LONDON (Alliance News) - Engineering and technology solutions provider China New Energy Ltd said it has seen continued success in the first half of 2018 due to changed policies in China, leading to increased production of ethanol and new contracts.
Pretax profit for the six months to the end of June rose to CNY12.0 million, or GBP1.3 million, from CNY10.6 million, or GBP1.2 million.
This was on revenue that grew by 3.8% to CNY71.4 million from CNY68.8 million the year before.
China New Energy said revenue growth was caused by the change of policy in China to increase the production of fuel ethanol, which led to winning and delivering a number of contracts from existing and new customers.
The current order book and work in progress is up to CNY294 million to be fulfilled by December 2019, including a new contract win in Russia.
Also, selling and distribution expenses dropped by 7.0% to CNY2.9 million from CNY3.1 million, although administrative expenses more than doubled to CNY6.4 million from CNY2.5 million.
This was due to increased staffing and the settlement of the Tangshan Chenhong legal case.
"I am very pleased to report that the company's continued revenue growth and profitability. Recent changes in domestic biofuel policy continue to drive demand for biorefinery projects in China, and we continue to see renewed interest in international biofuel and biochemical projects as the rising oil price makes them commercially viable again. The company has a current order book and work in progress of CNY294 million to be fulfilled by December 2019, and I am confident that the business outlook is for continued profitability," said Chairman Yu Weijun.
Shares in China New Energy were down 1.4% at 1.28 pence on Monday.
