Chiho Announces Interim Results and Turnaround
Chiho Environmental Group Limited (stock code: 976.HK) (the “Company” or “Chiho”) is pleased to announce the unaudited consolidated interim results of the Company and its subsidiaries for the six months ended 30 June 2021. The Company together with its subsidiary, Scholz Recycling, recorded tremendous results with a turnaround in earnings resulting from eased lockdown restrictions, structural adaptions for more efficient operations and a group-wide strategy capturing new growth opportunities.
Revenue up 91.0% YoY to HK$11,162.2 million.
Gross profit tripled YoY to HK$1,005.9 million.
Net profit surged 178.5% YoY to HK$ 225.9 million.from the Interim Report
During the review period, Chiho’s business activities resumed profit-making. Revenue recorded significant increase of approximately 91.0% year-on-year to HK$11,162.2 million. Gross Profit tripled year-on-year to HK$1,005.9 million, representing a surge of approximately 219.9%. As majority of all countries across the globe have started to ease its COVID-19 restrictions, our operations in Europe, North America and Asia have all resumed close-to-normal level since the beginning of 2021.
To further improve the Company’s overall business and financials, Chiho has made structural changes to its business operations to cushion loss and enhance efficiency. While the US-Northeastern assets had been divested as part of that business transformation process, a new strategy to strengthen the existing business while capturing new growth opportunities, has also been rolled out at the same time. The success of the mentioned strategies and initiatives has contributed to the Company’s significant increase in net profit. For the first six months of FY2021, Chiho achieved net profit of HK$225.9 million, up 178.5% year-on-year, backed by the sale of 2.3 million tonnes of consolidated processed material during the review period.
“As a leader in the global recycling industry, we have made a head start in China by strategically collaborating with one of the world’s largest aluminum producer, China Hongqiao Group Ltd., to establish a new industrial recycling facility, with an aim to race against climate change and to support sustainable, low-carbon and reliable raw material supply circles. China will become one of our key growth markets in the near future as we have seen very good growth in both tonnage and revenue in the first half of 2021. In addition, we are excited to tap on the tremendous opportunities brought by the country and supporting its ambitious sustainability goals of reaching carbon neutral by 2060 as listed in its 14th Five-Year Plan.”Rafael Suchan, Chief Executive Officer of Chiho Environmental Group Limited
Europe has continued to be the Company’s core market. Its European operations have performed consistently well, representing more than 80% of global operations. The recycling services from its subsidiary, Scholz Recycling GmbH, cover both ferrous and non-ferrous materials, recorded growth in tonnage and revenue by 22.2% and 101.7% respectively in the region over the same period last year.
In North America, the Group has undergone a restructuring by selling the loss-making facilities, making a turnaround in net profit in the first half of 2021. Although tonnage and revenue generated in North America saw a temporary drop of 41.5% and 1.8% respectively, yet its gross profit and gross profit margin improved to HK$100.0 million and 19.0%, representing an increase of 103.7% and 9.9% year-on-year.
The Asian operations in India, Malaysia and Thailand have shown great improvement compared to the same period of last year. The Southeast Asian market maintained stable growth as Chiho ramped up its operations of the profitable e-motor recycling business. Tonnage and revenue in Asia have increased 29.4% and 115.4% respectively.
“Moving forward, we are very optimistic towards the outlook of Chiho as we are well-equipped to capture the deep pool of opportunities brought about by a post-COVID economic reset and a global shift in focusing towards sustainability and a circular economy which requires recycling. At the same time, fueled by the transformation process underway, all the powers emerging within the Group further empowered us to become a first-class circular economy solution partner for global industries.”Rafael Suchan, Chief Executive Officer of Chiho Environmental Group Limited
The Company’s objective of achieving financial stability and profitable growth in the coming years remains unchanged. Despite the continuing uncertainties of the COVID pandemic may pose challenges to our business, Chiho expects all key performance indicators will continue to stay positive in the remaining financial year.