|By ACN Newswire||
|August 28, 2013 11:35 PM EDT||
Hong Kong, Aug 29, 2013 - (ACN Newswire) - Over the years, in August always comes the rush hour when listed companies disclose their interim results. Given complicated and volatile global and domestic economic conditions in the first half of this year, most companies witnessed poor market performance, while some others recorded outstanding results during the first half against the headwind. Amid the gradual increase in the demand for state-level infrastructure construction in emerging markets, in virtue of its professional and superior project quality, advanced engineering technology and unique project financing edges as compared to other competitors, Chinese international infrastructure project contractors have been widely recognized in overseas infrastructure project contracting market and successfully built a high-class image for Chinese infrastructure project contractors.
At the beginning of this week, China Machinery Engineering Corporation ("CMEC") announced its 2013 interim results, indicating a solid growth in overall operation in the first half of 2013.
For the six months ended 30 June 2013, CMEC registered total revenue of RMB10, 427.4 million, representing an increase of 0.7% as compared to that of last year; operating profit of RMB1,252.4 million, representing an increase of 14.3% as compared to the same period of 2012; profit before tax of RMB1,357.1 million, representing an increase of 1.2% year on year. In addition, the backlog for CMEC was US$7,054.1 million, representing an increase of 16.6% as compared to the same period in 2012, which could fully guarantee its stable growth for the second half in 2013.
Seize Industry Potential Streamline Business Structure
During recent years, urbanization process in developing countries continues to speed up, while developed countries also constantly increase and renew infrastructure construction for the purpose of stimulating economic recovery. For the first half of 2013, global infrastructure industry has sustained steady growth as a whole.
As supported by government investments, infrastructure industry is relatively immune to economic cycles, while those sectors such as power, transportation and telecommunication continue to see steady development with tremendous potential. As China's first large-scale industrial and trading company, capturing on industry development opportunities, focusing on international engineering contracting business and concentrating in trading, R&D and international services, CMEC endeavors to become a large-scale internationalized integrated company to further integrate industry, technology and trading. The company has numerous infrastructure projects all over the world, involving power, transportation and telecommunication, petroleum, water conservancy, wastewater treatment, industrial processing and manufacturing business.
Taking a panoramic view of its performance in the first half of 2013, CMEC exerted constant efforts to streamline business structure and further increased the proportion of business sectors with more profitability and better quality.
"Light-asset, One-stop" International Engineering Contracting Business Recorded Excellent Results
As an international business contractor, CMEC had seen prominent increase in revenue and gross profit of its international engineering contracting business, obtained efficient control over trade risks and scored effective growth in the scale of other businesses. Revenue of international engineering contracting business amounted to RMB8,004.1 million, accounted for 76.8% of the total revenue, representing an increase of approximately 24.6% over the same period last year while maintaining a relatively high gross profit margin. Such increase has contributed to the company's proactive expansion in global infrastructure construction market. In the first half of 2013, the company's gross profit amounted to approximately RMB2, 022.8million, representing an increase of approximately 6.2% over the same period last year; and gross profit margin of international engineering contracting business amounted to 22.2%, among which, gross profit from power business saw sharpest increase.
The outstanding results of CMEC were attributed to its "one-stop" customized and integrated engineering contracting schemes and services, as well as the "light-asset" business model which enabled CMEC to focus on offering quality project management services and efficient financing solutions. When compared to peers, CMEC utilized lighter assets in overseas projects. By leveraging advantage of its profound experience and management capabilities in power, transportation and telecommunication, CMEC had efficiently cut down its capital input, especially in respect of large quantities of fixed assets in field of production, so as to further elevate its return on capital.
Stimulated by Lifting of Sanctions, CMEC's Business Expansion Attracts More Investors
Through the years' of constant development, CMEC has landed a prestigious position in the industry. By virtue of superior "light-asset" business model and advantages of "one-stop" contracting management, CMEC has swiftly extended its business throughout the world. Recently, the sanctions against CMEC were lifted by American government, which opens a door to new opportunities.
On June 27, 2013, Department of State of United States published public notice No. 8361 in the Federal Register in relation to a determination to lift the Chemical and Biological Weapons Proliferation Sanctions against CMEC and its subsidiary, which were imposed on them on July 9, 2002. Such lifting of sanctions is good news for the future development of international engineering contracting business of CMEC.
After the lifting of such sanctions, international contracting business of CMEC will enter into the U.S. market and its allied countries which will facilitate its business reach to countries other than the third world countries, as well as substantially increase the company's business presence in international market. Meanwhile, the ban-lifting news will also attract large quantity of new investors, providing an advantageous market environment for CMEC's operation in capital market.
Steady Development with Promising Prospects
In 2013, CMEC continues to register new orders against the prolonged downturn in global economy.
As at 20 August 2013, the company had wrapped up engineering contracting orders in various countries such as Nigeria, Bangladesh, Equatorial Guinea, South Sudan, Sri Lanka and Zimbabwe, with the value of contracts aggregating more than US$10million. On 11 July 2013, CMEC sealed a strategic partnership with General Electric, whereby the two sides will exchange industry information on a regular basis and undergo cooperative development of international engineering project to further expand CMEC's international business scope.
Looking forward to the second half of 2013, CMEC is expected to maintain steady growth in international engineering contracting business and consist on the development tendency of sustainable growth in business scale and profitability. Meanwhile, the company will vigorously proceed delicacy management, optimize project implementation, improve sub-contracting management and control mode, strengthen management and control over project design, procurement and construction. The "light-asset, one-stop" overseas engineering contracting business model will enable CMEC to record new-peak performance.
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