to-energy Project Phase II, Zhenjiang Waste-to-energy Project, Suqian Waste-to-energy Project and Huidong Waste-to-energy Project. These projects have a total daily waste processing capacity of 4,600 tonnes, which exceeds the total daily waste processing capacity of projects secured in the prior six years. Construction of these environmental protection projects will gradually begin in 2010 and when all works are completed, it will notably raise the leading position of the Group in the environmental protection industry.

Environmental protection industrial park is another environmental energy business which the Group has strived to expand. On the footing of waste-to-energy projects secured in different regions, the Group has moved on to forging stronger ties with local governments on environmental protection projects in terms of centralizing planning of those projects in the mode of the environmental protection industrial park. With centralized management, the projects will enjoy greater economies of scale and synergies. After the successful show case project in Suzhou Environmental Protection Veinous Industrial Park, the Group signed an agreement with the Zhenjiang Municipal Government and the Suqian Municipal Government respectively to build in each locality an environmental protection industrial park to further expand the geographical coverage of the environmental protection industrial park.

Environmental Water

As at 31 December 2009, this sector was made up of 17 waste water treatment projects in Shandong and Jiangsu provinces. During the year under review, the Group's environmental water projects treated 388,012,000 m³ of waste water, representing an increase of 7% as compared with the previous year. The projects brought an EBITDA of HK$338,853,000, representing an increase of 51% against the previous year. The rise in profit was mainly attributable to the growth in operating service revenue by 35% as a result of the increase in waste water treatment fees of Jinan Project and Qingdao Project. The construction service revenue was also increased by 5% as a result of the upgrade works done for the Jinan Project and construction of the Jinan Licheng Project and Jinan Xike Project during the year.

During the year, the Group accomplished the targets set for the environmental water sector. They included acquisition of piping network for the Jiangyin Waste Water Treatment Project, adjustment of water charges in Qingdao Project, overall upgrading of the Jinan Project and construction and operation of the Jinan Licheng Project, assuring the urban areas of Jinan city meet Grade 1A waste water treatment standard. Currently, the Group accounts for 85% of COD emission reduction on waste water treatment in Jinan and Zibo urban areas.

In 2009, the Group secured new projects including the Jinan Xike Waste Water Treatment Project, the Ling County Waste Water Treatment Project and Xinyi BT (Build-Transfer) Waste Water Treatment Project, which is the Group's first BT waste water treatment project. In 2010, the Group secured a new reusable water project in Zibo.

Alternative Energy

In 2009, the Group also identified alternative energy as a key development area for future investment. Currently, the major alternative energy projects secured by the Group included Suzhou Methane-to-energy Project Phase I and Phase II ("Suzhou Methane Project"), the Zibo Waste Water Source Heat Pump Project and Xinyi Straw Cogeneration Project, Dangshan Biomass Power Generation Project and Huaining Solar Photovoltaic Energy Project commanding a total investment of approximately RMB826,000,000.

Suzhou Methane Project, the Group's first alternative energy project in operation, has achieved Gold Standard Voluntary Emission Reduction ("VER") Project registration from Switzerland's Gold Standard Foundation, the first VER project in China. During the year under review, the Suzhou Methane Project supplied 19,830,000 kilowatt-hour of electricity to the power grid and brought an EBITDA of HK$10,990,000, representing an increase of 29% as compared with 2008.

During the year, the Group had successfully obtained the first biomass project, Xinyi Straw Cogeneration Project. The total investment of the project is approximately RMB338,000,000. The designed daily processing capacity of the project is 800 tonnes and the annual processing capacity is 260,000 tonnes. It will be equipped with two 15MW electricity generators and is expected to commence commercial operation in 2012. Securing this project has significant meaning in the development of the alternative energy sector of the Group.

In 2009, the Group has entered into Framework Agreements with Dupont and Huaining County People's Government with respect to Shenzhen photovoltaic energy project and Huaining photovoltaic energy on-grid project (both projects have obtained approval from the National Development and Reform Commission) respectively. The Group has also reached preliminary consent with Dangshan County People's Government with respect to biomass project. All these projects are now proceeding as planned.

Environmental Protection Engineering

Everbright Environmental Protection Engineering (Shenzhen) Limited ("Everbright Environmental Engineering") is the Group's engineering technology platform for environmental protection construction business development in China. It boasts effective control on the quality, standard, technology and efficiency of its projects and has developed a number of excellent projects for the community which are recognized by governments at different level and a good image in the industry. In 2009, Everbright Environmental Engineering had six projects completed and commenced operation. For instance, Changzhou Project underwent a production assessment by an expert team of the Construction Ministry of Suzhou Province. It scored 98 points in overall grade and made Grade A rating. 2010 will be a year in which the Group has the most projects in construction in the environmental protection business. Everbright Environmental Engineering will push forward at full strength the construction of different projects and ensure works progress smoothly and are carried out with effective safety, quality and cost control.

Technological Research and Development

Everbright Environmental Protection Technology Development (Beijing) Limited is the platform of cooperation with technology research institutions, international advance technology transfer and technological research and development of the Group. During the year under review, the Group has submitted applications for 12 research projects and obtained government research and development funding in the total amount of RMB4,720,000. It also obtained 3 invention patents and 3 utility patents. Assessment of 9 other patent applications has entered public inspection stage. The Group worked with academic institutions including Tsinghua University, Tongji University and the Shandong Academy of Sciences on various initiatives including research and development projects, sourcing of government funding for research and organizing seminars on technological applications, etc. In May 2009, the Group and the Shandong Academy of Sciences set up the "Everbright International-Shandong Academy of Sciences Environmental Protection and Energy Saving Engineering Technology Research Institute" in Beijing. The move marked the beginning of cooperation between the environmental protection industry and research institutes in the PRC to equip the industry with locally-made equipment and develop proprietary core technologies.

Infrastructure

During the year under review, the traffic flow of the Qingzhou Bridge continued to grow. The average daily number of standard vehicles crossing the bridge increased to 35,408 or by 5% when compared with 2008. In 2009, the project generated an EBITDA of HK$107,427,000 to the Group, a 9% increase against 2008.

Mr. Chen Xiaoping, Chief Executive Officer of Everbright International, concluded, "The enormous development potentials of the PRC environmental protection market continuously injects power to drive the growth of our business. Looking ahead, new technology, materials and renewable energy industries will be our key pillars to support sustainable development of the Group. Riding on the branding of "Everbright Environment", together with the strong influence and leading presence in the aspects of alternative energy resources, market demand and development of alternative energy industry in Jiangsu and Shandong province within the country, we will commence new projects and gradually establish our branding effect to enhance our core competitiveness in the market. In addition, the Group will increase investment and accelerate the implementation of projects in Yangtze River Delta, Pearl River Delta and Bohai Costal Area, by following the principles of "Implementing projects with one success followed by another, so as to further consolidate our leading presence in the environmental protection industry and generate better returns for shareholders."