TIDMTNCI
RNS Number : 2887P
Tinci Holdings Ltd
30 September 2011
Tinci Holdings Limited
("Tinci" or the "Company")
INTERIM RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2011
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
2011.
Highlights:
-- Turnover down to RMB 22.3 million from RMB 36.7 million in
the first half of 2010.
-- Difficult market environment continues to restrict available
new projects but one new project won in the period.
-- Profit before tax of RMB 0.75 million (2010 Loss before tax
of RMB 3.6 million).
-- Company concentrating on developing Flue Gas Desulphurisation
("FGD") joint ventures in niche markets, in particular with China
Oil aimed at China's petrochemical industry.
-- The Company is acquiring a 22.5% shareholding in JiangSu AnDi
Chemical Co. Ltd, a manufacturer of speciality chemicals for a
total of RMB13.64 million of which RMB4.9 million has been
paid.
Commenting on the results David Steeds, Chairman, said;
"The first six months of 2011 were yet again challenging for
Tinci's core FGD business. However, the management team has worked
hard to cut costs on reduced sales.
The management continues to explore a number of possible joint
ventures with our established customers and partners in niche
markets, particularly with China Oil. We will report to
shareholders as and when progress is made in developing these joint
ventures.
The team behind JiangSu AnDi are well known to the Tinci Board
and we look forward to working with them to develop the
company."
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
Tom Price
Martin Davison Tel: +44 (0) 20 7601 6100
Overview of Operating Performance
As expected, trading in the first half of 2011 was at a lower
level than in 2010 but strong control of costs has resulted in a
small profit being reported in these results to 30 September 2011.
During the period the Company won one new contract with Jiulong
Quanzhou worth RMB 15 million. In the difficult market environment
the Company again found it hard to win new customers.
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 and to work on
developing processes involving the production of re-usable
by-products, such as sulphuric acid, as its main line business.
The Company's Order Book at 30 June 2011 amounted to RMB100
million compared to RMB 105 million at 31 December 2011.
In September the Company invested RMB 4.9 million in JiangSu
AnDi Chemical Co. Ltd. This company is developing speciality
chemical products for the pharmaceutical and chemical industries.
Tinci now owns 22.5% of this new associate company.
Future Developments
Early indications are that trading in the second half of 2011 is
expected to show a similar pattern to the first half, although it
is too early to predict the financial results for the full year.
However, operating cash flow is expected to be marginally positive
for the full year.
Since the half year end, the Company has agreed to subscribe a
total of RMB13.64 million in cash for a 22.5% shareholding in
JiangSu AnDi Chemical Co. Ltd, a private company in China set up by
Mr Kang Hongjie the CEO and major shareholder. Of this sum, RMB 4.9
million has been paid in September and the balance is due by 31
December 2011. Tinci invested alongside a private Chinese investor,
who invested on the same terms. The funds will be used to finance
the development of JiangSu AnDi.
The management of JiangSu AnDi, 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. Mr Xu, Tinci's CEO, will represent the Company on
the Board of JiangSu AnDi; he will not receive any remuneration
from JiangSu AnDi.
For the remainder of 2011 the Company expects FGD sales to slow
as it further adjusts its business direction and focuses its FGD
business in China on the petrochemical sector.
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 2011 decreased by 39% from RMB
36.74 million to RMB 22.3 million in the same period of 2010;
profit before tax was RMB 0.752 million compared with a loss before
tax of RMB 3.56 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 2011
due to a large reduction in accounts payable in the period. The
outflow of RMB15.3 million compares with an inflow of RMB 28.3
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 2011 and into 2012. 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 AnDi in speciality
chemical products
-- Promoting co-operation with Sinopec 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 2011
Tinci Holdings Limited
Condensed consolidated statement of comprehensive
income(Unaudited)
for the six months ended 30 June 2011
Six months Six months
ending Year ending ending
30 31 December 30
Note June 2011 2010 June 2010
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Turnover 22,307 109,570 36,740
Other revenue -36 604 152
Raw material and
consumables used -13,573 -90,791 -31,431
Staff costs and benefits
expenses -3,138 -8,456 -3,279
Depreciation and
amortisation expenses -1,036 -2,572 -1,251
Other operating expenses -3,832 -8,819 -4,165
Profit/(Loss) from
operations 692 -464 -3,234
Exchange (loss)/gain -28 -14 -11
Finance costs -212 -305 -317
Non-Operating Income 300 0 0
Share of losses of a
jointly controlled entity 0 -182 0
Profit/(Loss) on ordinary
activities before
Taxation 752 -965 -3,562
Taxation -430 -598 -38
Profit/(Loss) on ordinary
activities after Taxation 322 -1,563 -3,600
============ ============= ============
Profit/(Loss) for the
period/year 322 -1,563 -3,600
Other comprehensive income
for the period/year
Exchange difference
arising on
consolidation 0 -7
Total comprehensive
income/(loss) for the
period/year 322 -1,563 -3,607
============ ============= ============
Total comprehensive
income/(loss) attributable
to:
- Shareholders of the
Company 322 -1,563 -3,607
- Minority interests 0 0 0
------------ ------------- ------------
Total comprehensive
income/(loss) for the
period/year 322 -1,563 -3,607
============ ============= ============
Profit/(Loss) per ordinary
share Basic and diluted
profit/(loss) per share
(Renminbi) 6 0.006 -0.030 -0.068
Tinci Holdings Limited
Condensed consolidated statement of financial
position(Unaudited)
asat 30 June 2011
At 30 At 31 At 30
December
June 2011 2010 June 2010
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Non-current assets
Prepaid land lease 387 393 398
Property, plant and equipment 11,732 12,166 13,485
Interest in an associate 24,990 24,990 17,640
Interest in a jointly controlled
entity 453 453 635
Intangible assets 5,559 6,125 6,690
Deferred tax assets 5,571 6,012 5,630
Total non-current assets 48,692 50,139 44,478
------------ ---------- ------------
Current assets
Amount due from customers for
contract work 3,652 24,170 48,019
Trade and other receivables 188,149 199,073 171,054
Derivative Financial Instrument 37
Restricted bank balances 5,775 6,454 3,748
Cash and bank balances 6,545 21,134 25,016
Total current assets 204,121 250,868 247,837
------------ ---------- ------------
Total assets 252,813 301,007 292,315
Current liabilities
Trade and other payables -98,159 -157,636 -144,611
Bills payable -11,588 0 -1,897
Short term bank loans 0 0 -5,000
Tax payable 3 -653 -16
Total current liabilities -109,744 -158,289 -151,524
------------ ---------- ------------
Net assets 143,069 142,718 140,791
Non-current liability
Deferred tax liability 0 0 0
Net assets 143,069 142,718 140,791
============ ========== ============
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 875 875 959
Retained earnings 73,973 73,651 71,614
Translation reserve -297 -326 -300
Total shareholders' equity 143,069 142,718 140,791
============ ========== ============
Tinci Holdings Limited
Condensed consolidated statement of changes in shareholders'
equity(Unaudited)
for the six months ended 30 June 2011
Six months Six months
ending Year ending ending
30 31 December 30
June 2011 2010 June 2010
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Shareholders' equity as at the
beginning of the period/year 142,718 144,398 144,398
------------ ------------- ------------
Profit/(Loss) for the period/year 322 -1,596 -3,600
Other comprehensive income for the
period/year
Exchange difference arising on
consolidation 29 0 -7
Total comprehensive income for the
period/year 351 -1,596 -3,607
------------ ------------- ------------
Employee share option benefits 0 -84 0
------------ ------------- ------------
Shareholders' equity as at the end
of the period/year 143,069 142,718 140,791
============ ============= ============
Tinci Holdings Limited
Condensed consolidated cash flow statement(Unaudited)
for the six months ended 30 June 2011
Six months Six months
ending Year ending ending
30 31 December 30
June 2011 2010 June 2010
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Profit/(Loss) before taxation 752 -965 -3,562
Interest income -70 -128 -40
Equity-settled share option
expense 0 -84 0
Interest expenses 212 305 315
Depreciation and amortisation
expense 1,036 2,571 1,251
Unrealised gain on derivative
financial instruments 0 -37 0
Gain on disposal of property,
plant and equipment 0 -98 0
Impairment on derecognition of
financial assets 0 600 0
Provision for doubtful debts 1,000 1,534 0
Share of losses of a jointly
controlled entity 0 182 0
------------ ------------- ------------
Operating profit/(loss) before
movements in working capital 2,930 3,880 -2,036
Decrease in amount due from
customers for contract work 20,518 31,137 7,288
Decrease in trade and other
receivables 9,961 17,376 49,529
(Decrease) in trade and other
payables -59,477 -5,810 -18,933
Increase/(Decrease) in bills
payable 11,588 -2,607 -710
------------ ------------- ------------
Cash (used in)/generated from
operations -14,480 43,967 35,138
Interest received 70 128 40
Interest paid -212 -305 -315
Current income tax paid -645 -6,866 -6,561
------------ ------------- ------------
Net cash equivalents (used
in)/generated from operations -15,267 36,933 28,302
Cash flow from investing
activities
Purchases of property, plant and
equipment -30 -41 -2,610
Investment an associate 0 -7,840 -7,840
Loan to an associate 0 -7,350 0
------------ ------------- ------------
Net cash (used in) investing
activities -30 -15,231 -10,450
Cash flow from financing
activities
Repayment of bank loan 0 -15,000 -10,000
Movement in restricted bank
balances 679 -4,402 -1,696
------------ ------------- ------------
Net cash (used in) financing
Activities 679 -19,402 -11,696
Net (decrease)/increase in cash
and cash equivalents -14,618 2,300 6,156
Cash or cash equivalents at 1
January 21,134 18,867 18,867
Effect of foreign exchange rates
changes-net 29 -33 -7
Cash or cash equivalents at 30
June/31December 6,545 21,134 25,016
------------ ------------- ------------
ANALYSIS OF CASH AND CASH
EQUIVALENTS Cash and bank
balances 6,545 21,134 25,016
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2011
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 2011 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 2010
annual financial statements. The accounting policies adopted in
preparing the unaudited interim financial information for the six
months ended 30 June 2011 are consistent with those used in the
preparation of the Group's annual financial statements for the year
ended 31 December 2010.
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiary undertakings.
3. Changes in accounting policies
a. The accounting policies adopted in the preparation of the
Interim Financial Information are consistent with those set out in
the 2010 Financial Statements except that the Group has adopted the
following new/revised IFRS standards and interpretations for
accounting periods commencing 1 January 2011:
Amendment to IAS 24 Related Party Disclosures
Amendment to IAS 34 Interim Financial Reporting
Amendment to IFRIC 13 Customer Loyalty Programmes
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 2011:
Effective for
annual periods
beginning
on or after
IFRS 7 (Amendment) Disclosures - Transfers of Financial 1 July 2011
Assets
Amendment to IAS Deferred tax: Recovery of Underlying 1 January 2012
12 Assets
IAS 1 (Amendment) Presentation of Financial Statements 1 July 2012
IAS 19 (Amendment) Employee Benefits 1 January 2013
IFRS 9 Financial Instruments 1 January 2013
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 Measurements 1 January 2013
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2011
b. 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 2011, the foreign operations'
financial statements have been translated from GBP and HKD to RMB
at the following exchange rates:
Average Average Average Average
Period rates Year end rates Period rates rates
end rate Period rates as Year to end rate Period Period
as at 30 to at 31 31 as at 30 to 30 to 30
June 30 June December December June June June
2011 2011 2010 2010 2010 2010 2010
RMB: GBP 10.3986 10.5817 10.2182 10.4368 10.2135 10.3765 10.3765
RMB: HKD 0.8316 0.8389 0.8509 0.8708 0.8724 0.8775 0.8775
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.
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2011
6. (Loss)/profit per ordinary share
Year ended
6 months ended 30
June 31 December
2011 2010 2010
(unaudited) (unaudited) (audited)
(Loss)/profit on ordinary
activities
after taxation (in RMB'000) 322 -3,600 -1,563
=========== =========== ===========
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) 0.006 -0.068 -0.030
=========== =========== ===========
7. Dividend
The Board is not recommending the payment of an interim dividend
for the six months ended 30 June 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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