Everbright International Announces 2010 Interim Results

Consolidate the Development in Environmental Protection Business
Speed up the Entering into Alternative Energy Sector

EBITDA On Recurring Basis Increased 20% To HK$453,628,000
Profit Attributable To Equity Shareholders Increased 24% To HK$245,134,000

Please click here to download the presentation materials for 2009 Annual Results

FINANCIAL HIGHLIGHTS (unaudited)

	For the six months ended
	2010	2009
	HK$'000	HK$'000	Change
Turnover	959,876	1,101,610	-13%
Gross Profit	487,747	421,477	16%
EBITDA on recurring basis	453,628	379,267	20%
Profit attributable to equity shareholders	245,134	196,981	24%
Basic earnings per share (HK cents)	6.73	6.26	8%
Interim dividend per share (HK cent)	1	1	-

China Everbright International Limited ("Everbright International" or "the Group") today announced its unaudited interim results for the six months ended 30 June 2010.

The year 2010 is witnessing the most project construction ever undertaken by the Group in its history. In the first half year, many construction projects have commenced according to schedule. The Group expects a surge of construction service revenue as a result of construction works in full swing in the second half year. In addition, with the number of operating projects increasing, the operation service revenue is also forming a solid revenue base of the Group. During the period under review, the consolidated turnover of the Group amounted to HK$959,876,000, representing a decrease of 13% from HK$1,101,610,000 in the same period last year. The drop in turnover was mainly due to the decline of the construction service revenue during the period as compared to that in the same period last year. During the period, the EBITDA on recurring basis amounted to HK$453,628,000, representing an increase of 20% from HK$379,267,000 in the last corresponding period. Profit attributable to equity shareholders during the period was HK$245,134,000, representing a growth of 24% as compared to the same period last year. Basic earnings per share for the first half of 2010 were HK6.73 cents, 0.47 cent more than HK6.26 cents in the last corresponding period.

During the period under review, the turnover from environmental energy, alternative energy and environmental water projects reached HK$890,887,000 (construction service revenue: 44%, operation service revenue: 34%, and finance income: 22%), a decrease of 15% when compared with the same period in 2009 and accounting for 93% of the Group's total turnover, 2 percentage points lower than in 2009. The turnover decreased as construction of certain new projects was still in the initial stage which resulted in lower construction service revenue to be recognized during the period. However, the continuing growth of profit contribution from the operating projects enhanced the overall profit of environmental protection and alternative energy businesses. During the period under review, EBITDA of the environmental protection and alternative energy businesses amounted to HK$397,670,000, an increase of 15% when compared with the last corresponding period and accounting for 8 8% of the Group's total EBITDA on recurring basis.

During the period under review, the Group continued to explore its environmental protection and alternative energy businesses actively. The Group secured 9 new projects, commanding a total investment of approximately RMB 692,000,000. Currently, the Group has 41 environmental protection and alternative energy projects commanding a total investment of approximately RMB8,5 09,000,000 (equivalent to approximately HK$9,7 15,000,000). The investment cost of projects that have completed construction amounted to approximately RMB5,2 14,000,000 (equivalent to approximately HK$ 5,953,000,000) while the investment in projects under construction was about RMB2,77 5,000,000 (equivalent to approximately HK$3,16 8,000,000). For projects yet to commence construction, the estimated investment cost is approximately RMB520,000,000 (equivalent to approximately HK$594,000,000). The total designed annual processing capacity of the projects of the Group is approximately 3,200,000 tonnes of household waste, approximately 38,000 m³ of other waste, approximately 51 0,000 tonnes of agricultural and forestry waste, together capable of supplying on-grid electricity of approximately 1,275,000,000 kilowatt-hours a year. The designed annual waste water treatment capacity of all the waste water treatment projects is approximately 570,000,000 m³.

Environmental Energy

As at 30 June 2010, the Group's environmental energy business comprised 10 waste-to-energy projects, 5 environmental protection industrial parks and 2 industrial solid waste landfill projects. The designed total capacity included an annual household waste processing capacity of approximately 3,200,000 tonnes which is capable of producing an annual on-grid electricity of approximately 900,000,000 kilowatt-hours. The industrial waste storage capacity is approximately 400,000 m³. During the period under review, the environmental energy projects of the Group together processed 922,000 tonnes of household waste, 19,000 m³ of solid waste and generated on-grid electricity of 215,155,000 kilowatt-hours, representing an increase of 32%, 164% and 47% against the same period last year. The environmental energy projects brought an EBITDA of HK$212,750,000, representing an increase of 35% against the last corresponding period.

During the period under review, the Group secured to invest in the Zhenjiang Solid Waste Landfill Project which is the only landfill in Zhenjiang City that processes hazardous waste. The capacity of Phase I of the project is 200,000 m³ with an investment of approximately HK$100,000,000, and an estimated annual processing capacity of 18,000 m³. The project is expected to commence construction by the fourth quarter of 2010.

During the period under review, the Group actively developed industrial parks model in environmental protection business. Except increasing its investment in Suzhou Industrial Park, the Group is also to invest and construct veinous industrial parks in Changzhou of Jiangsu Province and Yantai of Shandong Province, its fourth and fifth industrial parks after similar facilities in Suzhou, Zhenjiang and Suqian, all in Jiangsu Province.

Environmental Water

The Group's environmental water businesses comprised 20 projects across Qingdao , Zibo, Jinan, Boxing, Zhoucun, Ling County , Licheng in Shandong Province and Jiangyin and Xinyi in Jiangsu Province. Among these, there are 18 waste water treatment projects and 2 reusable water projects. During the period under review, the environmental water projects treated 212,093,000 m³ of waste water, representing an increase of 36% as compared with the same period last year. These operations brought an EBITDA of HK$179,334,000, representing a decrease of 1% against the last corresponding period. The slight decrease in profit was mainly attributable to the decline in construction service revenue which offset the growth of profit contribution from the operating projects.

The review period marked the beginning of the Group's efforts to cover reusable water projects. Firstly, the Group signed a "Reusable Water Supply Agreement" with Huadian Zibo Power Company Limited to supply supplementary water for power plant boilers. The project involved a total investment of RMB55,000,000, and it is designed to process 400 m³ of water an hour. It is expected to begin trial run by the end of this year. In May 2010, the Group entered into an agreement in respect of the reusable water project with Shandong Luneng Development Group to provide reusable water as recycled chilled water, commanding a total investment of RMB15,000,000 . The project has an annual designed waste water treatment capacity of 6,000,000 m³. Construction of the project commenced in July and is expected to start trial run at the year end.

The Xike Waste Water Project in Jinan City, Shan dong Province, has commenced commercial operation in June 2010. Together with the existing Jinan Waste Water Treatment Project Plant 1 and Plant 2 and the Jinan Licheng waste water treatment plant, the Group has reached a total designed daily treatment capacity of 630,000 m³ in Jinan City. These plants have reached the Grade 1A national waste water discharge standard. Besides, Ling County Plant 2 Project in Dezhou city, Shandong Province, has also commenced commercial operation in the same period.

In addition to self-built and self-operated projects, the Group has also signed a Build and Transfer ("BT") contract in January 2010 for construction of Phase I of a waste water treatment plant in the Xinyi Economic Development Zone in Jiangsu Province. The project commands a total investment of approximately RMB62,150,000 and has a daily designed waste water treatment capacity of 10,000 m³. The Group is responsible for the construction and upon completion in the fourth quarter of 2010, the project will be transferred to the Xinyi Government.

Alternative Energy

As at 30 June 2010, the Group has already secured 13 alternative energy projects with a total designed annual power generation capacity of approximately 375,000,000 kilowatt-hours. 9 of these are independent projects with a total investment of approximately RMB909,000,000 . During the period under review, the Methane Project supplied 12,918,000 kilowatt-hours of electricity to the power grid and brought an EBITDA of HK$6,307,000, representing an increase of 16% as compared with the same period last year.

Currently, the Group has secured to develop 2 biomass power generation projects, including the Xinyi Straw Cogeneration Project and the Dangshan Biomass Power Generation Project at a total investment of approximately RMB650,000,000 with an annual processing capacity of approximately 510,000 tonnes of agricultural and forestry waste.

Meanwhile, the Group stepped up its effort in exploring solar photovoltaic power projects, which include the Huaining Photovoltaic Energy Project, the Zhenjiang Photovoltaic Energy Project and the Everbright Environmental-DuPont Apollo Photovoltaic Energy Golden Sun Pilot Project. The Group first invested RMB50,470,000 in Phase I of the Huaining Photovoltaic Energy Project to build a 2MWp photovoltaic power station with four 500kWp photovoltaic power generation sub-systems, and is expected to be completed and to commence operation by the end of 2010. The Zhenjiang Photovoltaic Energy Project is the Group's first photovoltaic energy project in Jiangsu Province. It has a capacity of 3.5 MWp, and the total investment is approximately RMB73,490,000. The term of operation covers 25 years, and is expected to be completed and to commence operation by the end of this year. Besides, the Everbright Environmental-DuPont Apollo Photovoltaic Energy Golden Sun Pilot Project is to be built on the rooftop of the DuPont plant at the DuPont Photovoltaic Energy Technology Industrial Park in Dongpian District, Guangming New District, Shenzhen. With an operation term of 25 years, the energy generation station will have a total installed capacity of approximately 1,300 kilowatt-hours and is expected to be completed in October this year.

Environmental Protection Engineering

focused on the construction of 10 major projects including 5 environmental energy projects in Jinan, Jiangyin (Phase II), Zhenjiang, Suqian and Huidong , 2 alternative energy projects in Xinyi and Dangshan and 3 waste water treatment projects in Jinan Xike, Xinyi and Ling County. 2 waste water treatment projects in Jinan Xike and Ling County have been completed in the first half of the year. 4 environmental energy projects in Jinan, Jiangyin (Phase II), Zhenjiang and Suqian and the Xinyi Waste Water Project, the Jinan Reusable Water Project and Zibo Reusable Water Project have commenced construction. In the second half of the year, the Group will put great effort to commence construction work of other projects.

Environmental Technological Development

In 2010, the Group identified 10 major research and development topics including domestically developed grate furnaces and automatic control systems; standardisation of design of waste-to-energy and waste water treatment projects; technologies on waste-to-energy and waste water treatment in small to medium cities; technology application on reusable water; solar energy, wind power and biomass power generation; and establishment of a sludge treatment and waste leachate treatment centre. Among these, the waste water source heat pump project in Zibo, and the leachate-to-energy projects in Zhenjiang and Jinan have started construction.

Infrastructure Investment

In the first half of 2010, the average daily number of standard vehicles crossing the bridge was increased by 23% to 42,092 as compared with the last corresponding period. During the period under review, the project generated an EBITDA of HK$62,406,000 to the Group, an increase of 18% as compared with the last corresponding period. With the gradual recovery of the global economy bringing an increase in the number of trucks, it is expected that the traffic volume of Qingzhou Bridge will steadily keep increasing.

Mr. Chen Xiaoping concluded, "At present, new businesses such as alternative energy, new materials, energy conservation and environmental protection have been categorized as strategic new industries that are supported by favorable government policies. Focusing on alternative energy and environmental protection, we will seize opportunities to actively develop these businesses. Looking ahead, the Group intends to develop the wind power segment on top of the solar energy, biomass power generation and methane-to-energy businesses. In addition , the Group will concentrate on low-carbon, ecological, environmentally friendly, energy conservation and recycling businesses. Guided by the principle of ‘implementing projects with one success followed by another' and the philosophy of ‘Integrity, efficiency, innovation and pragmatism', we will continue to expand our presence in the country's environmental protection and alternative energy industries and consolidate our leading position in the environmental protection sector, with the aim of generating sustainable return for shareholders."