Revenue of $12.7 million and earnings per share of $0.14 impacted by reduced project activity due to a slowdown in the PRC economy
SHENZHEN, China, Dec. 27, 2024 (GLOBE NEWSWIRE) -- CDT Environmental Technology Investment Holdings Limited (NASDAQ: CDTG) ("CDT”, the "Company”, or "we”), a leading provider of waste treatment systems and services throughout China, today reports its unaudited interim financial results for the six months ended June 30, 2024 and provides updates on key business developments and outlook.
All amounts are expressed in US dollars unless otherwise stated.
2024 Interim Financial Results and Business Updates
- Revenues decreased by approximately $2.8 million, or 18.1%, to approximately $12.7 million for the six months ended June 30, 2024 from approximately $15.5 million for the six months ended June 30, 2023. This decrease was primarily attributed to ongoing work related to one new project during the six months ended June 30, 2024, compared to two new projects in the same period of 2023, and fewer projects in progress or completed in 2024. The reduced project activity was largely driven by decreased demand for the Company's services due to the economic downturn in the People's Republic of China (the "PRC”).
- Gross profit decreased by approximately $0.3 million, or 6.7%, to approximately $4.5 million for the six months ended June 30, 2024 from approximately $4.8 million for the six months ended June 30, 2023. The decrease in gross profit is primarily due to a decrease in sewage treatment systems revenue.
- For the six months ended June 30, 2024 and 2023, overall gross profit percentage was 35.5% and 31.2%, respectively. The increase in gross profit percentage of 4.3% was primarily due to the following: (1) a 3.6% increase from sewage treatment systems driven by a decrease in material costs resulting from temporary price fluctuations, and (2) a 17.2% increase in gross profit from sewage treatment services, mainly due to reduced labor costs following the disposal of two non-profitable subsidiaries.
- Total operating expenses increased by approximately $0.2 million, or 7.8%, to approximately $2.7 million for the six months ended June 30, 2024 from approximately $2.5 million for the six months ended June 30, 2023.
- Net income decreased by approximately $0.4 million, or 21.6%, to approximately $1.4 million, or $0.14 per share, for the six months ended June 30, 2024 from approximately $1.8 million, or $0.22 per share, for the six months ended June 30, 2023. The reduction in net income was primarily attributable to decreased demand for the Company's services due to the economic downturn in the PRC.
Yunwu Li, added, "We have continued to successfully navigate near-term challenges related to softening economic conditions by delivering excellent customer service and by driving productivity. Our focus remains on investing for the future and positioning ourselves to capitalize on opportunities associated with favorable, long-term secular trends including water conservation, safety and regulation. Looking forward, we remain confident in our business model and committed to translating our efforts into sustained growth and creating value for our shareholders.”
Updated Full Year 2024 Outlook
- Based on current visibility, management expects full-year 2024 revenue to be in the range of $30.2 to $32.7 million, with net income in the range of $6.5 to $7.9 million. The change in guidance from the previous range of revenue of $42.5 to $47.0 million and net income of $8.7 to $10.2 million reflects the slowdown in the PRC economy and delay of certain projects.
CDT, headquartered in Shenzhen, China, is a leading national player in China's waste treatment sector that designs, develops, manufactures, sells, installs, operates and maintains sewage treatment systems and provides sewage treatment services in China, and is dedicated to promoting sustainable development through innovative solutions. Founded by pioneers in waste treatment, CDT aims to advance next-generation technologies that directly address environmental challenges and promote sustainable solutions. CDT is a recognized brand in China and is committed to innovation and customer satisfaction.
CDT's mission is to help its customers achieve their critical infrastructure objectives while enabling positive change in technological environmental protection. It collaborates with industry leaders, environmental experts, and stakeholders to develop and implement advanced waste treatment solutions. Recently listed on the Nasdaq Capital Market, CDT is a prominent player in the waste treatment market, capable of providing comprehensive solutions to diverse customer needs, and has completed more than 150 plants across China.
For more information, visit CDT's website at https://www.cdthb.cn
| CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2024 | 2023 | |||||||
| REVENUES | ||||||||
| Sewage treatment systems | $ | 12,066,255 | $ | 14,445,779 | ||||
| Sewage treatment services and others | 620,453 | 1,018,024 | ||||||
| Total revenues | 12,686,708 | 15,463,803 | ||||||
| COST OF REVENUES | ||||||||
| Sewage treatment systems | 7,869,468 | 9,947,063 | ||||||
| Sewage treatment services and others | 315,405 | 692,580 | ||||||
| Total cost of revenues | 8,184,873 | 10,639,643 | ||||||
| GROSS PROFIT | 4,501,835 | 4,824,160 | ||||||
| OPERATING EXPENSES: | ||||||||
| Selling | 25,725 | 51,435 | ||||||
| General and administrative | 1,361,481 | 1,292,367 | ||||||
| Research and development | 34,706 | 42,829 | ||||||
| Stock-based compensation | 454,250 | - | ||||||
| Provision for credit loss, net | 795,757 | 1,090,957 | ||||||
| Total operating expenses | 2,671,919 | 2,477,588 | ||||||
| INCOME FROM OPERATIONS | 1,829,916 | 2,346,572 | ||||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income | 138 | 7,448 | ||||||
| Interest expense | (69,446 | ) | (47,301 | ) | ||||
| Other (expense) income, net | 58,212 | (69,240 | ) | |||||
| Total other expense, net | (11,096 | ) | (109,093 | ) | ||||
| INCOME BEFORE INCOME TAXES | 1,818,820 | 2,237,479 | ||||||
| INCOME TAXES EXPENSE | 401,401 | 429,197 | ||||||
| NET INCOME | 1,417,419 | 1,808,282 | ||||||
| Less: net loss attributable to noncontrolling interest | (51,609 | ) | (225,703 | ) | ||||
| NET INCOME ATTRIBUTABLE TO | ||||||||
| CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED | $ | 1,469,028 | $ | 2,033,985 | ||||
| NET INCOME | 1,417,419 | 1,808,282 | ||||||
| FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (249,654 | ) | (1,011,712 | ) | ||||
| TOTAL COMPREHENSIVE INCOME | 1,167,765 | 796,570 | ||||||
| Less: Comprehensive loss attributable to noncontrolling interest | (54,451 | ) | (222,237 | ) | ||||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO | ||||||||
| CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED | $ | 1,222,216 | $ | 1,018,807 | ||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||
| Basic and diluted | 9,810,714 | 9,200,000 | ||||||
| EARNINGS PER SHARE | ||||||||
| Basic and diluted | $ | 0.14 | $ | 0.22 | ||||
| CDT ENVIRONMENTAL TECHNOLOGY INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 96,324 | $ | 268,102 | ||||
| Accounts receivable, net | 41,317,558 | 29,076,549 | ||||||
| Other receivables, net | 315,758 | 418,891 | ||||||
| Other receivables - related parties | 121,722 | 115,718 | ||||||
| Contract assets | 29,634,565 | 34,280,084 | ||||||
| Prepayments and other current assets, net | 461,749 | 582,149 | ||||||
| Total current assets | 71,947,676 | 64,741,493 | ||||||
| OTHER ASSETS | ||||||||
| Property and equipment, net | 1,403,927 | 1,695,348 | ||||||
| Right-of-use assets, net | 44,150 | 210,058 | ||||||
| Intangible assets, net | 10,987 | 16,397 | ||||||
| Deferred tax assets, net | 369,407 | 252,882 | ||||||
| Contract assets, noncurrent | 4,885,755 | 4,885,755 | ||||||
| Prepaid initial public offering ("IPO”) costs | - | 989,628 | ||||||
| Escrow receivable | 600,000 | - | ||||||
| Total other assets | 7,314,226 | 8,050,068 | ||||||
| Total assets | $ | 79,261,902 | $ | 72,791,561 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 27,129,736 | $ | 23,784,781 | ||||
| Short-term loans - banks | 1,901,205 | 2,728,385 | ||||||
| Short-term loans - third parties | 773,980 | 312,028 | ||||||
| Short-term loans - related parties | 2,681,915 | 5,386,156 | ||||||
| Other payables and accrued liabilities | 1,827,424 | 2,466,501 | ||||||
| Other payables - related parties | 241,408 | 270,806 | ||||||
| Contract liabilities | 28,254 | 28,430 | ||||||
| Taxes payable | 7,042,632 | 5,423,955 | ||||||
| Lease liabilities | 53,900 | 118,833 | ||||||
| Total current liabilities | 41,680,454 | 40,519,875 | ||||||
| OTHER LIABILITIES | ||||||||
| Long-term loan - bank | 79,463 | 79,463 | ||||||
| Lease liabilities, non-current | 1,987 | 105,980 | ||||||
| Total other liabilities | 81,450 | 185,443 | ||||||
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