CITIC Limited — Interim / Quarterly Report 2016

Apr 28, 2016

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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OVERSEAS REGULATORY ANNOUNCEMENTS

(These overseas regulatory announcements are issued pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

The following announcements are released by CITIC Envirotech Ltd. (a subsidiary of CITIC Limited) to Singapore Exchange Limited on 28 April 2016:-

• (1) First Quarter Financial Statement & Dividend Announcement for the Period Ended 31 March 2016; and

• (2) Media release – CITIC Envirotech Ltd recorded a 39.1% increase in net profit of S$12.3 million for the first quarter ended 31 March 2016.

Hong Kong, 28 April 2016

As at the date of this announcement, the executive directors of CITIC Limited are Mr Chang Zhenming (Chairman), Mr Wang Jiong, Ms Li Qingping and Mr Pu Jian; the non-executive directors of CITIC Limited are Mr Yang Jinming, Mr Liu Yeqiao, Mr Song Kangle, Ms Yan Shuqin, Mr Liu Zhongyuan, Mr Yang Xiaoping and Mr Li Rucheng; and the independent non-executive directors of CITIC Limited are Mr Francis Siu Wai Keung, Dr Xu Jinwu, Mr Anthony Francis Neoh, Ms Lee Boo Jin, Mr Noriharu Fujita and Mr Paul Chow Man Yiu.

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CITIC ENVIROTECH LTD. (Company registration number: 200306466G)

Listed companies must provide the information required by Appendix 7.2 of the Listing Manual. Adequate disclosure should be given to explain any material extraordinary item either as a footnote of the material extraordinary item or in the "Review of the performance of the group".

First Quarter Financial Statement & Dividend Announcement for the Period Ended 31 March 2016

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) A statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.

	Group 3 months ended 31/3/2016 $’000	Group 3 months ended 31/3/2015 $’000	% Increase/ (Decrease)
Revenue Other income Changes in inventories Material purchased, consumables used and subcontractors’ fees Employee benefits expense Depreciation and amortisation expenses Other operating expenses Finance costs Share of loss of associates Profit before income tax Income tax expense Net profit for the period	99,467 1,559 322 (40,142) (11,554) (7,277) (14,339) (10,659) (142)	61,218 7,178 (377) (19,477) (9,934) (6,657) (9,502) (8,287) -
	17,235 (4,922)	14,162 (5,307)

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	Group 3 months ended 31/3/2016 $’000	Group 3 months ended 31/3/2015 $’000	% Increase/ (Decrease)
Profit attributable to: Owners of the Company Non-controlling interests Profit for the period Fair value change in Available-for-sale investment Currency translation (loss) profit Total other comprehensive expense for the period Total comprehensive expense attributable to: Owners of the Company Non-controlling interests	12,061 252	7,537 1,318	60.0 (80.9) 39.1 N/M N/M 6,338.5 746.5 (80.9) 6,338.5
	12,313	8,855
	- (24,868)	(17,252) 8,202
	(12,555)	(195)
	(12,807) 252	(1,513) 1,318
Total comprehensive expense for theperiod	(12,555)	(195)

1(a)(ii) Breakdown to statement of comprehensive income

	Group 3 months ended 31/3/2016 $’000	Group 3 months ended 31/3/2015 $’000	% Increase/ (Decrease)
Employee share option expense Interest expense on bank borrowings and finance leases Interest expense on MTN bond Finance cost on convertible bonds Interest income Foreign currency exchange loss (gain)	2,310 5,658 5,001 - (823) 4,460	3,236 3,482 1,814 2,991 (575) (3,757)	(28.6) 62.5 175.7 N/M 43.1 N/M

N/M: Not meaningful

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1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

	Group 31/3/2016 $’000	Group 31/12/2015 $’000	Company 31/3/2016 $’000	Company 31/12/2015 $’000
ASSETS
Current assets:
Cash and bank balances	332,034	540,466	95,145	198,024
Trade receivables	244,256	218,323	-	-
Service concession receivables	4,112	4,342	-	-
Other receivables and prepayments	136,133	163,691	817,242	732,231
Inventories	10,892	10,570	-	-
Prepaid leases	731	766	-	-
	728,158	938,158	912,387	930,255
Assets classified as held for sale	30,309	34,582	-	-
Total current assets	758,467	972,740	912,387	930,255
Non-current assets:
Trade receivables	27,550	4,687	-	-
Service concession receivables	620,373	504,819	-	-
Other receivables and prepayments	15,765	16,293	-	-
Prepaid leases	39,360	36,704	-	-
Subsidiaries	-	-	276,847	279,023
Associates	10,440	10,608	10,586	10,611
Property, plant and equipment	160,482	148,871	232	249
Goodwill	255,365	255,365	-	-
Intangible assets	212,064	222,282	200	200
Deferred tax assets	-	517	-	-
Total non-current assets	1,341,399	1,200,146	287,865	290,083
Total assets	2,099,866	2,172,886	1,200,252	1,220,338
LIABILITIES AND EQUITY
Current liabilities:
Bank loans	75,933	237,141	-	-
Medium term notes	98,022	97,700	98,022	97,700
Trade payables	166,453	140,708	-	-
Other payables	58,118	52,641	28,168	21,071
Finance leases	177	180	99	100
Income tax payable	25,751	25,054	-	-
	424,454	553,424	126,289	118,871
Non-current liabilities held for sale	26,791	31,238	-	-
Total current liabilities	451,245	584,662	126,289	118,871
Non-current liabilities:
Bank loans	261,129	188,610	-	-
Finance leases	231	256	-	-
Medium term notes	222,468	222,226	222,468	222,226
Deferred tax liabilities	37,621	36,376	-	-
Total non-current liabilities	521,449	447,468	222,468	222,226

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	Group 31/3/2016 $’000	Group 31/12/2015 $’000	Company 31/3/2016 $’000	Company 31/12/2015 $’000
Capital and reserves:
Share capital	607,973	607,973	607,973	607,973
Perpetual capital securities	242,055	242,055	242,055	242,055
General reserve	5,330	5,330	-	-
Capital reserve	2,096	2,096	-	-
Share option reserve	22,755	20,445	22,755	20,445
Currency translation reserve	5,010	29,878	(8,781)	4,415
Retained earnings	202,693	193,971	(12,507)	4,353
Equity attributable to owners of the Company	1,087,912	1,101,748	851,495	879,241
Non-controlling interests	39,260	39,008	-	-
Total equity	1,127,172	1,140,756	851,495	879,241
Total liabilities and equity	2,099,866	2,172,886	1,200,252	1,220,338

1(b)(ii) Aggregate amount of group’s borrowings and debt securities.

Amount repayable in one year or less, or on demand

As at 31/3/2016		As at	31/12/2015
Secured	Unsecured	Secured	Unsecured
$’000	$’000	$’000	$’000
72,928	101,204	234,139	100,882

Amount repayable after one year

As at 31/3/2016		As at	31/12/2015
Secured	Unsecured	Secured	Unsecured
$’000	$’000	$’000	$’000
246,306	237,522	173,813	237,279

Details of any collateral

1. The finance leases of $408,000 (31 December 2015: $436,000) is secured over the Group’s motor vehicles.

2. The bank loans of $318,826,000 (31 December 2015: $407,516,000) are secured over the concession receivables, intangible assets, treatment plants, prepaid lease and leasehold buildings of its subsidiaries.

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1(c) A statement of cash flow (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

	Group 3 months ended 31/3/2016 $’000	Group 3 months ended 31/3/2015 $’000
Operating activities
Profit before income tax	17,235	14,162
Adjustments for:
Interest income	(823)	(575)
Interest expense	10,659	8,287
Share of loss of associates	142	-
Depreciation and amortisation expense	7,277	6,657
Share option expense	2,310	3,236
Exchange differences arising on foreign currency translation	(16,198)	12,483
Operating profit before working capital changes	**20,602 **	44,250
Trade receivables	(54,317)	(14)
Other receivables and prepayments	37,473	9,536
Inventories	(322)	12,535
Trade payables	31,064	(14,945)
Other payables	(15,546)	(67,136)
Cash generated from/(used in) operations	**18,954 **	(15,774)
Interest received	823	575
Interest paid	(3,440)	(9,873)
Income tax paid	(2,633)	(625)
Net cash from/(used in) operating activities	**13,704 **	(25,697)
Investing activities
Net cash outflow on acquisition of subsidiary	-	34,597
Addition to service concession receivables	(129,836)	(30,342)
Addition to intangible assets	(1,773)	(2,537)
Purchase of property, plant and equipment	(15,177)	(3,433)
Net cash used in investing activities	(146,786)	(1,715)

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	Group 3 months ended 31/3/2016 $’000	Group 3 months ended 31/3/2015 $’000
Financing activities
New bank loans raised	83,778	39,955
Repayment of obligations under finance lease	(27)	(8)
Repayment of bank borrowings	(162,141)	(15,244)
Net cash (used in)/from financing activities	(78,390)	24,703
Net decrease in cash and cash equivalents	(211,472)	(2,709)
Cash and cash equivalents at beginning of period	540,466	116,335
Net effect of exchange rate changes on the balance and cash held in foreign currencies	3,040	131
Cash and cash equivalents at end of period	332,034	113,757

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1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders.

		Share capital $’000	Perpetual capital securities $’000	General reserve $’000	Capital reserve $’000	Share option reserves $’000	Convertible bonds reserves $’000	Currency translation reserve $’000	Retained earnings $’000	Total equity attributable to owners of the Company $’000	Non controlling interests $’000	Total equity $’000
	Group At 1 January 2016 Total comprehensive income for the period Recognition of share-based payment Dividend payable At 31 March 2016	607,973 - - -	242,055 - -	5,330 - - -	2,096 - - -	20,445 - 2,310 -	- - -	29,878 (24,868) - -	193,971 12,061 - (3,339)	1,101,748 (12,807) 2,310 (3,339)	39,008 252 - -	1,140,756 (12,555) 2,310 (3,339)
		607,973	242,055	5,330	2,096	22,755	-	5,010	202,693	1,087,912	39,260	1,127,172

		Share capital $’000	General reserve $’000	Capital reserve $’000	Share option reserves $’000	Convertible bonds reserves $’000	Fair value reserve $’000	Currency translation reserve $’000	Retained earnings $’000	Total equity attributable to owners of the Company $’000	Non controlling interests $’000	Total equity $’000
	Group At 1 January 2015 Total comprehensive income for the period Acquisition of subsidiaries Recognition of share based payment Issuance of shares on conversion of convertible bonds Issuance of shares on exercise of the ESOS Dividends At 31 March 2015	151,325 - 236,375 - 92,975 3,450 -	4,410 - 59 - - - -	- - 2,096 - - - -	7,766 - - 7,109 - (1,360) -	22,520 - - - (13,813) - -	17,252 (17,252) - - - - -	765 31,955 2,212 - - - -	104,287 59,268 - - - - (2,739)	308,325 73,971 240,742 7,109 79,162 2,090 (2,739)	10,882 3,163 18,640 - - - -	319,207 77,134 259,382 7,109 79,162 2,090 (2,739)
		484,125	4,469	2,096	13,515	8,707	-	34,932	160,816	708,660	32,685	741,345

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		Share capital $’000	Perpetual capital securities $’000	Share option reserve $’000	Convertible bonds reserves $’000	Currency translation reserve $’000	Retained earnings $’000	Total $’000
	Company At 1 January 2016 Total comprehensive income for the period Recognition of share- based payment Dividends At 31 March 2016
		607,973 - - -	242,055 - - -	20,445 - 2,310 -	- - - -	4,415 (13,196) - -	4,353 (13,521) - (3,339)	879,241 (26,717) 2,310 (3,339)
		607,973	242,055	22,755	-	(8,781)	(12,507)	851,495

		Share capital $’000	Share option reserve $’000	Fair value reserve $’000	Convertible bonds reserves $’000	Currency translation reserve $’000	Retained earnings $’000	Total $’000
	Company At 1 January 2015 Total comprehensive income for the period Recognition of share- based payment Acquisition of subsidiaries Issuance of shares on conversion of convertible bonds Issuance of shares on exercise of ESOS Dividend At 31 March 2015
		151,325 - - 236,375 92,975 3,450 -	7,766 - 7,109 - - (1,360) -	17,252 (17,252) - - - - -	22,520 - - - (13,813) - -	802 18,137 - - - - -	3,594 5,518 - - - - (2,739)	203,259 6,403 7,109 236,375 79,162 2,090 (2,739)
		484,125	13,515	-	8,707	18,939	6,373	531,659

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• 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

The total number of shares that may be issued on conversion of all the outstanding convertibles bonds and employee shares options were Nil (31 March 2015: 117,926,189) and 53,875,500 (31 March 2015: 70,550,000) respectively.

• 1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

	31/3/2016	31/12/2015
Total number of issues shares (‘000)	1,127,765	1,127,765

The company does not have any treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

There were no sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.

The figures have not been audited or reviewed.

3. Where the figures have been audited or reviewed, the auditors’ report (including any qualifications or emphasis of a matter).

Not applicable.

4. Whether the same accounting policies and methods of computation as in the issuer’s most recently audited annual financial statements have been applied.

The accounting policies and methods of computation are the same as in the Company’s audited consolidated financial statements for the financial period ended 31 December 2015.

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

There is no change in the accounting policies and methods of computation.

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6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

	Group 31/3/2016	Group 31/3/2015
Net profit attributable to shareholders of the Company ($’000)	12,061	7,537
Weighted average number of shares in issue (in‘000) for computation of Basic EPS	1,127,765	921,170
Earnings per share (cents)-Basic	1.07	0.82
Weighted average number of shares in issue (in‘000) for computation of Diluted EPS	1,181,641	1,109,646
Earnings per share (cents)–Diluted	1.02	0.68
Adjusted EPS	Group 31/3/2016	Group 31/3/2015
Net profit attributable to shareholders of the Company adjusted for dividends attributable to perpetual capital securities ($’000)	8,722	7,537
Weighted average number of shares in issue (in ‘000) for computation of Basic EPS	1,127,765	921,170
Earnings per share (cents)-Basic	0.77	0.82
Weighted average number of shares in issue (in ‘000) for computation of Diluted EPS	1,181,641	1,109,646
Earnings pershare (cents)– Diluted	0.74	0.68

For the purpose of calculating diluted EPS, assumption was made that all the employee share options and convertible bonds issued will be converted to ordinary shares.

7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the:-

• (a) current financial period reported on; and

• (b) immediately preceding financial year.

	Group 31/3/2016	Group 31/12/2015	Company 31/3/2016	Company 31/12/2015
Net asset value ($’000)	1,127,172	1,140,756	851,495	879,241
Net asset value per share (cents)	99.95	101.15	75.50	77.96

The net asset value per share is calculated based on the issued share capital of 1,127,765,088 (31 December 2015: 1,127,765,088).

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group’s business. It must include a discussion of the following:(a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and

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(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.

Statement of comprehensive income

The Group’s revenue for the current period was $99.5 million, which was $38.3 million or 62.5% higher than last corresponding period ended 31 March 2015 of $61.2 million. The breakdown of the revenue was as follows:

	Group 3 months ended 31/3/2016 $’million	Group 3 months ended 31/3/2015 $’million	% increase/ (decrease)
Engineering revenue	41.4	20.7	100.0
Treatment revenue	36.0	28.6	25.9
Membrane sale	22.1	11.9	85.7
Total	99.5	61.2	62.5

The increase was mainly due to the increase in engineering business from $20.7 million to $41.4 million, representing an increase of $20.7 million or 100.0%; and membrane sale from $11.9 million to $22.1 million, representing an increase of $10.2 million or 85.7%.

Other income was $1.6 million, which was 5.6 million or 78.3% lower than last corresponding period ended 31 March 2015 of $7.2 million. The decrease was mainly due to the net foreign exchange gain of $3.8 million (31 March 2016: Nil) recorded in the last corresponding period ended 31 March 2015.

Gross profit analysis for engineering and membrane segments

	Group 3 months ended 31/3/2016 $’million	Group 3 months ended 31/3/2015 $’million
Engineering revenue	41.4	20.7
Membrane sale	22.1	11.9
Total	63.5	32.6
Changes in inventories	0.3	(0.4)
Material purchased, consumables used and subcontractors’ fees	(40.1)	(19.5)
Gross profit	23.7	12.7
GP margin (%)	37.3%	39.0%

Materials purchased, consumables used and subcontractors’ fees increased to $40.1 million from $19.5 million, representing an increase of $20.6 million or 106.1% as compared to the last corresponding period ended 31 March 2015. The increase was consistent with the increase in engineering revenue and membrane sale from $32.6 million to $63.5 million, representing an increase of $30.9 million or 94.8% as compared to the last corresponding period ended 31 March 2015.

Employee benefits expense increased to $11.6 million from $9.9 million, representing an increase of $1.7 million or 16.3% as compared to the last corresponding period ended 31 March 2015. The increase was mainly due to the additional staff strength for the operation and maintenance of the new treatment plants.

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Other operating expenses increased to $14.3 million from $9.5 million, representing an increase of $4.8 million or 50.9% as compared to the last corresponding period ended 31 March 2015. The increase was mainly due to the net foreign exchange loss of $4.5 million (31 March 2015: Nil) recorded in the current period ended 31 March 2016.

Finance costs increased from $8.3 million to $10.7 million, representing an increase of $2.4 million or 28.6% as compared to the last corresponding period ended 31 March 2015. The increase was mainly due to the additional finance costs arising from the newly issued bond and bank borrowings during the period.

Profit after tax increased to $12.3 million from $8.9 million, representing an increase of $3.4 million or 39.1% as compared to the last corresponding period ended 31 March 2015.

Statement of financial position

The Group’s current assets decreased to $758.5 million as at 31 March 2016 from $972.7 million as at 31 December 2015. The decrease was mainly due to the decrease in cash and bank balances from $540.5 million as at 31 March 2015 to $332.0 million, a decrease of $208.5 million. The decrease was mainly due to repayments of short-term bank loans of $162.1 million.

The Group’s non-current assets increased from $1,200.1 million as at 31 December 2015 to $1,341.4 million as at 31 March 2016. The increase was mainly due to the additions of service concession receivables during the financial period.

The Group’s current liabilities decreased from $584.7 million as at 31 December 2015 to $451.2 million as at 31 March 2016. The decrease was mainly due to repayments of short-term bank loans of $162.1 million.

The Group’s non-current liabilities increased from $447.5 million as at 31 December 2015 to $521.4 million as at 31 March 2016. The increase was mainly due to the additions of longer bank loan tenures of $83.8 million to finance the acquisition of the investment projects during the financial period.

Statement of cash flow

The Group’s net cash used in financing activities of $78.4 million for period ended 31 March 2016 was mainly due to the repayments of short-term bank loans of $162.1 million, offset by proceeds from bank loans of $83.8 million during the financial period.

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.

No forecast or prospect statement has been previously disclosed to shareholders.

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10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

The Group continues to remain upbeat about its prospects in the water sector in China given that addressing pollution issues is a key political mission of the Central Government of China. With the urban land getting scarce and the tightening of discharge standard beyond Grade 1A standard, the demand for highly effective and efficient advanced treatment technology is set to rise. This would benefit the Group as its strength lies in advanced wastewater treatment technology like Membrane Bioreactor (“MBR”) technology which occupies less land, generates less sludge and delivers better-quality discharge.

In addition, the Group will further leverage on its strong track record and core expertise by engaging in strategic and large-scale merger and acquisition activities to expand its asset portfolio, particularly in the industrial sectors.

Update of the use of proceeds

	$million
Unutilised balance as atlast quarterly announcement	257
Repayment ofbank loans	(28)
Investmentin BeijingBeipai	(7)
Investmentin waterprojects
- Zaozhuang	(8)
- Fuqing and Shaxian	(28)
Unutilised balance as at date ofannouncement	186

11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? No

Name of Dividend	N/A
Dividend Type	N/A
Dividend Amount per Share (in cents)	N/A
Optional:- Dividend Rate (in %)	N/A
Par value of shares	N/A
Tax Rate	N/A

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? Yes

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Name of Dividend Final Dividend Type Final Dividend Amount per Share (in cents) 0.5 Optional:- Dividend Rate (in %) N/A Par value of shares N/A Tax Rate Tax exempt

(c) Date payable

Not applicable.

(d) Books closure date

Not applicable.

12. If no dividend has been declared/recommended, a statement to that effect.

No dividend has been declared/recommended.

13. Related parties and interested person transactions

The Group does not have a general mandate from shareholders for interested person transactions pursuant to Rule 920 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”).

PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (This part is not applicable to Q1, Q2, Q3 or Half Year Results)

14. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer’s most recently audited annual financial statements, with comparative information for the immediately preceding year.

Not Applicable

15. In the review of performance, the factors leading to any material changes in contributions turnover and earnings by the business or geographical segments.

Not Applicable

16. A breakdown of sales.

Not Applicable

17. A breakdown of the total annual dividend (in dollar value) for the issuer’s latest full year and its previous full year.

Not Applicable

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18. Persons occupying managerial positions who are related to the directors, Chief Executive Officer or substantial shareholders

Not applicable

19. Confirmation that the issuer has procured undertakings from all its directors and executive officers

The Company confirms that it has procured undertakings from all its directors and executive officers in the format set out in Appendix 7.7 under Rule 720(1) of the Listing Manual.

Statement by Directors

Pursuant to SGX Listing Rule 705(5)

To the best of our knowledge and belief, nothing has come to the attention of the Directors of the Company which may render the First Quarter Results of the Group for the financial period ended 31 March 2016 to be false or misleading. The financial statements and other information included in this report, present fairly in all material respects the financial condition, results of operations and cash flows of the Group of, and for the periods presented in this report.

On behalf of the Board

Hao Weibao Director

Dr Lin Yucheng Director

BY ORDER OF THE BOARD

Lotus Isabella Lim Mei Hua Company secretary 28 April 2016

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MEDIA RELEASE

CITIC Envirotech Ltd

Company Registration No: 200306466G Company Address: 10 Science Park Road #01-01 The Alpha Singapore 117684 Tel: (65) 6774 7298 Fax: (65) 6774 8920

Immediate Release

CITIC Envirotech Ltd recorded a 39.1% increase in net profit of S$12.3 million for the first quarter ended 31 March 2016

• Total revenue up 62.5% from S$61.2 million to S$99.5 million

• Engineering revenue increased 100% from S$20.7 million to S$41.4 million

• Recurring water treatment revenue up by 25.9% from S$28.6 million to S$36.0

• million

• Membrane sales increased 85.7% from S$11.9 million to S$22.1 million of revenue

Singapore, 28 April 2016 – Mainboard-listed CITIC Envirotech Ltd (“CEL” or “Group”), a leading membrane-based water treatment solutions provider reported a 39.1% increase in net profit from S$8.9 million to S$12.3 million compared to the last corresponding period ended 31 March 2015.

The Group recorded a total revenue of S$99.5 million, which was S$38.3 million or 62.5% higher than the last corresponding period ended 31 March 2015. This was mainly due to the increase in engineering business from S$20.7 million to S$41.4 million, representing an increase of $20.7 million or 100.0%; and the increase of membrane sales from S$11.9 million to S$22.1 million, representing an increase of S$10.2 million or 85.7%.

In addition, the Company continues its growth momentum in the recurring water treatment business segment and its recurring water treatment revenue increased S$7.4 million or 25.9% to S$36.0 million for the quarter ended 31 March 2016.

Profit after tax increased to S$12.3 million from S$8.9 million, representing an increase of S$3.4 million or 39.1% as compared to the last corresponding period ended 31 March 2015.

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MEDIA RELEASE

CITIC Envirotech Ltd

Company Registration No: 200306466G Company Address: 10 Science Park Road #01-01 The Alpha Singapore 117684 Tel: (65) 6774 7298 Fax: (65) 6774 8920

Financial Highlights

	1 Jan 2016 to 31 Mar 2016 (S$’Mil)	1 Jan 2015 to 31 Mar 2015 (S$’Mil)	Change (S$ ’Mil)	Change (%)
- Engineering	41.4	20.7	20.7	100
- Treatment	36.0	28.6	7.4	25.9
- Membrane	22.1	11.9	10.2	85.7
Total Revenue	99.5	61.2	38.3	62.5
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)	34.3	28.5	5.8	20.4
Net profit for the period	12.3	8.9	3.4	39.1

Outlook

The Group continues to remain upbeat about its prospects in the water sector in China given that addressing pollution issues is a key political mission of the Central Government of China. With the urban land getting scarce and the tightening of discharge standard beyond Grade 1A standard, the demand for highly effective and efficient advanced treatment technology is set to rise. This would benefit the Group as its strength lies in advanced wastewater treatment technology like Membrane Bioreactor (“MBR”) technology which occupies less land, generates less sludge and delivers better-quality discharge.

In addition, the Group will further leverage on its strong track record and core expertise by engaging in strategic and large-scale merger and acquisition activities to expand its asset portfolio, particularly in the industrial sectors.

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MEDIA RELEASE

CITIC Envirotech Ltd

Company Registration No: 200306466G

Company Address: 10 Science Park Road #01-01 The Alpha Singapore 117684 Tel: (65) 6774 7298 Fax: (65) 6774 8920

About CITIC Envirotech Ltd.

CITIC Envirotech Ltd (“CEL”, “Group”), formerly known as United Envirotech Ltd, is a leading membranebased integrated environmental solutions provider which specialises in the manufacturing of high quality membrane products and the application of membrane technologies for water and wastewater treatment and recycling. Its principal activities also include design, fabrication, installation and commissioning of water and wastewater systems using its proprietary advanced membrane technologies such as the Membrane Bioreactor (MBR) technology. CEL has designed and built several of the largest industrial wastewater treatment plants in Asia using the MBR technology. CEL undertakes both turnkey and water investment projects (TOT/BOT/BOO), as well as provides treatment plant operation and maintenance services. Through its wholly-owned subsidiary, Memstar Pte Ltd, the Group is one of the largest PVDF hollow fibre membrane manufacturers in the world.

CEL serves a strong prominent customer base such as petrochemical giants like China Petrochemical Corporation (“Sinopec”), China National Petroleum Corporation (“CNPC”), China National Offshore Oil Corporation (“CNOOC”), industrial parks and municipalities.

In August 2011, KKR became a strategic investor of CEL after injecting a US$113.8 million convertible bond investment and follow-on equity investment of US$40 million in January 2013. KKR is a leading global investment firm with about US$ 120 billion in assets under management as at 31 Dec 2015.

In April 2015, CITIC joined KKR as a strategic investor of CEL and became its largest shareholder after making a joint voluntary unconditional offer with KKR. CITIC Limited is China’s largest conglomerate operating domestically and overseas, with businesses in financial services, resources and energy, manufacturing, engineering, contracting and real estate, as well as other services.

CEL was listed on SGX Mainboard on 22 April 2004. For more information, please log on www.citicenvirotech.com

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Issued by CITIC Envirotech Ltd.