TIDMTNCI
RNS Number : 1871N
Tinci Holdings Ltd
26 September 2012
FOR IMMEDIATE RELEASE 26(th.) September 2012
TINCI HOLDINGS LTD
INTERIM RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2012
Tinci Holdings Ltd. (the "Company" or "Tinci") (TNCI), the AIM
quoted environmental engineering company, today announces its
unaudited interim results for the six months ended 30 June
2012.
Highlights:
-- Turnover of RMB 21.8 million against RMB 22.3 million in the
first half of 2011.
-- Difficult market environment continues to restrict available
new projects. Two new projects
won just before half year end.
-- Loss before tax of RMB 0.44 million (2011 Profit before tax
of RMB 0.75 million).
-- Company concentrating on developing Flue Gas Desulphurisation
("FGD") joint ventures in niche markets, in particular with China
Oil.
Commenting on the results David Steeds, Chairman, said;
"The first six months of 2012 were once again challenging for
Tinci's core FGD business with new business difficult to win at
reasonable margins. However, the management team continues to work
hard to cut costs to reflect the reduced sales.
We were delighted to win the contracts totaling RMB 75 million
with XinFa and JingYuan which were announced on 25 June.
The management continues to work on a number of joint ventures
with our established partners in niche markets, particularly with
China Oil. We will report to shareholders as and when progress is
made in developing these joint ventures."
For further information, please visit www.tinciholdings.com or
contact:
Tinci Holdings Ltd
David Steeds Tel: +44 (0)7836 578222
Joshua Cheng Tel: +1 512 577 4613
Westhouse Securities Limited
Martin Davison Tel: +44 (0) 20 7601 6100
Jonathan Haines
Overview of Operating Performance
Trading in the first half of 2012 was at a slightly lower level
than in 2011 but strong control of costs has limited the impact on
profit and a small loss is being reported in these results to 30
June 2012. During the period the Company won two new contracts
which were announced on 25 June 2012:
-- A contract for FGD with ShanXi XinFa Chemical Co. Ltd for RMB 65 million
-- A contract to retrofit nitrogen oxide removal with Jingyuan
2(nd) Electric Power Co. for RMB 10 million.
In the difficult market environment the Company again found it
hard to win new customers at reasonable profit margins.
As reported previously, the Company management has concluded
that it is unlikely to expand its business
simply by offering FGD in power plants, where it is in
competition with the power companies' in-house
FGD subsidiaries. The Company intends instead to focus its FGD
business in China on the petrochemical
sector, building on its good relations with China Oil as well as
existing clients with established and reliable relationships.
The Company's Order Book at 30 June 2012 adjusted for the late
contract wins noted above amounted to RMB 99 million compared to
RMB 46 million at 31 December 2011.
Future Developments
Trading in the first half of the year is typically lower than in
the second half and 2012 is expected to follow the same pattern.
Early indications are that trading in the second half of 2012 will
be ahead of the first half and the result for the whole year is
expected to show a small profit, although it is too early to
provide a clear prediction of the financial results for the full
year. Operating cash flow is expected to be marginally positive for
the full year.
Meanwhile, the Company will continue to concentrate its
resources on developing its various joint
ventures, particularly its catalytic refinery project with China
Oil, in the hope of achieving a breakthrough in
one of these new businesses while maintaining a stable income
from FGD in the current year.
Financial Performance
Revenue in the first half of 2012 decreased by 2% from RMB 22.3
million in the same period of 2011 to RMB 21.8 million; loss before
tax was RMB 0.444 million compared with a profit before tax of
RMB0.752 million for the same period last year.
The main reason for the decrease in sales revenue and net loss
was the decrease in FGD activity and in
new projects won.
Operating cash flow was negative in the first six months of 2012
due to a large reduction in accounts
payable in the period. The outflow of RMB 0.7 million compares
with an outflow of RMB 15.3 million in the
comparative period.
The Company intends to improve its financial performance by
focusing on collecting receivables, cutting
costs, and improving project management.
Outlook
The Board expects the difficult conditions in the FGD market to
persist through the remainder of 2012 and
into 2013. The Company will continue to concentrate its efforts
on:
-- Developing FGD joint ventures in niche areas with established customers/partners.
-- Developing its investment in JiangSu AnDy in speciality
chemical products, which is meeting its internal targets for its
first year of operation
-- Promoting co-operation with China oil on a catalytic refining project
-- Cutting costs and improving receivables collection
-- Improving project management with effective budgeting and cost control.
Tinci Holdings Limited
Unaudited Interim Financial Information
For the six months ended 30 June 2012
Tinci Holdings Limited
Condensed consolidated statement of comprehensive
income(Unaudited)
for the six months ended 30 June 2012
Six months Six months
ending Year ending ending
30 31 December 30
Note June 2012 2011 June 2011
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Turnover 21,854 76,840 22,307
Other revenue 271 1,264 -36
Raw material and consumables used -15,724 -52,265 -13,573
Staff costs and benefits expenses -2,812 -8,618 -3,138
Depreciation and amortisation
expenses -568 -2,028 -1,036
Other operating expenses -3,470 -12,597 -3,832
------------ ------------- ------------
(Loss)/Profit from operations -449 2,596 692
Exchange loss -2 -93 -28
Finance costs -103 -149 -212
Non-Operating Income 75 0 300
Share of profit of an associate 228 398 0
Share of losses of a jointly controlled
entity -193 -234 0
------------ ------------- ------------
(Loss)/Profit on ordinary activities
before Taxation -444 2,518 752
Taxation -30 -1,740 -430
------------ ------------- ------------
(Loss)/Profit on ordinary activities
after Taxation -474 778 322
============ ============= ============
(Loss)/Profit for the period/year -474 778 322
Other comprehensive (loss)/income
Currency translation adjustments -20 74 29
Total comprehensive (loss)/income
for the period/year -494 852 351
============ ============= ============
Total comprehensive (loss)/income
attributable to:
Shareholders of the Company -494 852 351
(Loss)/Profit per ordinary share
Basic and diluted (loss)/profit
per share (Renminbi) 6 -0.009 0.015 0.006
Tinci Holdings Limited
Condensed consolidated statement of financial
position(Unaudited)
asat 30 June 2012
At 30 At 31 At 30
December
June 2012 2011 June 2011
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Non-current assets
Land use rights 375 381 387
Property, plant and equipment 10,904 11,288 11,732
Intangible assets 1,710 1,866 5,559
Interest in an associate 39,256 39,098 24,990
Interest in a jointly controlled
entity 686 879 453
Deferred tax assets 4,464 4,464 5,571
Total non-current assets 57,395 57,976 48,692
------------ ---------- ------------
Current assets
Amount due from customers for contract
work 143 19,342 3,652
Trade and other receivables, deposits
and prepayment 171,341 152,341 188,149
Derivative financial instrument 0 45 0
Restricted bank balances 1,706 2,307 5,775
Cash and bank balances 7,132 7,229 6,545
Total current assets 180,322 181,264 204,121
------------ ---------- ------------
Total assets 237,717 239,240 252,813
Current liabilities
Amount due to customers for contract
work 0 -57 0
Trade and other payables -92,090 -93,549 -98,159
Bills payable -2,681 -1,883 -11,588
Tax payable 130 -181 3
Total current liabilities -94,641 -95,670 -109,744
------------ ---------- ------------
Net assets 143,076 143,570 143,069
============ ========== ============
Equity
Share capital 7,796 7,796 7,796
Share premium 18,078 18,078 18,078
Reverse acquisition reserve 42,644 42,644 42,644
Share options reserve 819 819 875
Translation reserve -272 -252 -297
Retained earnings 74,011 74,485 73,973
Total shareholders' equity 143,076 143,570 143,069
============ ========== ============
Tinci Holdings Limited
Condensed consolidated statement of changes in shareholders'
equity(Unaudited)
for the six months ended 30 June 2012
Six months Six months
ending Year ending ending
30 31 December 30
June 2012 2011 June 2011
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Shareholders' equity as at the beginning
of the period/year 143,570 142,718 142,718
------------ ------------- ------------
(Loss)/Profit for the period/year -474 778 322
Other comprehensive income for the
period/year
Exchange difference arising on consolidation -20 74 29
------------ ------------- ------------
Total comprehensive (loss)/income
for the period/year -494 852 351
Employee share option benefits 0 0 0
------------ ------------- ------------
Shareholders' equity as at the end
of the period/year 143,076 143,570 143,069
============ ============= ============
Tinci Holdings Limited
Condensed consolidated cash flow statement(Unaudited)
for the six months ended 30 June 2012
Six months Six months
ending Year ending ending
30 31 December 30
June 2012 2011 June 2011
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
(Loss)/Profit before taxation -444 2,518 752
Interest income -15 -150 -70
Interest expenses 103 149 212
Depreciation and amortisation expense 568 2,028 1,036
Unrealised gain on derivative financial
instruments 0 -8 0
Bad debts and provision for doubtful
debts 0 4,600 1,000
Intangible assets written off 0 3,128 0
Share of profit of an associate -228 -398 0
Share of losses of a jointly controlled
entity 193 234 0
------------ ------------- ------------
Operating profit before movements
in working capital 177 12,101 2,930
Decrease in amount due from customers
for contract work 19,199 4,828 20,518
(Increase)/decrease in trade and
other receivables, deposits and prepayment -18,955 42,132 9,961
(Decrease)/increase in amount due
to customers for contract work -57 57 0
(Decrease) in trade and other payables -1,459 -64,087 -59,477
Increase in bills payable 798 1,883 11,588
------------ ------------- ------------
Cash (used in) operations -297 -3,086 -14,480
Interest received 15 150 70
Interest paid -103 -149 -212
Current income tax paid -341 -664 -645
------------ ------------- ------------
Net cash equivalents (used in) operations -726 -3,749 -15,267
Cash flow from investing activities
Purchases of property, plant and
equipment -22 -7 -30
Investment in an associate 0 -13,640 0
Repayment/(loan) to an associate 70 -70 0
Investment in a jointly controlled
entity 0 -660 0
------------ ------------- ------------
Net cash generated from/(used in)
investing activities 48 -14,377 -30
Cash flow from financing activities
Movement in restricted bank balances 601 4,147 679
Net cash generated from financing
activities 601 4,147 679
------------ ------------- ------------
Net (decrease) in cash and cash equivalents -77 -13,979 -14,618
Cash or cash equivalents at 1 January 7,229 21,134 21,134
Effect of foreign exchange rates
changes-net -20 74 29
------------ ------------- ------------
Cash or cash equivalents at 30 June/31December 7,132 7,229 6,545
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash and bank balances 7,132 7,229 6,545
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2012
1. General information
Tinci Holdings Ltd (the "Company") is incorporated in Hong Kong
under the Hong Kong Companies Ordinance. The Company is a public
listed company and its shares are quoted on the AIM market of the
London Stock Exchange. The principal place of business of the
Company and its subsidiaries (collectively "the Group") is
Guangzhou, China.
The interim results for the six months ended 30 June 2012 are
unaudited and do not constitute statutory accounts within the
meaning of s.240 of the Companies Act 1985.
2. Basis of preparation
The Directors are responsible for the preparation of the Group's
unaudited interim financial results. These unaudited interim
financial results should be read in conjunction with the 2011
annual financial statements. The accounting policies adopted in
preparing the unaudited interim financial information for the six
months ended 30 June 2012 are consistent with those used in the
preparation of the Group's annual financial statements for the year
ended 31 December 2011.
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiary undertakings.
3. Changes in accounting policies
The accounting policies adopted in the preparation of the
Interim Financial Information are consistent with those set out in
the 2011 Financial Statements except that the Group has adopted the
following new/revised IFRS standards and interpretations
foraccounting periods commencing 1 January 2012:
IFRS 1 (Amendment) Severe hyperinflation and removal of fixed dates
for first-time adopters
IFRS 7 (Amendments) Disclosures-Transfers of financial assets
IAS 12 (Amendments) Deferred tax: Recovery of underlying asset
The adoption of the above new/revised IFRS standards and
interpretations did not have any material impact on the Group's
Interim Financial Information and has not led to any significant
changes to the Group's accounting policies.
The following new standards, interpretations and amendments to
the existing standards have been published but have not come into
effect for the financial year beginning 1 January 2012:
Effective for
annual periods
beginning
on or after
IAS 1 (Amendments) Presentation of items of other 1 July 2012
comprehensive income
IFRS 7 (Amendments) Disclosures-Offsetting financial 1 January 2013
assets and financial liabilities
IFRS 10 Consolidated financial statements 1 January 2013
IFRS 11 Joint arrangements 1 January 2013
IFRS 12 Disclosure of interests in other 1 January 2013
entities
IFRS 13 Fair value measurement 1 January 2013
IAS 19 (as revised Employee benefits 1 January 2013
in 2011)
IAS 27 (as revised Separate financial statements 1 January 2013
in 2011)
IAS 28 (as revised Investments in associates and 1 January 2013
in 2011) joint ventures
IAS 32 (Amendments) Presentation-Offsetting financial 1 January 2014
assets and
financial liabilities
IFRS 9 Financial instruments 1 January 2015
The Group has not early adopted any of the above new/revised
standards, interpretations and amendments to the existing standards
in the period. Management is in the process of making an assessment
of their impact and is not yet in a position to state whether any
substantial changes to the Group's significant accounting policies
and presentation of the financial information will result.
4. Foreign currency
The functional currency of the subsidiary undertakings is
Renminbi ("RMB"), and the presentation currency of the Group is
RMB. Transactions in currencies other than RMB are recorded at
rates of exchange prevailing on the dates of the transactions. At
each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date, and gains or losses arising
on retranslation are included in the net profit for period.
Non-monetary assets and liabilities are translated using historical
rates, and exchange rate differences arising are classified as
equity and transferred to foreign currency translation reserve.
On consolidation, the assets and liabilities of foreign
operations are translated at the exchange rate prevailing on the
balance sheet date. Income and expense items are translated at the
average exchange rates for the period/year.
For the six months ended 30 June 2012, the foreign operations'
financial statements have been translated from GBP and HKD to RMB
at the following exchange rates:
Average
Period rates Year end Average Period Average
end rate Period rates rates end rate rates
as at to as at Year to as at Period to
30 June 30 June 31 December 31 December 30 June 30 June
2012 2012 2011 2011 2011 2011
RMB: GBP 9.8169 9.9617 9.7116 10.3485 10.3986 10.5817
RMB: HKD 0.8152 0.8126 0.8107 0.8279 0.8316 0.8389
5. Turnover
The principal activity of the Company is investment holding. The
principal activities of the Group during the period were
developing, selling and installing large-scale flue gas
desulphurisation equipment to power stations.
Details of the principal activities of the wholly-owned
subsidiaries are as follows:
Subsidiaries Principal activities
World International Investment Investment holding
Limited
Guangzhou Tinci Sanhe Developing, manufacturing and installing
Environmental Engineering Co. Ltd Flue Gas Desulphurisation Systems
Turnover represented the percentage of contract revenue
completed and recognised.
Turnover for the period is wholly attributable to activities
undertaken in China.
6. (Loss)/profit per ordinary share
Year ended
6 months ended 30
June 31 December
2012 2011 2011
(unaudited) (unaudited) (audited)
(Loss)/Profit on ordinary
activities
after taxation (in RMB'000) -474 322 778
=========== =========== ===========
Weighted average number
of ordinary
shares in issue (in thousands) 52,950 52,950 52,950
=========== =========== ===========
(Loss)/Profit per ordinary
share
Basic and diluted profit/(loss)
per
share (in Reminbi) -0.009 0.006 0.015
=========== =========== ===========
7. Dividend
The Board is not recommending the payment of an interim dividend
for the six months ended 30 June 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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