TIDMTNCI
RNS Number : 6627E
Tinci Holdings Ltd
14 May 2013
14 May 2013
TINCI HOLDINGS LTD PRELIMINARY RESULTS
FOR THE 12 MONTHS ENDED 31 DECEMBER 2012
Tinci Holdings Ltd. ("Tinci", or the "Company", or the "Group"),
the AIM quoted China-based environmental engineering company, today
announces the Company's preliminary results for the twelve months
ended 31 December 2012 in accordance with International Financial
Reporting Standards (IFRS).
Financial Highlights:
-- Total revenue of RMB 56.3 million (2011 - RMB 78.1
million)
-- Loss before tax of RMB 2.90 million (2011 - Profit of RMB
2.52 million)
-- Loss after tax of RMB 2.96 million (2011 - Profit of RMB 0.78
million)
For further information, please visit www.tinciholdings.com or
contact:
Tinci Holdings Ltd
David Steeds, Chairman Tel: +44 (0)7836 578222
Joshua Cheng, Non-executive Director Tel: +1 512 577 4613
Westhouse Securities Limited
Martin Davison/ Jonathan Haines Tel: +44 (0) 20 7601 6100
About Tinci Holdings Limited
Tinci Holdings Ltd. is the parent company of Tinci Sanhe
Environmental Engineering Co. Ltd., an environmental engineering
company founded in October 2001, which is primarily involved in
developing, manufacturing and installing flue gas desulphurisation
(FGD) systems for reducing sulphur dioxide ("SO(2) ") emissions
from coal-fired power stations and large industrial boilers in
China.
Tinci is one of the leading privately owned FGD engineering
companies in Guangdong Province in Southern China. Tinci is the
only company in Guangdong Province capable of undertaking FGD
projects for small-, medium- and large-sized coal-fired electricity
plants.
Tinci is using its chemical engineering technical capabilities
to develop a portfolio of businesses and services around the
environmental engineering services sector and the speciality
chemical sector in China. The Company's shares are traded on the
AIM market of the London Stock Exchange under the symbol
'TNCI'.
Chief Executive Officer's Review
Overview of Operating Performance
After a decline in turnover in the first half year of 2012
compared to 2011, turnover in the second half improved but tight
price competition and a close review of receivables resulted in a
small loss before tax.
The Company was successful in winning two projects in the very
competitive market in 2012 with a contract value of RMB
65.8million, compared to two projects and a total contract value of
RMB 15.9 million in 2011. Of the two projects won in 2012, one
employs conventional FGD technology and the other employs LNB
technology for DeNOx.
The Company reported in 2011 that because of the extreme
competition in the FGD market in China, the Company's management
had decided that the Company should gradually transform itself from
an engineering company into a product-oriented company by
concentrating on developing processes involving the production of
chemical products as its mainline business. For FGD business, the
Company will focus on the petrochemical sector, especially through
China Oil, with whom it has close relations. The Company achieved
satisfactory progress in its catalytic refinery project with China
Oil in 2012.
The Company's order book at the end of 2012 amounted to RMB 56.2
million (2011: RMB 45.9 million) and the pipeline of potential
orders ended the year at a reasonable level. During 2013 the
Company will continue to aim to increase sales and accelerate
receivable collection so as to maintain a good cash flow, in the
process laying a solid foundation for developing new projects and
businesses, particularly in the speciality chemicals sector.
New Project Developments
1. Co-Operation with China Oil on Catalytic Refining Project
We have won one technology contract for catalytic refining
projects worth RMB 0.8 million from Lanzhou China Oil. The project
was developed in the second half of 2011 with the customer, one of
China's major petrochemical companies. The progress so far under
the co-operation agreement with China Oil is satisfactory. The
Company is hopeful of further co-operation with China Oil in
future.
2. Cooperation with Nan Fang Alkali
A co-operation with Nan Fang Alkali to develop a new project
utilizing waste alkali residue as the neutralizing agent for FGD
projects was announced in 2009. The results from this project with
Nan Fang Alkali were satisfactory in 2012.
3. Investment in JiangSu AnDy
In 2012, the Company invested RMB 13.64 million for a 22.5%
stake in JiangSu AnDy Chemical and Pharmaceutical Co. Ltd.
("JiangSu AnDy"), a private company in Jiangsu Province in China
set up by Mr Kang Hongjie, its CEO and major shareholder. The funds
are being used to finance the development of JiangSu AnDy.
The management of JiangSu AnDy, led by Mr Kang, is well known to
the Tinci Board and has been successful in developing other
chemicals businesses. Tinci's Board and senior management are
primarily chemical engineers and this is a sector that they are
familiar with. I represent the Company on the Board of JiangSu AnDy
for which I do not receive any remuneration from JiangSu AnDy.
JiangSu AnDy is involved in research & development and
production and sale of chemical intermediates for the
pharmaceutical industry in China.
Jiangsu AnDy's audited results for the 12 months ended 31
December 2012 showed profits before and after tax of RMB 2.3
million on turnover of RMB 35.3 million (2011- profit after tax of
RMB 3.2 million on turnover of RMB 40.8 million). The company had
net assets of RMB 37.7 million at that date (2011 - RMB 35.4
million).
4. Guangzhou Tiancheng Biodegradation Materials Co.,Ltd.
("GTBM")
During the year the decision was taken by the partners in GTBM
to wind down its operations because the technology could not be
proven to have the operational benefits for the production of
biodegradable plastics that had been hoped. During the year GTBM
returned RMB 15 million of capital and repaid its current account
of RMB 7.4 million with the Company. This represents the bulk of
the Company's investment in GTBM.
Financial Performance
The total business income in 2012 was RMB 55.3 million which is
28% lower than in 2011. The loss after tax was RMB 2.96 million
(compared to a profit of RMB 0.78 million in 2011).
Revenue decreased during 2012 as the Company was again unable to
win sufficient new orders because of stiff competition in the FGD
market. Receivables increased from RMB 152.3 million in 2011 to RMB
160.7 million in 2012 and payables decreased from RMB 93.6 million
in 2011 to RMB 91.5 million in 2012. The cash position increased
from RMB 7.2 million in 2011 to RMB 22.3million in 2012 mainly due
to the return of RMB 22.5 million from GTBM.
Outlook
The Company expects FGD sales to again be steady in 2013 as it
adjusts its business direction, focusing its FGD business in China
on the petrochemical sector.
The Company expects that the investment in JiangSu AnDy will
produce more profit in 2013.
Staff and Management
I would like to thank all employees in the Company for their
hard work towards the development of the Company. I am also
grateful to our shareholders for their steady support and
understanding.
XU Jinfu
Chief Executive Officer
13 May 2013
Tinci Holdings Limited
Consolidated Income Statement
Year ended 31 December 2012
Note 2012 2011
RMB'000 RMB'000
Turnover 3 55,275 76,840
Other income 3 1,043 1,264
--------- ---------
56,318 78,104
Raw material and consumables used (41,356) (52,265)
Staff costs and staff benefits
expenses (8,351) (8,618)
Depreciation and amortisation expense (1,137) (2,028)
Other operating expenses (8,705) (12,597)
--------- ---------
(Loss)/profit from operations (3,231) 2,596
Exchange loss (114) (93)
Finance costs (84) (149)
Share of profit of an associate 12 519 398
Share of losses of a jointly controlled
entity 13 13 (234)
--------- ---------
(Loss)/profit before taxation 4 (2,897) 2,518
Taxation 5 (62) (1,740)
--------- ---------
(Loss)/profit for the year (2,959) 778
--------- ---------
Attributable to:
Shareholders of the Company (2,959) 778
--------- ---------
RMB Cents RMB Cents
(Loss)/earnings per share (basic
and diluted) 7 (6) 1
--------- ---------
Tinci Holdings Limited
Consolidated Statement of Comprehensive Income
Year ended 31 December 2012
2012 2011
RMB'000 RMB'000
(Loss)/profit for the year (2,959) 778
Other comprehensive income
- Currency translation adjustments 6 74
------- -------
Total comprehensive (loss)/income
for the year (2,953) 852
------- -------
Total comprehensive (loss)/income
attributable to:
Shareholders of the Company (2,953) 852
------- -------
Tinci Holdings Limited
Consolidated Statement of Financial Position
Year Ended 31 December 2012
2012 2011
Note RMB'000 RMB'000
Assets
Non-current assets
Land use rights 9 369 381
Property, plant and equipment 10 10,474 11,288
Intangible assets 11 1,555 1,866
Interest in associates 12 17,007 39,098
Interest in a jointly controlled
entity 13 892 879
Deferred tax assets 20 4,965 4,464
--------- ---------
Total non-current assets 35,262 57,976
--------- ---------
Current assets
Amount due from customers for
contract work 14 15,802 19,342
Trade and other receivables, deposits
and prepayment 15 160,679 152,341
Derivative financial instruments 16 17 45
Restricted bank balances 17 13,041 2,307
Cash and bank balances 22,277 7,229
--------- ---------
Total current assets 211,816 181,264
--------- ---------
Total assets 247,078 239,240
--------- ---------
Liabilities
Current liabilities
Amount due to customers for contract
work 14 - 57
Trade and other payables 18 91,478 93,549
Bills payable 19 14,705 1,883
Current income tax liabilities 278 181
--------- ---------
Total current liabilities 106,461 95,670
--------- ---------
Net assets 140,617 143,570
========= =========
Equity
Share capital 21 7,796 7,796
Share premium 18,078 18,078
Other reserves 43,200 43,211
Retained earnings 71,543 74,485
--------- ---------
Total shareholders' equity 140,617 143,570
========= =========
Tinci Holdings Limited
Consolidated Statement of Changes in Equity
Year ended 31 December 2012
Share Reverse
Share Share options acquisition Retained Translation
capital premium reserve reserve earnings reserve Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
(Note ) (Note ) (Note )
21 22 23
Balance at 1 January
2011 7,796 18,078 875 42,644 73,651 (326) 142,718
Forfeiture of share
options
- previously granted
to employees - - (56 ) - 56 - -
Total comprehensive
income for the
year - - - - 778 74 852
Balance at 31
December
2011 7,796 18,078 819 42,644 74,485 (252) 143,570
======= ======= ======= =========== ======== =========== ========
Forfeiture of share
options
- previously granted
to employees - - (17 ) - 17 - -
Total comprehensive
(loss)/income for
the year - - - - (2,959 ) 6 (2,953 )
Balance at 31
December
2012 7,796 18,078 802 42,644 71,543 (246) 140,617
======= ======= ======= =========== ======== =========== ========
Tinci Holdings Limited
Consolidated Statement of Cash Flows
Year ended 31 December 2012
2012 2011
RMB'000 RMB'000
------------------------------------------------ -------- --- --------
Cash flows from operating activities
------------------------------------------------ -------- --- --------
(Loss)/profit before taxation (2,897) 2,518
Adjustments for:
Interest income (36) (150)
------------------------------------------------ -------- --------
Interest expenses 84 149
------------------------------------------------ -------- --- --------
Bad debts written off and provision
for doubtful debts 2,476 4,600
------------------------------------------------ -------- --- --------
Depreciation and amortisation expense 1,137 2,028
------------------------------------------------ -------- --- --------
Unrealised gain on derivative financial
instruments 28 (8)
------------------------------------------------ -------- --- --------
Intangible assets written off - 3,128
------------------------------------------------ -------- --- --------
Share of profit of an associate (519) (398)
------------------------------------------------ -------- --------
Share of losses of a jointly controlled
entity (12) 234
------------------------------------------------ -------- --------
Operating profit before changes in
working capital 261 12,101
------------------------------------------------ -------- --- --------
Decrease in amount due from customers
for contract work 3,540 4,828
------------------------------------------------ -------- --- --------
(Increase)/decrease in trade and other
receivables, deposits and prepayment (3,395 ) 42,132
------------------------------------------------ -------- --- --------
(Decrease)/increase in amount due
to customers for contract work (57 ) 57
------------------------------------------------ -------- --- --------
Decrease in trade and other payables (2,071) (64,087)
------------------------------------------------ -------- --------
Increase in bills payable 12,822 1,883
------------------------------------------------ -------- --- --------
Cash generated from/(used in) operations 11,100 (3,086)
------------------------------------------------ -------- --- --------
Interest received 36 150
------------------------------------------------ -------- --- --------
Interest paid (84) (149)
------------------------------------------------ -------- --------
Current income tax paid (466) (664)
------------------------------------------------ -------- --------
Net cash generated from /(used in)
operating activities 10,586 (3,749)
------------------------------------------------ -------- --- --------
Cash flows from investing activities
------------------------------------------------ -------- --- --------
Purchases of property, plant and equipment - (7)
------------------------------------------------ -------- --- --------
Investment in an associate 15,190 (13,640)
------------------------------------------------ -------- --- --------
Loan to an associate - (70)
------------------------------------------------ -------- --- --------
Investment in a jointly controlled
entity - (660)
------------------------------------------------ -------- --- --------
Net cash generated from/(used in) investing
activities 15,190 (14,377)
------------------------------------------------ -------- --- --------
Cash flows from financing activities
------------------------------------------------ -------- --- --------
Movement in restricted bank balances (10,734) 4,147
------------------------------------------------ -------- --------
Net cash (used in)/generated from financing
activities (10,734) 4,147
------------------------------------------------ -------- --------
Net increase/(decrease) in cash and
cash equivalents 15,042 (13,979)
------------------------------------------------ -------- --- --------
Cash and cash equivalents as at 1 January 7,229 21,134
------------------------------------------------ -------- --- --------
Effect of foreign exchange rates changes
- net 6 74
------------------------------------------------ -------- --- --------
Cash and cash equivalents as at 31
December 22,277 7,229
------------------------------------------------ -------- --- --------
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash and bank balances 22,277 7,229
------------------------------------------------ -------- --- --------
Tinci Holdings Limited
Notes to consolidated financial statements
1. FINANCIAL INFORMATION
The financial information set out in this announcement does not
constitute the Company's statutory accounts for the years ended 31
December 2012 or 2011. The statutory accounts for the year ended 31
December 2012 will be finalised on the basis of the financial
information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of
Companies.
2. TURNOVER, OTHER INCOME AND SEGMENTAL REPORTING
The principal activities of the Group during the year were
developing, selling and installing large-scale flue gas
desulphurisation equipment to power stations.
For the years ended 31 December 2012 and 2011, the Group
comprised only one business and one geographical segment.
Turnover for the year is wholly attributable to construction
contract revenue for activities undertaken in China. An analysis of
the Group's other income is set out below:-
Other income
2012 2011
RMB'000 RMB'000
------------------------------------- -------------------- --------------------
Rental income, net of tax 795 692
------------------------------------- -------------------- --------------------
Interest income 36 150
------------------------------------- -------------------- --------------------
Net gains/(loss) from derivative
financial instruments 6 (47)
------------------------------------- -------------------- --------------------
Miscellaneous 206 469
------------------------------------- -------------------- --------------------
1,043 1,264
------------------------------------- -------------------- --------------------
3. PROFIT/(LOSS) BEFORE TAXATION
2012 2011
This (Loss)/profit before taxation
is arrived at after charging:- RMB'000 RMB'000
------------------------------------------------------------------------- ----------- -----------
Auditor's remuneration 372 383
------------------------------------------------------------------------- ----------- -----------
Staff costs
------------------------------------------------------------------------- ----------- -----------
- Salaries and allowance 7,461 7,864
------------------------------------------------------------------------- ----------- -----------
* Contribution to defined contribution retirement plans
(note 8) 743 607
------------------------------------------------------------------------- ----------- -----------
- Other benefits 147 203
------------------------------------------------------------------------- ----------- -----------
- Employee share option benefits - -
------------------------------------------------------------------------- ----------- -----------
8,351 8,674
------------------------------------------------------------------------- ----------- -----------
Research and development expenses 541 445
------------------------------------------------------------------------- ----------- -----------
Amortisation of land use rights
(note 9) 12 12
------------------------------------------------------------------------- ----------- -----------
Depreciation (note 10) 814 885
------------------------------------------------------------------------- ----------- -----------
Amortisation of intangible assets
(note 11) 311 1,131
------------------------------------------------------------------------- ----------- -----------
Bills discounting interest 84 149
------------------------------------------------------------------------- ----------- -----------
Bad debts and provision for doubtful
debts 2,476 4,600
------------------------------------------------------------------------- ----------- -----------
Intangible assets written off - 3,128
------------------------------------------------------------------------- ----------- -----------
4. TAXATION
The Group is subject to income tax on an entity basis on profits
arising in or derived from the jurisdictions in which the Group
entities are domiciled and operate.
In 2011, Guangzhou Tinci wasrecognised as a "New High-tech
Enterprise". Qualified enterprises are entitled to preferential tax
benefits, including a reduced rate of enterprise income tax ("EIT")
of 15% for at least 3 years. Accordingly, Guangzhou Tinci is
subject to a reduced EIT rate of 15% for the fiscal years 2011 to
2013.
The Group is also subject to Hong Kong Profits Tax through the
Company and its subsidiary, World International. No provision for
Hong Kong Profits Tax has been made as the Company and World
International had no taxable income. The statutory rate of
corporate tax in Hong Kong is 16.5% (2011: 16.5%).
2012 2011
The tax charge comprises: RMB'000 RMB'000
------------------------------------------------------------- ----------- -----------
Current tax
PRC EIT
------------------------------------------------------------- ----------- -----------
- Current tax provided for the year 563 327
------------------------------------------------------------- ----------- -----------
- (Over) provision in prior years - (135)
------------------------------------------------------------- ----------- -----------
563 192
------------------------------------------------------------- ----------- -----------
Deferred taxation (note 20):
Recognition and reversal of temporary difference (501) 1,548
------------------------------------------------------------- ----------- -----------
62 1,740
------------------------------------------------------------- ----------- -----------
Deferred tax has been recognised in the financial statements due
to revenue and expenses recognised for financial reporting purposes
before being recognised for tax purposes.
A reconciliation between tax expense and accounting
(loss)/profit before taxation using the EIT rate is
as follows:-
2012 2011
RMB'000 RMB'000
----------------------------------------------- ----------- ------------
(Loss)/profit before taxation (2,897) 2,518
----------------------------------------------- ----------- ------------
Calculation at the effective EIT rate of
25% (2011: 25%) (724) 630
----------------------------------------------- ----------- ------------
Non-deductible expenses for tax purpose 1,430 1,783
----------------------------------------------- ----------- ------------
Income not subject to tax purpose (490) (304)
----------------------------------------------- ----------- ------------
Tax concession (154) (234)
----------------------------------------------- ----------- ------------
(Over) provision of tax in prior years - (135)
----------------------------------------------- ----------- ------------
Tax expense for the year 62 1,740
----------------------------------------------- ----------- ------------
5. EARNINGS PER SHARE
Basic earnings/(loss) per share
Basic earnings/(loss) per share are calculated by dividing the
profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the
year.
2012 2011
--------------------------------------------- --------------- -----------
Profit/(loss) attributable to equity holders
of the Company (RMB'000) (2,959) 778
--------------------------------------------- --------------- -----------
Weighted average number of ordinary shares
in issue 52,950,041 52,950,041
--------------------------------------------- --------------- -----------
Earnings/(loss) per share (RMB Cents per
share) (6) 1
--------------------------------------------- --------------- -----------
Diluted earnings/(loss) per share
The Company has one category of dilutive instrument - share
options.
None of the share options of the Company in issue had a dilutive
effect on the basic earnings/(loss) per share as the exercise price
is above the share price quoted in the AIM market throughout the
year. So they are considered as anti-dilutive and have not been
included in the diluted earnings/(loss) per share calculation for
the years ended 31 December 2012 and 2011.
6. SHARE CAPITAL
2012 2011
GBP GBP
------------------------------------------ ------------- -------------
Authorised:
140,000,000 ordinary shares of GBP0.01
each 1,400,000 1,400,000
------------------------------------------ ------------- -------------
RMB RMB
------------------------------------------ ------------- -------------
Issued and fully paid:
52,950,041 ordinary shares of GBP0.01
each 7,795,574 7,795,574
------------------------------------------ ------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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