15 Mar 2022
Everbright Environment Announces 2021 Annual Results
|For the year ended 31 December|
|Earnings before interest, taxation, depreciation and amortisation ("EBITDA")||15,027,003||12,851,501||17%|
|Profit attributable to equity holders of the Company||6,804,099||6,015,863||13%|
|Basic earnings per share (HK cents)||110.76||97.93||13%|
|Final dividend (HK cents)||15.0||16.0||(6%)|
|Total dividend (HK cents)||34.0||30.0||13%|
15 March 2022, Hong Kong – China Everbright Environment Group Limited ("Everbright Environment" or the "Company") (SEHK: 257) is pleased to announce the consolidated results of the Company and its subsidiaries (collectively the "Group") for the year ended 31 December 2021 ("2021" or the "year under review").
Facing new situations, challenges and opportunities, during the year under review, the Group upheld "Value Creation" as its core and focused on "Reducing Pollution and Carbon Emissions" and "Solidifying Existing Strength and Pursuing Innovation". In addition to setting the development targets and action plan of "Becoming Carbon-Negative Enterprise, Developing Zero-Carbon Plants, and Pursuing Low-Carbon Lifestyle" ("Three Carbons"), the Group implemented its "Three Five Eight Seven" development strategies. By following the trends, striving despite the difficulties, and fighting against various challenges, it steadily carried out the strategic transformation and continued to achieve growth in both scale and profit
In terms of operating results, during the year under review, the Group's traditional business sectors continued to develop and progress steadily, while the emerging business sectors gained momentum through active exploration. It had diverse access to financing channels, including both short- and long-term financing tools, with abundant capital and good results across all financial indicators. The Group's revenue amounted to approximately HK$49.895 billion, an increase of 16% from the year ended 31 December 2020 ("2020"); EBITDA amounted to approximately HK$15.027 billion, an increase of 17% from 2020; profit attributable to equity holders of the Company was approximately HK$6.804 billion, an increase of 13% from 2020; basic earnings per share was HK110.76 cents, an increase of 13% from 2020. In addition, the Group recorded a total revenue of approximately HK$48.364 billion from its environmental energy, greentech and environmental water sectors, of which revenue from construction services increased by 5% from 2020 to approximately HK$26.84 billion, and revenue from operation services increased by 35% from 2020 to approximately HK$16.605 billion. The revenue from construction services, operation services and finance income accounts for 56%, 34% and 10% of the total, respectively.
In terms of market expansion, during the year under review, the Group made steady progress against fierce market competition. While steadily expanding its traditional businesses such as waste-to-energy and water treatment, the Group also actively made a great effort in developing synergistic businesses such as food and kitchen waste treatment, sludge treatment and disposal, as well as waste sorting and transfer, and fully promoted the expansion of emerging businesses such as resource recycling, energy-saving lighting and environmental planning and design. In doing so, the Group aims to build a business portfolio with the co-development of asset-light and asset-heavy businesses, co-development of municipal and consumer businesses, and expansion of domestic and overseas businesses. During the year under review, the Group made breakthroughs in the solid waste treatment market in the Xinjiang Uygur Autonomous Region ("Xinjiang"), the water services markets in Tianjin Municipality, Hebei Province and Mauritius, the solar energy market in the Hong Kong Special Administrative Region of the PRC ("Hong Kong"), and the waste sorting market in Changzhou City and Wujiang District of Suzhou City, Jiangsu Province, further improving the Group's domestic and overseas market presence. In 2021, the Group signed 69 new projects (including projects secured through acquisitions) and 2 supplementary agreements on existing projects, commanding a total investment of approximately RMB13.248 billion, covering various business areas such as waste-to-energy, food and kitchen waste treatment, waste sorting, solar energy and water treatment. It also undertook 2 waste sorting services, 6 environmental remediation services, 8 engineering, procurement and construction ("EPC") projects, 2 energy management contract ("EMC") projects, 1 operation and management ("O&M") project and 1 equipment supply service, with an aggregate contract value of approximately RMB331 million. The major designed treatment and supply capacities of the new projects secured include 13,100 tonnes/day of household waste, 1,780 tonnes/day of food and kitchen waste, 100,000 tonnes/year of hazardous and solid waste, 598,000 tonnes/year of steam supply, and 543,000 m3/day of water treatment.
As of 31 December 2021, the Group had a business presence in more than 210 locations across 25 provinces, municipalities, autonomous regions and special administrative region in China, with overseas business markets in Germany, Poland, Vietnam and Mauritius. The Group secured a total of 528 environmental protection projects, with an aggregate investment of approximately RMB152.455 billion. It also undertook 42 environmental remediation services, 2 waste sorting services, 22 EPC projects, 5 EMC projects and 4 O&M projects. As the world's largest waste-to-energy investor and operator, the Group had a total of 176 waste-to-energy projects under its environmental energy and greentech sectors, with an aggregate designed daily household waste processing capacity of 150,300 tonnes.
In respect to project construction, during the year under review, the Group continued to adhere to the seven principles of "productivity, efficiency, quality, cost-effectiveness, legitimacy, safety and integrity" and strictly complied with the requirements of effective COVID-19 pandemic (the "Pandemic") prevention and control measures in various places, and gave full play to the dynamic management of the construction progress of each project, ensuring the orderly progress of various project construction works, which continued to boost construction service revenue. In 2021, 91 projects completed construction and commenced operation, and 8 projects completed construction. Meanwhile, 51 projects commenced construction, together with 6 environmental remediation services, 1 waste sorting service, 4 EMC projects and 9 EPC projects that were completed and delivered.
In terms of operations management, during the year under review, the Group, with a focus on "Cost Reduction and Efficiency Enhancement" and "Value Creation", continued to uphold stringent management standards. On the basis of ensuring stable operation and compliance with relevant emission standards, the Group proactively promoted digitalisation and intelligent management, as well as enhanced the platform roles of its projects, to further strengthen and refine its operations management proficiency, reduce costs and increase efficiency.
During the year under review, the Group actively followed the national strategic goals of "Peaking Carbon Emissions" and "Achieving Carbon Neutrality" ("Dual Carbons"), and focused on the "Three Carbons" development targets and action plan. It increased investment in and accelerated relevant works relating to "Carbon Emission Reduction", such as research and studies, technology research, pilot programmes and relevant exploration, with satisfying progress. In terms of research and studies, the Group organised a number of discussion and exchange activities around the "Dual Carbons" theme, such as lectures, seminars and symposiums, to enhance the knowledge, depth of understanding and breadth of vision in the field of "Dual Carbons"; the Group also organised the drafting of reports, action plans and the White Paper on Environmental Protection and Carbon Neutrality, relating to the "Dual Carbons" theme. In terms of technology research, the Group independently developed and improved its carbon emission calculation model in line with the domestic situation and its own condition, to assess the Group's carbon emission level and develop future carbon emission reduction plans; additionally, the Group established the Carbon-Neutrality Technology Research and Development Center, in a bid to build an innovation platform for the "Dual Carbons" strategies; it also carried out research into core technologies relating to the "Dual Carbons" theme, such as carbon capture technology and equipment. In terms of pilot programmes and relevant practices, the Group undertook a pilot project on the on-site monitoring of greenhouse gas emission monitoring, which was initiated by the Ministry of Ecology and Environment of the PRC, helping to lay a solid foundation for the national carbon emission calculation for relevant industries; in addition, China Everbright Water Limited ("Everbright Water"), a listed subsidiary of the Company, launched an "in-plant solar energy" pilot programme at its waste water treatment project in Zibo, Shandong Province, and such solar energy facilities were connected to the power grid in August 2021; in the meantime, the Group's equipment manufacturing sector built solar energy facilities on the roof of its plants, which were also connected to the power grid as early as in July 2021, laying a good foundation for future expansion of such pilot projects.
During the year under review, the Group also carried out work with innovation. In terms of business areas, it explored synergistic businesses based on its traditional business areas, while expanding new businesses, such as water purifiers and energy-saving products. In terms of business models, it actively participated in new models, such as the mixed-ownership reform of China's state-owned enterprises. In terms of technology research and development ("R&D"), it continued to carry out technology R&D and application in the areas of solid waste treatment, biomass utilisation, waste sorting, intelligent control and others, with positive progress. In terms of financing channels, the Company and its subsidiaries expanded its financing channels that incorporate long- and short-term financing tools, such as medium-term notes, super & short-term commercial papers, asset-backed notes with receivables relating to the national subsidies, and "Carbon Neutrality"-linked bonds, further diversifying the Group's financing channels.
Environmental EnergyDuring the year under review, the Group's environmental energy sector faced challenges in the market, with increasingly fierce market competition in 2021. It focused on three major business areas and leveraged the Group's "Five Points in One Line" process model for waste sorting, which includes sorting, transferring, selecting, recycling and incinerating waste. While solidifying its leading position in the waste-to-energy industry, environmental energy actively expanded waste-to-energy synergy businesses. In 2021, environmental energy secured 23 waste-to-energy synergistic projects. The sector signed Shihezi Integrated Waste Treatment Public-Private Partnership ("PPP") Project in Xinjiang, extending the Group's business presence to Xinjiang and enhancing the Group's strategic position in northwest China. During the year under review, environmental energy secured 36 new projects (including projects secured through acquisition), with a total investment of approximately RMB7.842 billion, in addition to undertaking 1 EPC project, with a contract value of RMB28 million. The newly secured projects contribute a total designed daily household waste processing capacity of 11,800 tonnes and a designed daily food and kitchen waste processing capacity of 1,780 tonnes.
In terms of project construction, during the year under review, environmental energy had 64 projects that completed construction and commenced operation. These projects are designed to have a daily household waste processing capacity of 38,400 tonnes and a daily food and kitchen waste processing capacity of 2,945 tonnes. 35 projects (including 1 EPC project) commenced construction, with a designed daily household waste processing capacity of 13,000 tonnes and a designed daily food and kitchen waste processing capacity of 2,290 tonnes. It is worth mentioning that, during the year under review, the Group's Zhejiang Quzhou Waste-to-energy Project received the Luban Prize, the highest recognition in China's construction industry. The project represents the Group's third environmental protection project that has received this prestigious honor, following Shandong Ji'nan Waste-to-energy Project and Zhejiang Hangzhou Waste-to-energy Project. The latest recognition fully reflects the excellence of the Group and environmental energy in terms of engineering planning, construction and management in the field of environmental protection.
As of 31 December 2021, environmental energy had invested in and held 230 projects, commanding a total investment of approximately RMB89.865 billion, and undertook 1 O&M project and 5 EPC projects, which are designed to have an annual household waste processing capacity of 50,789,750 tonnes, which is expected to generate 17,103,380,763 kWh of annual on-grid electricity; an annual food and kitchen waste processing capacity of 2,215,550 tonnes; an annual sludge treatment capacity of 394,200 tonnes; and an annual medical waste processing capacity of 12,775 tonnes.
GreentechAs of 31 December 2021, the Group held a 69.7% stake in China Everbright Greentech Limited ("Everbright Greentech").
With respect to market development, during the year under review, Everbright Greentech acquired a 60% equity stake in Kellon Green Energy Limited, achieving a breakthrough in Hong Kong's solar energy market, which marks the Group's business entry into the city. In 2021, Everbright Greentech secured 17 new projects and signed 2 supplementary agreements for existing projects, which command a total investment of approximately RMB1.201 billion. It also undertook 6 environmental remediation services, with a total contract value of approximately RMB150 million. The new projects are designed to have an annual household waste processing capacity of 474,500 tonnes, an annual steam supply capacity of 598,800 tonnes, an annual hazardous and solid waste processing capacity of 100,000 tonnes, and an installed capacity of 7.07 MW for solar energy.
In respect to project construction, during the year under review, Everbright Greentech had 16 projects that completed construction and commenced operation, in addition to 5 projects that completed construction, contributing a designed annual household waste processing capacity of 1,007,400 tonnes, and an annual hazardous and solid waste processing capacity of 753,800 tonnes. 6 environmental remediation services were completed and delivered in 2021. Separately, 11 projects commenced construction, with a designed annual hazardous and solid waste processing capacity of 852,500 tonnes. 6 environmental remediation services started respective remediation work in succession.
As of 31 December 2021, Everbright Greentech had invested in 137 environmental protection projects, with a total investment of approximately RMB32.891 billion. These projects are designed to have an annual biomass raw material processing capacity of 8,089,800 tonnes, an annual household waste processing capacity of 4,069,750 tonnes, and an annual hazardous and solid waste processing capacity of 2,941,900 tonnes, which are expected to generate 6,960,034,055 kWh of annual on-grid electricity and 5,118,000 tonnes of annual steam supply.
Environmental WaterAs of 31 December 2021, the Group held a 72.87% stake in Everbright Water.
In terms of market development, during the year under review, Everbright Water strode into two new domestic markets, Tianjin and Hebei, and consolidated its business layout in the Beijing-Tianjin-Hebei strategic region. Everbright Water also undertook its first overseas O&M project in Mauritius, laying a good foundation for further breakthroughs in overseas markets going forward. During the year under review, Everbright Water secured 15 new projects, with a total investment of approximately RMB3.756 billion, and also undertook 1 O&M project and 1 EPC project. The new projects are designed to have a daily waste water treatment capacity of 489,000 m3 and a daily reusable water supply of 54,000 m3.
In terms of project construction, Everbright Water continued to carry out its project construction work in an orderly manner. During the year under review, 6 projects (including 1 EPC project) commenced construction, with a total designed daily water treatment capacity of 130,000 m3. 11 projects completed construction and commenced operation and 5 projects (including EPC projects) completed construction, with a total designed daily water treatment capacity of 321,500 m3.
As of 31 December 2021, Everbright Water had invested in and held 153 water projects, commanding a total investment of approximately RMB28.434 billion. It also secured 4 EPC projects and 3 O&M projects. These projects are designed to have an annual waste water treatment capacity of 2,175,619,000 m3, an annual reusable water supply capacity of 91,469,000 m3, and an annual water supply capacity of 310,250,000 m3. The waste water source heat pump projects provide heating and cooling services to an area of 295,000 m2.
Equipment ManufacturingIn 2021, the Group's equipment manufacturing sector leveraged Everbright environmental Technical Equipment (Changzhou) Limited as the main platform to actively establish a new development structure that combines traditional and new business. The sector has also further solidified its industry-leading position.
In terms of market expansion, during the year under review, equipment manufacturing actively explored the business fields of food and kitchen waste treatment, hazardous waste treatment, medical waste treatment and industrial waste treatment, as well as expanded into overseas markets including India, Bulgaria and Thailand. In 2021, the sector signed 26 external sales contracts and sold 44 sets of equipment to external markets, covering grate furnaces, flue gas purification systems and leachate treatment systems. It also secured contracts relating to the external sale of completed sets of equipment amounting to a total contract value of RMB926 million in 2021. In addition, equipment manufacturing set up the Everbright Electric Appliance Division and launched a series of water purifier products during the year under review. Beginning with the water purifier series, the division actively explores and deploys strategic layout of the consumer market, with positive progress in the sales of such consumer products.
In terms of equipment supply and services, during the year under review, equipment manufacturing commenced 53 service items, spanning 19 provinces, municipalities and autonomous regions in China. It provided 38 sets of grate furnaces to projects of the Group and external clients, which have a designed daily waste processing capacity of 19,500 tonnes. In addition, it sold 109 sets of equipment.
In terms of after-sales services, during the year under review, equipment manufacturing actively developed services that cover projects' full-life cycles. Equipment manufacturing signed 160 contracts in relation to external after-sales services, worth a total contract value of approximately RMB124 million. Throughout 2021, the sector provided 217 after-sales service projects.
During the year under review, equipment manufacturing insisted on technological innovation and put emphasis on market demand and changes, and made a great effort to promote technology and product optimisation and innovative R&D, carrying out a number of technical projects and researches. In addition, the Group's self-developed 1,000 tonnes/day grate furnace was successfully applied in the Group's Jiangsu Wujiang Waste-to-energy Project during the year under review.
Eco-recyclingIn 2021, the Group's eco-recycling sector rode on the "Five Points in One Line" process model for waste sorting and the strategic plan of "One Body and Two Wings", with a focus on three main business areas, namely waste sorting and zero-waste cities, environmental sanitation integration, and resource recycling.
During the year under review, eco-recycling secured Shandong Ji'nan Kitchen Waste Treatment Project ("Ji'nan Kitchen Waste Project") with an investment of approximately RMB449 million. It also signed contracts for Changzhou Economic Zone Waste Sorting Pilot Service ("Changzhou Waste Sorting Service") and Region-wide waste sorting service in Suzhou Wujiang Qidu Town, Jiangsu Province. Among these projects, Changzhou Waste Sorting Service commenced operation, and Ji'nan Kitchen Waste Project commenced construction, during the year under review.
GreenergyIn 2021, the Group's greenergy sector focused on the R&D, manufacturing and sales of energy-saving healthy lighting products, as well as software and hardware products relating to the development of smart cities that are based on greenergy's intelligent light poles. Greenergy aims to provide lighting services for different scenarios and purposes, including urban streets and tourism sites, in addition to solutions for the development of smart cities.
In terms of market expansion, during the year under review, greenergy signed contracts, based on an EMC model, for Tianjin Jinghai Urban District Streetlight Retrofitting Project ("Tianjin Jinghai Project") and Jiangsu Nanjing Jiangbei New Material Science and Technology Park Project ("Nanjing Jiangbei Project"). In addition, greenergy secured 6 EPC projects (including 1 project secured through acquisition) in Shandong, Jiangsu, Shaanxi, Zhejiang and Guangdong Provinces; the sector also obtained 1 equipment supply service in Guangdong, with a total contract value of approximately RMB115 million. Greenergy also signed 74 contracts for the external direct sales of the Everbright New Sodium Lamps and LED lamps, with a contract value of approximately RMB12.69 million in total.
In terms of project construction, during the year under review, greenergy's Tianjin Jinghai Project, Nanjing Jiangbei Project, Shandong Ji'nan Streetlight Retrofitting EMC Project and Tengzhou Streetlight Retrofitting EMC Project completed construction. In terms of EPC projects, Shandong Ji'nan Sungeng Street Streetlight Retrofitting Project and 3 EPC projects secured by greenergy during the year under review also completed construction. Additionally, Greenergy Intelligent Industrial Park proceeded construction work in an orderly manner, which will serve as greenergy's national R&D and production base to capitalise on its advantages in energy-saving lighting technology and product scale production.
In addition, greenergy actively promoted the R&D and optimisation of its lighting products, which laid a solid foundation to improve its product portfolio and expand the business scope. Greenergy's Shenzhen branch obtained the 3A Enterprise Credit Certification and 5A Energy Performance Contracting Certification; while the sector's Ji'nan branch obtained the qualification for Municipal Construction General Contracting Works as well as Grade III Qualification for Urban and Road Lighting Project and Nanjing branch obtained "Three-System" Certification.
EnvirotechIn 2021, the Group's envirotech sector had been leveraging its "Four-in-One" technological innovation and R&D layout with platforms in Hong Kong, Shenzhen, Nanjing and Qingdao, to foster and accelerate the Group's strategic transformation, structure optimisation and new business development. The sector aims to become a global platform dedicated to green technological innovation and conversion
In terms of R&D layout, in 2021, envirotech strived to cater to the development of traditional business, new business and the future development needs, and to promote R&D work. By responding to the needs of the Group's other business sectors to facilitate their business development, envirotech completed many technical support services for system designs, covering grate furnace, flue gas purification, leachate treatment, control systems and others. During the year under review, the Group reached a cooperation agreement with Hong Kong Science and Technology Parks Corporation to become strategic partners with each other, in an attempt to launch a green technology incubation and commercialisation platform in Hong Kong to support the development of start-ups in the industry, jointly fostering the development of green technological innovation in the city.
In 2021, the Group was granted a total of 283 patents (including 24 invention patents, 161 utility patents, 81 software copyright licenses and 17 appearance patents), and also published 18 major technical papers. As of 31 December 2021, the Group had been granted over 1,300 patents in total.
Environmental PlanningIn 2021, the Group's environmental planning sector leveraged the Everbright Ecological and Environmental Planning and Design Institute (the "Institute") as the main platform, with a focus on the environmental protection and energy. It strives to build core technological capabilities, explore diversified business operations, enhance technical capabilities, and expand business scope and industry chain,
During the year under review, the Institute made an active effort to meet the needs of the Group's business sectors and undertake relevant services, while continuing to strengthen its effort to explore external business opportunities and carry out business planning. It signed a number of internal and external service contracts in the field of consulting and design, EPC and other fields, with a total contract value of approximately RMB143 million.
In terms of obtaining qualifications, during the year under review, the Institute obtained the Grade I Qualification for Professional Contracting of Environmental Protection Engineering Work, Grade A Qualification for Environmental Engineering Work for Solid Waste, and Grade B Qualification for Architecture Construction, progressing smoothly towards the goal of becoming a Grade A design institute.
Mr. Luan Zusheng, Executive Director and Chief Executive Officer of Everbright Environment, said, "In 2021, the world was still undergoing accelerated changes unseen in a century, with continued attack brought by the Pandemic. China maintained its leading position in economic development as well as the Pandemic prevention and control worldwide, starting the country's 14th Five-Year Plan off on the right foot. Under the increasingly complex and severe external environment, Everbright Environment insisted on providing quality environmental services as its top priority. It achieved rapid, healthy and steady development by overcoming domestic and international challenges, which further built upon its overall competitiveness and solidified its industry-leading position. Entering another year of challenges and opportunities, Everbright Environment will seize opportunities arising from relevant policies, face up to pressure from transformation, adhere to ‘Innovation-driven Development', strengthen its financial and capital management capabilities, and seek value that is created by management proficiency to boost the operating quality and efficiency, in a bid to steadily pursue a high-quality development path that prioritises ecology and emphasise green and low-carbon themes."
Mr. Wang Tianyi, Executive Director and the Chairman of the board of Everbright Environment, said, "Tackling climate change has become a tough task faced by countries across the world. China made a solemn ‘Dual Carbons' commitment to the international community, making it a major initiative of China's 14th Five-Year Plan and lending good momentum to China's green and low-carbon development. As China's largest environmental enterprise and a world-renowned environmental group, Everbright Environment will stay firm and committed to its original aspiration established since its transformation into the environmental protection industry. It will prioritise stability and ‘Make Progress in Stability, Pursue Excellence in Progress, and Seek Innovation in Excellence'. Stepping into a critical year of China's 14th Five-Year Plan, the Group will closely follow the national policies and grasp opportunities for development. In a vital year of corporate transformation and development, with commitment to solidifying its existing strength and seeking innovation, it will adhere to its ‘Three Carbons' development targets and its new development paradigm that includes ‘Four Major Areas', namely environment, resources, energy and climate. By focusing on both ‘reducing pollution' and ‘reducing carbon emissions', the Group will firmly carry out strategic transformation and high-quality sustainable development, to continue value creation for shareholders of the Company and all stakeholders of the Group. It will strive to reach new heights on the journey to becoming a ‘world-leading ecological and environmental group', and will also view things from a higher and a broader perspective and become stronger in order to better facilitate the national strategies!"