ZhongDe Waste Technology AG

Earnings Release • Jul 17, 2012

News Details

Corporate | 17 July 2012 09:19

ZhongDe Waste Technology AG: Weak 2011 results due to project delays

ZhongDe Waste Technology AG / Key word(s): Final Results

17.07.2012 / 09:19

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Financial results 2011

ZhongDe Waste Technology AG: Weak 2011 results due to project delays

* Revenues decreased by 3% to EUR 32.4 million
* Net loss of EUR 10.7 million
* Strong cash position of EUR 117.3 million for future investments

Frankfurt, 17th July 2012 - The results of fiscal year 2011 of ZhongDe
Waste Technology AG ('ZhongDe', 'the Company', Ticker symbol 'ZEF') were
influenced by the delays in the completion of energy-from-waste plants
currently under construction. According to the audited financial figures
for the financial year 2011, revenues decreased by 3.0% from EUR 33.4
million in 2010 to 32.4 million in 2011. The Company realized a net loss of
EUR 10.7 million. Nevertheless, ZhongDe's cash position still remained very
strong, amounting to EUR 117.3 million, and even increased by 40% compared
to the previous year.

The weakening global economic situation also affected the Chinese economy.
ZhongDe reacted to the changing domestic market situation by further
strengthening its focus on large-size BOT (Build-Operate-Transfer)
projects, supported by the Company's project financing strategy. With
additional bank loans and optimized standardization of BOT projects,
ZhongDe is well prepared for increasing future investments in this sector.

Total revenues amounted to EUR 32.4 million in the financial year 2011,
compared to EUR 33.4 million in 2010. This decrease of 3.0% was mainly
influenced by the fact, that the construction progress of the current EPC
(Engineering, Procurement and Construction) and BOT projects was slower
than expected - mainly due to delays in approvals of the local authorities
or other internal as well as external factors. On the other hand, the
market for small-sized incinerators recovered slowly: ZhongDe sold four
small-sized incinerators in 2011, compared to two in 2010.

ZhongDe's gross profit reached EUR 4.1 million in 2011, representing a
decrease of EUR 3.3 million or 44% year-on-year. Furthermore, increased
administrative expenses and other expenses (e.g. provisions) led to an EBIT
of EUR -7.7 million in 2011 (2010: EUR 0.8 million). The net profit
amounted to EUR -10.7 million compared to EUR -1.0 million in 2010.

Outlook

2011 was a very challenging transition period for ZhongDe and this
transition will continually influence its business development. ZhongDe's
financial performance in 2012 and 2013 will be affected by the possibility
of completing its on-going EPC and BOT construction projects on time.
According to the experiences made in the past, the fulfilment of the
planning depends strongly on several internal and external factors, which
are difficult to foresee. Nevertheless, ZhongDe's Management Board expects
to finalize its current BOT project Zhoukou until the end of the financial
year 2012. This will contribute to the Group's earnings.

Furthermore the company expects to sign one or two new projects contracts
in 2012, which will bring significant growth of order intake.

'2011 was a difficult year for our Company. Our business was affected not
only by the worldwide economic situation, but also by the Chinese market
situation. However, looking ahead to the second half of 2012 and 2013, we
expect to have further benefit from the favorable economic environment for
eco-friendly waste disposal as well as from the growing demand for our
waste-to-energy plants - both in China and in Asia. In addition, Chinese
Government has enhanced the stimulation of green industries within the
five-year-plan and the demand for waste-to-energy plants is increasing
sustainably. Hence we're convinced, that our Company can show an improved
financial performance in the coming years', commented Mr. Zefeng Chen, CEO
of ZhongDe Waste Technology AG.

According to the current planning and by assuming that no unforeseeable
events will happen, the Company expects, ZhongDe Group can generate a
better result in revenues as well as a higher gross profit margin in 2012
compared to 2011. Furthermore, operating expenses are expected to be lower
in 2012 compared to 2011. In 2013, ZhongDe expects additional improvements
in relation to the forecast for the current financial year 2012.

About ZhongDe Group

ZhongDe Group designs, invests, constructs, finances and operates
waste-to-energy incineration plants generating electricity from the
disposal of solid municipal and industrial waste. ZhongDe realises either
EPC (Engineering, Procurement and Construction) or BOT (Build, Operate and
Transfer) projects, focusing on large-scale plants with waste disposal
capacities of around 1,000 tons per day. Since 1996, ZhongDe Group has
installed approximately 200 waste incinerators in 13 provinces and more
than 80 waste incinerators in the last three financial years alone. ZhongDe
is one of the leading players in the project development and operation of
large-size waste-to-energy plants in China.

Contact

ZhongDe Waste Technolgy AG
William Jiuhua Wang
Executive Director and CFO
E-Mail: william.jw@zhongdetech.com

Ying Sun
Herriotstr. 1
60528 Frankfurt am Main
T: +49 69 67733 172
F: +49 69 67733 200
E-Mail: ying.sun@zhongde-ag.de

Kirchhoff Consult AG
Nicole Schüttforth
Investor Relations Consultant
T: +49 40 60 91 86 64
F: +49 40 60 91 86 60
E-Mail: nicole.schuettforth@kirchhoff.de

End of Corporate News

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Language: English
Company: ZhongDe Waste Technology AG
Herriotstraße 1
60528 Frankfurt am Main
Germany
Phone: + 49 69 67733 172
Fax: + 49 69 67733 200
E-mail: ying.sun@zhongde-ag.de
Internet: www.zhongde-ag.de
ISIN: DE000ZDWT018
WKN: ZDWT01
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart

End of News DGAP News-Service

178024 17.07.2012