CITIC Limited — Interim / Quarterly Report 2018

Jul 25, 2018

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 25 July 2018:-

• (1) Second Quarter Financial Statement & Dividend Announcement for the Period Ended 30 June 2018;

• (2) two-fold increase in sales and earnings in 2Q2018; and

• (3) Mandatory Cash Dividend/ Distribution – Notice of book closure.

Hong Kong, 25 July 2018

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 Song Kangle, Ms Yan Shuqin, Mr Liu Zhuyu, Mr Peng Yanxiang, Mr Liu Zhongyuan, Mr Yang Xiaoping and Mr Wu Youguang; 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 Paul Chow Man Yiu and Mr Shohei Harada.

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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".

Second Quarter Financial Statement & Dividend Announcement for the Period Ended 30 June 2018

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.

The Group ($’000)	3 months ended 30/6/2018	3 months ended 30/6/2017 (Restated)	% Increase/ (Decrease)	6 months ended 30/6/2018	6 months ended 30/6/2017 (Restated)	% Increase/ (Decrease)
Revenue Finance income from service concession 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 profit of associates Profit before income tax Income tax expense Net profit for the period	279,919 11,092	111,650 11,593	150.7 (4.3) 136.1 33.8 1,046.9 197.9 22.8 2.1 67.5 10.7 12.9	527,042 23,184	211,252 23,185	149.5 - 134.7 (53.3) N/M 171.6 12.8 14.9 12.0 26.3 (44.6) 129.1 117.0 134.1
	291,011 5,851 (7,466) (176,000) (14,348) (7,932) (21,874) (10,565) 1,335	123,243 4,372 (651) (59,075) (11,683) (7,771) (13,059) (9,544) 1,182		550,226 9,012 (1,182) (344,223) (27,512) (16,161) (32,890) (19,835) 741	234,437 19,317 6,761 (126,742) (24,397) (14,069) (29,356) (15,706) 1,337
	60,012 (16,499)	27,014 (7,672)	122.2 115.1 125.0	118,176 (32,921)	51,582 (15,169)
	43,513	19,342		85,255	36,413

Finance income represents the interest income on the long-term receivables recognised in respect of the service concession arrangements in accordance with INT FRS 112 Service Concession Arrangements.

1

	The Group ($’000)	3 months ended 30/6/2018	3 months ended 30/6/2017 (Restated)	% Increase/ (Decrease)	6 months ended 30/6/2018	6 months ended 30/6/2017 (Restated)	% Increase/ (Decrease)
	Statement of Comprehensive Income Profit attributable to: Owners of the Company Non-controlling interests Profit for the period Currency translation gain (loss) Total other comprehensive income for the period Total comprehensive income for the period Total comprehensive income attributable to: Owners of the company Non-controlling interests Total comprehensive income for the period	43,325 188	21,444 (2,102)	102.0 N/M 125.0 N/M N/M (25.9) (3.4) N/M (25.9)	82,657 2,598	34,756 1,657	137.8 56.8 134.1 97.4 97.4 186.1 202.1 56.8 186.1
		43,513 (25,035)	19,342 5,595		85,255 (42,121)	36,413 (21,339)
		(25,035)	5,595		(42,121)	(21,339)
		18,478	24,937		43,134	15,074
		19,115 (637)	19,781 5,156		40,536 2,598	13,417 1,657
		18,478	24,937		43,134	15,074

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

The Group ($’000)	3 months ended 30/6/2018	3 months ended 30/6/2017 (Restated)	% Increase/ (Decrease)	6 months ended 30/6/2018	6 months ended 30/6/2017 (Restated)	% Increase/ (Decrease)
Employee share option expense Interest expense on bank borrowings and finance leases Interest expense on MTN bond Interest income Foreign currency exchange loss/(gain) (Gain)/Loss on disposal of subsidiaries Allowance for doubtful receivables Reversal of allowance for doubtful receivables	342 9,667 898 (982) 6,373 (3,136) 562 (284)	409 6,908 2,636 (636) (1,647) - - -	(16.4) 39.9 (65.9) 54.4 N/M N/M N/M N/M	342 16,329 3,506 (1,751) 1,226 (3,136) 562 (284)	817 10,462 5,244 (1,186) 3,522 781 - -	(58.1) (56.1) (33.1) 47.6 65.2 N/M N/M 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 30/6/2018 $’000	Group 31/12/2017 $’000 (Restated)	Group 1/1/2017 $’000 (Restated)	Company 30/6/2018 $’000	Company 31/12/2017 $’000
ASSETS
Current assets:
Cash and bank balances	328,235	631,304	493,541	33,908	259,081
Trade receivables	323,633	267,518	240,414	-	-
Service concession receivables	6,075	6,113	6,248	-	-
Other receivables and prepayments	314,517	204,550	141,233	972,976	918,580
Inventories	24,188	25,370	13,777	-	-
Prepaid leases	3,443	2,134	736	-	-
	1,000,091	1,136,989	895,949	1,006,884	1,177,661
Assets classified as held for sale	-	55,546	55,645	-	-
Total current assets	1,000,091	1,192,535	951,594	1,006,884	1,177,661
Non-current assets:
Contract assets	110,194	291,801	9,412	-	-
Service concession receivables	718,959	672,826	597,191	-	-
Other receivables and prepayments	34,258	32,163	15,577	-	-
Prepaid leases	89,491	85,850	39,996	-	-
Subsidiaries	-	-	-	627,148	595,233
Associates	40,851	29,720	17,807	10,588	10,588
Property, plant and equipment	1,223,346	720,545	374,470	270	309
Goodwill	255,365	255,365	255,365	-	-
Intangible assets	274,257	252,636	271,894	200	200
Available-for-sale financial asset	3,747	2,660	-	-	-
Deferred tax assets	567	470	1,111	-	-
Total non-current assets	2,751,035	2,344,036	1,582,823	638,206	606,330
Total assets	3,751,126	3,536,571	2,534,417	1,645,090	1,783,991
LIABILITIES AND EQUITY
Current liabilities:
Bank loans	190,824	197,070	76,499	-	-
Medium term notes	-	224,559	-	-	224,559
Trade payables	915,996	692,519	301,029	-	-
Other payables	88,506	85,587	77,849	161,878	172,883
Finance leases	108	116	161	39	39
Income tax payable	65,551	55,336	29,273	-	-
	1,260,985	1,255,187	484,811	161,917	397,481
Liabilities directly associated with assets classified as held for sale	-	4,779	31,952	-	-
Total current liabilities	1,260,985	1,259,966	516,763	161,917	397,481
Non-current liabilities:
Bank loans	484,712	387,725	256,868	-	-
Finance leases	185	236	169	119	139
Medium term notes	-	-	223,449	-	-
Deferred tax liabilities	57,273	52,294	45,432	-	-
Total non-current liabilities	542,170	440,255	525,918	119	139

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	Group 30/6/2018 $’000	Group 31/12/2017 $’000 (Restated)	Group 1/1/2017 $’000 (Restated)	Company 30/6/2018 $’000	Company 31/12/2017 $’000
Capital, reserves and non-controlling interests:
Share capital	710,429	622,741	608,063	710,429	622,741
Perpetual capital securities	717,600	717,600	481,250	717,600	717,600
General reserve	10,673	10,569	7,414	-	-
Capital reserve	6,073	6,073	2,096	-	-
Share option reserve	14,895	21,848	27,782	14,895	21,848
Currency translation reserve	(26,281)	(19,156)	(11,999)	(3,051)	(13,005)
Retained earnings	356,692	324,419	260,981	43,181	37,187
Equity attributable to owners of the Company	1,790,081	1,684,094	1,375,587	1,483,054	1,386,371
Non-controlling interests	157,890	152,256	116,149	-	-
Total equity	1,947,971	1,836,350	1,491,736	1,483,054	1,386,371
Total liabilities and equity	3,751,126	3,536,571	2,534,417	1,645,090	1,783,991

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

Amount repayable in one year or less, or on demand

As at 30/6/2018		As at	31/12/2017
Secured	Unsecured	Secured	Unsecured
$’000	$’000	$’000	$’000
190,932	-	197,186	224,559

Amount repayable after one year

As at 30/6/2018		As at	31/12/2017
Secured	Unsecured	Secured	Unsecured
$’000	$’000	$’000	$’000
484,897	-	387,961	-

Details of any collateral

1. The finance leases of $293,000 (31 December 2017: $352,000) is secured over the Group’s motor vehicles.

2. The bank loans of $675,536,000 (31 December 2017: $584,795,000) 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.

The Group ($’000)	3 months ended 30/6/2018	3 months ended 30/6/2017 (Restated)	6 months ended 30/6/2018	6 months ended 30/6/2017 (Restated)
Operating activities Profit before income tax Adjustments for: Interest income Interest expense Share of profit of associates Depreciation and amortisation Share option expense Allowance for doubtful receivables Reversal of allowance for doubtful receivables (Gain)/Loss on disposal of subsidiaries Exchange differences arising on foreign currency translation Operating profit before working capital changes Contract assets Trade receivables Other receivables Inventories Trade payables Other payables Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from (used in) operating activities Investing activities Acquisition of non-controlling shareholders in a subsidiary Addition to property, plant and equipment Addition to intangible assets Addition to prepaid lease Addition to deposits for investment projects Investment in associates Investment in joint ventures Disposal of subsidiary Net cash used in investing activities Financing activities Contribution from non-controlling shareholders Dividend paid New bank loans raised Redemption of medium term notes Proceeds from issuing new shares Share buy-back and cancellation of shares Repayment of obligations under finance leases Repayment of bank borrowings Net cash (used in) generated from financing activities	60,012 (982) 10,565 (1,335) 7,932 342 562 (284) (3,136) 12,855	27,014 (636) 9,544 (1,182) 7,771 409 - - - 21,442	118,176 (1,751) 19,835 (741) 16,161 342 562 (284) (3,136) 4,123	51,582 (1,186) 15,706 (1,337) 14,069 817 - - 781 19,239
	86,531 55,814 (37,357) (33,526) 7,426 (44,574) 31,600	64,362 24,382 24,590 (71,681) 651 16,724 13,465	153,287 23,232 (59,385) (48,484) 1,126 (85,948) 24,070	99,671 9,412 14,567 (91,324) (6,761) 29,922 5,148
	65,914 982 (14,789) (4,078)	72,493 636 (11,845) (3,002)	7,898 1,751 (21,161) (10,561)	60,635 1,186 (15,064) (8,129)
	48,029	58,282	(22,073)	38,628
	- (91,714) - - (62,026) - - 10,378	- (96,878) (2,077) (6,985) - - (524) -	- (119,642) (307) - (62,026) - (1,087) 10,378	(1,316) (121,728) (5,899) (24,569) (51,042) (6,967) (524) 21,718
	(143,362)	(106,464)	(172,684)	(190,327)
	706 (53,251) 278,669 (225,000) 10,203 (544) (31) (154,398)	3,785 (36,360) 248,131 - 6,748 - (11) (28,279)	3,035 (53,251) 283,722 (225,000) 80,937 (544) (60) (199,631)	6,047 (36,360) 281,231 - 6,748 (3,213) (40) (41,151)
	(143,646)	194,014	(110,792)	213,262

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The Group ($’000)	3 months ended 30/6/2018	3 months ended 30/6/2017 (Restated)	6 months ended 30/6/2018	6 months ended 30/6/2017 (Restated)
Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies Cash and cash equivalents at end of period	(238,979) 568,038 (824)	145,832 399,474 (5,689)	(305,549) 631,304 2,480	61,563 493,541 (15,487)
	328,235	539,617	328,235	539,617

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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	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 2018 (Restated) Profit for the year Other comprehensive income for the period Total comprehensive income for the period Issuance of new shares Acquisition of subsidiaries Incorporation of subsidiaries Dividend payable At 31 March 2018 (Restated) Profit for the year Other comprehensive income for the period Total comprehensive income for the period Recognition of share based payment Issuance of shares on exercise of ESOS Share buy-back and cancellation of shares Incorporation of subsidiaries Transfer to general reserve Dividend paid/payable At 30 June 2018 (Restated)	622,741 -	717,600 -	10,569 -	6,073 -	21,848 -	(19,156) - 17,085	324,419 39,332 -	1,684,094 39,332 17,085	152,256 2,410 826	1,836,350 41,742 17,911
		-	-	-	-	-	17,085	39,332	56,417	3,236	59,653
		70,734 - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - (8,619)	70,734 - - (8,619)	- 947 1,382 -	70,734 947 1,382 (8,619)
		693,475 - -	717,600 - -	10,569 - -	6,073 - -	21,848 - -	(2,071) - (24,210)	355,132 43,325 -	1,802,626 43,325 (24,210)	157,821 188 (825)	1,960,447 43,513 (25,035)
		-	-	-	-	-	(24,210)	43,325	19,115	(637)	18,478
		- 17,498 (544) - - -	- - - - - -	- - - - 104 -	- - - - - -	342 (7,295) - - - -	- - - - - -	- - - - (104) (41,661)	342 10,203 (544) - - (41,661)	- - - 706 - -	342 10,203 (544) 706 - (41,661)
		710,429	717,600	10,673	6,073	14,895	(26,281)	356,692	1,790,081	157,890	1,947,971

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		Share capital $’000	Perpetual capital securities $’000	General reserve $’000	Capital reserve $’000	Share option 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 2017 (Restated) Profit for the year Other comprehensive loss for the period Total comprehensive (loss)/income for the period Recognition of share based payment Acquisition of subsidiaries Share buy-back and cancellation of shares Dividend payable At 31 March 2017 (Restated) Profit for the year Other comprehensive income for the period Total comprehensive income for the period Issuance of shares on exercise of ESOS Recognition of share based payment Acquisition of subsidiaries Incorporation of subsidiaries Dividend payable At 30 June 2017 (Restated)	608,063 - -	481,250 - -	7,414 - -	2,096 - -	27,782 - -	(11,999) - (19,676)	260,981 16,354 -	1,375,587 16,354 (19,676)	116,149 717 (3,475)	1,491,736 17,071 (23,151)
		-	-	-	-	-	(19,676)	16,354	(3,322)	(2,758)	(6,080)
		- - (3,213) -	- - - -	- - - -	- - - -	408 - - -	- - - -	- - - (6,147)	408 - (3,213) (6,147)	- 946 - -	408 946 (3,213) (6,147)
		604,850 -	481,250 -	7,414 -	2,096 -	28,190 -	(31,675) - (1,663)	271,188 21,444 -	1,363,313 21,444 (1,663)	114,337 (2,102) 7,258	1,477,650 19,342 5,595
		-	-	-	-	-	(1,663)	21,444	19,781	5,156	24,937
		11,658 - - - -	- - - - -	- - - - -	- - - - -	(4,910) 409 - - -	- - - - -	- - - - (29,523)	6,748 409 - - (29,523)	- - 3,785 -	6,748 409 3,785 (29,523)
		616,508	481,250	7,414	2,096	23,689	(33,338)	263,109	1,360,728	123,278	1,484,006

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		Share capital $’000	Perpetual capital securities $’000	Share option reserve $’000	Currency translation reserve $’000	Retained earnings $’000	Total $’000
	Company At 1 January 2018 Loss for the year Other comprehensive income for the period Total comprehensive income/(loss) for the period Dividend payable Issuance of new shares At 31 March 2018 Profit for the year Other comprehensive income for the period Total comprehensive income/(loss) for the period Issuance of shares on exercise of ESOS Recognition of share- based payment Share buy-back and cancellation of shares Dividend paid/payable At 30 June 2018	622,741 - -	717,600 - -	21,848 - -	(13,005) - 9,126	37,187 (8,062) -	1,386,371 (8,062) 9,126
		-	-	-	9,126	(8,062)	1,064
		- 70,734	- -	- -	- -	(8,619) -	(8,619) 70,734
		693,475 - -	717,600 - -	21,848 - -	(3,879) - 828	20,506 64,336 -	1,449,550 64,336 828
		-	-	-	828	64,336	65,164
		17,498 - (544) -	- - - -	(7,295) 342 - -	- - - -	- - - (41,661)	10,203 342 (544) (41,661)
		710,429	717,600	14,895	(3,051)	43,181	1,483,054

		Share capital $’000	Perpetual capital securities $’000	Share option reserve $’000	Currency translation reserve $’000	Retained earnings $’000	Total $’000
	Company At 1 January 2017 Loss for the year Other comprehensive loss for the period Total comprehensive loss for the period Recognition of share-based payment Share buy-back and cancellation of shares Dividend payable At 31 March 2017 Loss for the year Other comprehensive income for the period Total comprehensive income/(loss) for the period Issuance of shares on exercise of ESOS Recognition of share-based payment Issuance of shares on placement Dividend paid/payable At 30 June 2017	608,063 - -	481,250 - -	27,782 - -	7,160 - (11,539)	22,921 (8,080) -	1,147,176 (8,080) (11,539)
		-	-	-	(11,539)	(8,080)	(19,619)
		- (3,213) -	- - -	408 - -	- - -	- - (6,147)	408 (3,213) (6,147)
		604,850 - -	481,250 - -	28,190 - -	(4,379) - 500	8,694 (5,872) -	1,118,605 (5,872) 500
		-	-	-	500	(5,872)	(5,372)
		11,658 - - -	- - - -	(4,910) 409 - -	- - - -	- - - (29,523)	6,748 409 - (29,523)
		616,508	481,250	23,689	(3,879)	(26,701)	1,090,867

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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.

Number of ordinary shares as at 1 April 2018 Issuance of New Shares on exercise of ESOS Share buy-back and cancellation of shares Number of ordinary shares as at 30 June 2018	2,368,189,356 37,831,000 (980,000)
	2,405,040,356

During the period, 18,364,000 of the employee share options were granted and 1,200,000 of the employee share options were cancelled. The total number of shares that may be issued on conversion of all the outstanding employee shares options were 53,342,200 (30 June 2017: 86,256,200).

The perpetual capital securities comprised USD355 million (30 June 2017: 355 million) issued at 5.45% per annum; and S$240 million (30 June 2017: Nil) issued at 3.9% per annum.

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.

	30/6/2018	31/12/2017
Total number of issues shares (‘000)	2,405,040	2,284,973

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 year ended 31 December 2017. The new and revised FRSs and Interpretation of FRS (“INT FRS”) that are effective from 1 January 2018 have no material effect on the amounts reported for the current or prior year, except for SFRS(I) 15 Revenue from Contracts with Customers .

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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.

With the adoption of SFRS(I) 15 Revenue from Contracts with Customers , which is effective from 1 January 2018, the effect is as follows.

Group Consolidated Statement of Comprehensive Income Revenue Profit for the period Attributable to: Owners of the Company Non-controlling interests Earnings per share (cents) - basic - diluted Adjusted earnings per share (cents) - basic - diluted Group Consolidated Balance Sheet Non-current assets Current liabilities Total equity Net assets value per share (cents)	Second Quarter 2017
	Reported under SFRS $’000 Reported under SFRS(I) $’000 134,405 123,243 22,230 19,342
	21,002 18,402 1,228 940
	22,230 19,342
	0.93 0.81 0.90 0.78 0.63 0.51 0.61 0.49 As at 31.12.2017
	Reported under SFRS Reported under SFRS(I) $’000 $’000 2,416,235 2,344,036 1,327,399 1,259,966 1,841,116 1,836,350 80.57 80.37

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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 3 months ended 30/6/2018	Group 3 months ended 30/6/2017 (Restated)	Group 6 months ended 30/6/2018	Group 6 months ended 30/6/2017 (Restated)
Net profit attributable to shareholders of the Company ($’000)	43,325	21,444	82,657	34,756
Weighted average number of shares in issue (in‘000) for computation of Basic EPS	2,376,330	2,260,287	2,333,662	2,260,287
Earnings per share (cents) - Basic	1.82	0.95	3.54	1.54
Weighted average number of shares in issue (in‘000) for computation of Diluted EPS	2,429,672	2,346,543	2,387,004	2,346,543
Earnings per share (cents)–Diluted	1.78	0.91	3.46	1.48

Adjusted EPS	Group 3 months ended 30/6/2018	Group 3 months ended 30/6/2017 (Restated)	Group 6 months ended 30/6/2018	Group 6 months ended 30/6/2017 (Restated)
Net profit attributable to shareholders of the Company adjusted for dividends attributable to perpetual capital securities ($’000)	37,275	14,647	67,987	21,812
Weighted average number of shares in issue (in‘000) for computation of Basic EPS	2,376,330	2,260,287	2,333,662	2,260,287
Earnings per share (cents) - Basic	1.57	0.65	2.91	0.97
Weighted average number of shares in issue (in‘000) for computation of Diluted EPS	2,429,672	2,346,543	2,387,004	2,346,543
Earnings pershare (cents)– Diluted	1.53	0.62	2.85	0.93

For the purpose of calculating diluted EPS, assumption was made that all the employee share options 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 30/6/2018	Group 31/12/2017 (Restated)	Company 30/6/2018	Company 31/12/2017
Net asset value ($’000)	1,947,971	1,836,350	1,483,054	1,386,371
Net asset value per share (cents)	81.00	80.37	61.66	60.67

The net asset value per share is calculated based on the issued share capital 2,405,040,356 of (31 December 2017: 2,284,973,276).

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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

• (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 $291.0 million, which was $167.8 million or 136.1% higher than last corresponding period ended 30 June 2017 of $123.2 million. The breakdown of the revenue was as follows:

	Group 3 months ended 30/6/2018 $’million	Group 3 months ended 30/6/2017 $’million (Restated)	% increase/ (decrease)
Engineeringrevenue	112.5	53.3	111.1
Membrane system sales	122.8	23.1	431.6
	235.3	76.4	208.0
Treatment revenue *	55.7	46.8	19.0
Total	291.0	123.2	136.1

• Included finance income from service concessions.

The increase was mainly due to the increase in engineering revenue from $53.3 million to $112.5 million, representing an increase of $59.2 million or 111.1%; and membrane system sales from $23.1 million to $122.8 million, representing an increase of $99.7 million or 431.6%.

Gross profit analysis for engineering and membrane system sales

	Group 3 months ended 30/6/2018 $’million	Group 3 months ended 30/6/2017 $’million (Restated)
Engineeringrevenue	112.5	53.3
Membrane system sales	122.8	23.1
Total	235.3	76.4
Changes in inventories	(7.2)	(0.8)
Material purchased, consumables used and subcontractors’ fees#	(169.1)	(55.3)
Grossprofit	59.0	20.3
GP margin(%)	25.1%	26.6%

• Material purchased, consumables used and subcontractors’ fees related to engineering and membrane division only.

Materials purchased, consumables used and subcontractors’ fees increased to $176.0 million from $59.1 million, representing an increase of $116.9 million or 197.9% as compared to the last corresponding period ended 30 June 2017. The increase was consistent with the increase in engineering revenue and membrane system sales from $76.4 million to $235.3 million, representing an increase of $158.9 million or 208.0% as compared to the last corresponding period ended 30 June 2017.

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Other operating expenses increased to $21.9 million from $13.1 million, representing an increase of $8.8 million or 67.5% as compared to the last corresponding period ended 30 June 2017. The increase was mainly due to increase in net foreign currency exchange loss of $6.4 million during the period (30 June 2017: net foreign currency exchange gain of $1.6 million).

Profit after tax increased to $43.5 million from $19.3 million, representing an increase of $24.2 million or 125.0% as compared to the last corresponding period ended 30 June 2017.

Statement of financial position

The Group’s non-current assets increased from $2,344.0 million as at 31 December 2017 to $2,751.0 million as at 30 June 2018. The Increase was mainly due to additions to property, plant and equipment of $502.8 million.

The Group’s non-current liabilities increased from $440.3 million as at 31 December 2017 to $542.2 million as at 30 June 2018. The increase was mainly due to the additions of longer-tenure bank loan of $97.0 million to finance the acquisition of investment projects during the period.

The Group’s total equity increased from $1,836.4 million as at 31 December 2017 to $1,948.0 million as at 30 June 2018. The increase was mainly due to placement of 83,216,080 of new ordinary shares and issuance of 37,831,000 new ordinary shares on exercise of ESOS during the period.

Statement of cash flow

The net cash used in financing activities of the group increased to $143.6 million from net cash generated from financing activities of $194.0 million in the last corresponding period ended 30 June 2017. The net cash used in financing activities for the current period was mainly due to redemption of medium term notes of $225.0 million during the period. In addition, repayment of bank borrowings increased to $154.4 million from $28.3 million in the last corresponding period ended 30 June 2017.

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.

14

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.

In conjunction with the Singapore International Water Week (“SIWW”) held in July 2018, CEL reaffirmed its commitment to the development and advancement of environmental technologies with the official launch of its recently incorporated wholly-owned subsidiary, Singapore Envirotech Accelerator Pte. Ltd (“SEA’). SEA, supported by the Singapore Economic Development Board, aims to accelerate the innovation and commercialisation of environmental technologies drawn from intellectual properties and Research and Development performed locally and internationally by institutions, industry and technopreneurs.

In addition, the Group’s wholly owned subsidiary Memstar Pte Ltd (“Memstar”), announced the opening of a US$15 million, 40,500 sq ft membrane manufacturing facility in Conroe, Texas, USA. This is its first plant outside Asia and it will manufacture Memstar’s latest product, the Memstar Advance Reverse Osmosis (“RO”) and Nano Filtration (“NF”) Membrane. The launch of the RO/NF Membrane plant marks a significant milestone for Memstar, which is currently a global leading manufacturer of microfiltration (“MF”) and ultrafiltration (“UF”) membrane. The RO/NF membrane complements the Group’s manufacturing capabilities and enables it to offer a complete range of membrane filtration products.

CEL remains upbeat on the opportunities available in the environment protection industry in China. Besides securing more projects in the water segment, the Group has increased its presence in related environmental services such as ecological restoration, hazardous waste treatment, sludge management and integrated environmental services.

Update of the use of proceeds

	$million
Balance broughtforward	70
Issuance of newshares pursuant to exercise of ESOS	11
Investmentin ProjectXiaochang	(15)
Unutilised balance as at date ofannouncement	66

11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? Yes

Name of Dividend	Interim
Dividend Type	Interim
Dividend Amount per Share (in cents)	0.50
Optional:- Dividend Rate (in %)	N/A
Par value of shares	N/A
Tax Rate	Tax exempt

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? No

15

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

(c) Date payable

15 August 2018.

(d) Books closure date

Notice is hereby given that, the Shares Transfer Books and Register of Members of the Company will be closed on 2 August 2018 at 5.00 p.m. for the purpose of determining Members’ entitlements to the Proposed Interim Dividend. Duly completed registrable transfers in respect of ordinary shares in the capital of the Company received up to the close of business at 5.00 p.m. on 2 August 2018 by the Company’s Share Registrar, Tricor Barbinder Share Registration Services, 80 Robinson Road, #02-00, Singapore 068898 will be entitled to the Proposed Interim Dividend.

Members whose Securities Accounts with the The Central Depository (Pte) Limited are credited with shares of the Company as at 5.00 p.m. on 2 August 2018 will be entitled to the Proposed Interim Dividend.

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

Interim dividends have 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 to turnover and earnings by the business or geographical segments.

Not Applicable

16. A breakdown of sales.

Not Applicable

16

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

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 Second Quarter Results of the Group for the period ended 30 June 2018 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

Zhang Yong Director

BY ORDER OF THE BOARD

Lotus Isabella Lim Mei Hua Company secretary 25 July 2018

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For Immediate Release

CITIC Envirotech continues growth trajectory with more than two-fold increase in sales and earnings in 2Q2018

• Attributes stellar performance to numerous projects secured over the past 12 months.

• Declares its first interim dividend pay-out of 0.5 Singapore cents per share.

Financial Highlights (S$’ million)	3 months ended 30 June	3 months ended 30 June	3 months ended 30 June	6 months ended 30 June	6 months ended 30 June	6 months ended 30 June
	2Q 2018	2Q 2017	Change (%)	1H 2018	1H 2017	Change (%)
Total Revenue	291.0	123.2	136.1	550.2	234.4	134.7
‒ Engineering ‒ Membrane systems ‒ Treatmenta	112.5 122.8 55.7	53.3 23.1 46.8	111.1 431.6 19.0	234.4 213.7 102.1	107.1 42.8 84.5	118.9 399.3 20.8
EBITDA	77.5	43.7	77.3	152.4	80.2	90.0
Net Profit for the period	43.5	19.3	125.0	85.3	36.4	134.1
Basic earnings per share (“EPS”) (Singapore cents)b	1.82	0.95	91.6	3.54	1.54	129.9
Net asset value (“NAV”) per share (Singapore cents)c	81.00 (as at 30 June 2018)			80.37 (as at 31 December 2017)

• a. Includes finance income from service concessions.

• b. EPS was computed based on the weighted average number of 2,376,330 shares in 2Q2018 and 2,333,662 shares 1H2018; and 2,260,287 shares in 2Q2017 and 1H2017.

• c. NAV was computed based on 2,405,040,356 shares as at 30 June 2018 and 2,284,973,276 shares as at 31 December 2017.

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SINGAPORE – 25 July 2018 – Riding on the same growth trajectory that saw it achieve record revenues and net profits for the last three consecutive financial years, SGX-Mainboard listed CITIC Envirotech Ltd (“ CEL ”, or together with their subsidiaries, the “ Group ”), a leading membrane-based water and wastewater treatment and recycling solutions provider, has recorded a more than two-fold increase in sales and earnings for the three months ended 30 June 2018 (“ 2Q2018 ”).

The Group’s net profit in 2Q2018 leapt 125.0% year-on-year (“ YOY ”) to S$43.5 million on the back of revenue which surged 136.1% to S$291.0 million. Rising in tandem, net profit for the six months ended 30 June 2018 jumped 134.1% YOY to S$85.3 million on revenue which expanded 134.7% to S$550.2 million.

Revenue growth in 2Q2018 was led by the engineering segment and membrane systems sales, which expanded 111.1% and 431.6% YOY to S$112.5 million and S$122.8 million respectively.

Executive Chairman and Group Chief Executive Officer, Mr Hao Weibao , said: “Demand for wastewater and hazardous treatment solutions has been growing in tandem with the increasing attention on environmental protection in China. The Chinese government in its 13[th] Five-Year Plan, had also outlined its aim to increase spending on such projects[1] . The recent rapid pace of project wins secured by our Group not only shows this but also attests to CEL’s track record and expertise in this segment.

“The Group’s recent performance reflects our diversification beyond wastewater treatment projects to other segments within the environmental technologies space.”

In view of the healthy financial results, CEL has declared its maiden interim dividend payout of 0.5 Singapore cents per share for the six months ended 30 June 2018.

1 Article “China's 13th five year plan: what role will wastewater play?” by Water & Wastewater International (https://www.waterworld.com/articles/wwi/print/volume-33/issue-1/technology-case-studies/china-s-13th-five-yearplan-what-role-will-wastewater-play.html)

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Outlook

CEL remains upbeat about the opportunities available in the environment protection industry in China. Besides securing more projects in the water segment, the Group has increased its presence in related environmental services such as ecological restoration, hazardous waste treatment, sludge management and integrated environmental services.

At the recent Singapore International Water Week from 8 to 12 July 2018, the Group announced two strategic moves that are expected to have a potentially positive impact on future growth.

The first was the official launch of its wholly-owned subsidiary, Singapore Envirotech Accelerator Pte Ltd (“ SEA ”), which aims to accelerate the innovation and commercialisation of environmental technologies drawn from intellectual properties and Research and Development performed locally and internationally by institutions, industry and technopreneurs.

Supported by the Singapore Economic Development Board, SEA will identify promising Small and Medium Enterprises to fund and mentor and to bring their innovations to market and eventually for a potential listing on the Singapore bourse. Its work is expected to complement the Group’s existing services and technologies as well as introduce new innovations to the market.

The second was in relation to CEL’s wholly owned subsidiary Memstar Pte Ltd (“ Memstar ”), which announced the opening of its first plant outside Asia. The US$15 million, 40,500 sq ft membrane manufacturing facility in Conroe, Texas, USA, will manufacture Memstar’s latest product, the Memstar Advance Reverse Osmosis and Nano Filtration Membrane, which enables the removal of salt from water to facilitate desalination, water recycling and many other water purification applications. With the new product as well as its existing Microfiltration and Ultrafiltration Membranes, Memstar now offers a complete range of membrane filtration products used in water treatment.

“These recent corporate developments demonstrate the Group’s commitment to build a sustainable business for the long term. While we are busy chasing down every lead to secure more projects to maintain a robust order book, we are at the same time ramping up for future growth by continuing our development of new products as well as exploring opportunities to invest in technology that will keep us at the forefront of breakthroughs and advancements in clean technologies,” said Mr Hao .

– End –

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This press release should be read in conjunction with CEL’s announcement released via SGXNet on 25 July 2018.

About CITIC Envirotech Ltd (“CEL”)

CITIC Envirotech Ltd (“CEL”, “Group”), formerly known as United Envirotech Ltd, is a leading membrane-based 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.

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$40 million in January 2013. KKR is a leading global investment firm with more than US$ 126 billion in assets under management.

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.

In November 2016, CRF Envirotech Co., Ltd. completed the acquisition of the entire stake held by KKR China Water Investment Limited in CITIC Envirotech Ltd, and became its second largest shareholder. CRF Envirotech Co., Ltd is a joint venture between CRF Envirotech Fund L.P. and China Reform Conson Soochow Overseas Fund I L.P., which are in turn sponsored mainly by China Reform Holdings Corporation Ltd (“CRHC”). CRHC, a wholly stated-owned investment company plays a unique and crucial role in China's state-owned assets management and restructuring process.

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

For analyst and media queries, please contact:

August Consulting

Tel: +65 6733 8873 Wrisney Tan, wrisneytan@august.com.sg Zavier Ong, zavierong@august.com.sg

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