On February 18, Conch Environmental Protection issued a profit warning. As at 31 December 2024, the Company expects revenue of approximately RMB1.6 billion to RMB1.7 billion (2023: approximately RMB1.882 billion) and net profit attributable to equity shareholders of the Company of approximately RMB4 million to RMB10 million (2023: approximately RMB264 million) . According to
the announcement, the main reasons for the decline were:
1. Faced with many unfavorable factors such as intensified competition in the hazardous waste disposal market and the continuous decline in the operation rate of cement kilns, the Group focused on the construction of external markets, continued to strengthen internal management, optimized production organization, and strengthened the coordination of production management with cement enterprises. The "incoming volume" and "disposal volume" of solid hazardous waste still maintained a slight growth, but due to the continuous decline in the overall disposal price of the solid hazardous waste industry, the gross profit margin was compressed, and the comprehensive profitability of the Group declined.
2. The operation of some projects of the Group is under pressure, and the utilization rate of production capacity is low, which leads to the decline of profitability. The Group expects to make a provision for impairment of fixed assets.
The company said it would take a number of measures to improve its operating performance, including:
1. Adhere to the strategy of "raising the price of hazardous waste and expanding the volume of solid waste". It will further strengthen market construction and actively promote price stabilization and price increase. Strengthen the market expansion of bulk general solid waste and polluted soil, and expand the channels of bulk solid waste.
2. Committed to improve service quality, coordinate the bidding of key waste production enterprises, and enhance the stickiness of key customers.
3. Continuously strengthen the production management of cement enterprises and factories, optimize the cost control in the management process of production and procurement, and further improve the quality and efficiency of project operation.
4. Guided by the dual-carbon policy, we will accelerate the layout of alternative fuel projects, expand the source market of alternative fuels and increase the revenue of alternative fuel business segments.
5. Make full use of the advantages of industrial synergy, focus on the fields of new pollutant treatment, sludge deodorization and wall breaker, accelerate the transformation of scientific and technological achievements, further extend the chain, supplement the chain and strengthen the chain, and enhance the competitiveness of enterprises.
