Results 9 months 2013
ZhongDe Waste Technology AG: Weak business development despite increased order backlog
Revenues decreased by 39.8 per cent to 7.4 million Euros
EBIT amounts to -5.1 million Euros
Net loss of 5.8 million Euros
Significant increase of order backlog by 80.2 per cent to 237.2 million Euros
High cash position of 86.1 million Euros allows further investments

Frankfurt, November 28, 2013
ZhongDe Waste Technology’s business development in the first nine months of 2013 was still affected by the temporary suspension of some of ZhongDe’s EPC projects and the slow progress in the completion of the current BOT projects. Furthermore, the new accounting method for ZhongDe’s BOT projects led to lower revenues within the third quarter. Nevertheless, the strong increase of ZhongDe’s order backlog as well as the company’s good cash position are positive indicators for the future business development.

Compared to the previous year’s period, ZhongDe’s revenues decreased by 39.8 percent to 7.4 million Euros (9M 2012: 12.3 million Euros) in the first nine months 2013. The main reasons were the slow progress in the construction of ZhongDe’s current BOT projects Kunming and Xianning as well as the suspension of the two EPC projects in Zhucheng and Dingzhou. Moreover, the change in the accounting method of the BOT projects to the zero-profit-method had a negative impact. Since the beginning of the second quarter 2013,the zero-profit-method has been applied for prudential principle. Under the zero-profit-method, revenues were only recognised to the extent construction costs incurred on the referring project, which did not include the profit margins. This effect led to a reduction of revenues amounting to 0.9 million Euros in the first 9 months 2013.

Gross profit went down from 1.8 million Euros in the first 9 months 2012 to -0.7 million Euros in 2013. This was due to the application of the zero-profit accounting method as well as an adjustment of the estimated total costs of the BOT projects in Xianning and Kunming. EBIT fell to -5.1 million Euros (9M 2012: -4.2 million Euros). Net result decreased to -5.8 million Euros (9M 2012: 2.1 million Euros).

Financially well positioned for further investments
As at September 30, 2013 ZhongDe’s order backlog increased significantly by 80.2 per cent to 237.2 million Euros year-on-year. This was mainly a result of the new contract of the Wuhai EPC project amounting to 42.1 million Euros, as well as due to the BOT project in Lanzhou, which contributed with 136.3 million Euros to the order backlog.

With a cash position of 86.1 million Euros as at September 30, 2013, ZhongDe is still well prepared for further BOT investments and project financing. ZhongDe’s equity amounted to 106.5 million Euros as of September 30, 2013 (December 31, 2012: 112.8 million Euros), representing an equity ratio of 54.5 per cent (31 December 2012: 56.2 per cent).

Cautious outlook
2013 continues to be a very challenging transition period for ZhongDe. Nevertheless, the company expects the financial results of the full year 2013 to exceed the results of 2012. However, the company’s outlook for the financial performance within the full year 2013, highly depends on the ability to achieve the planned construction process of the EPC projects in Dingzhou and Zhucheng and the BOT projects Xianning and Kunming. ZhongDe plans to complete the sale of the Feicheng project and the Beijing manufacturing site until the end of 2013.

All in all, ZhongDe expects to benefit from the favorable environment for eco-friendly waste disposal, as well as from the growing demand for energy-from-waste plants in China and throughout Asia.

The BOT projects in Zhoukou, Xianning and Kunming are expected to finish the trial run period in 2014 with the approval of the local municipal governments. Furthermore, the company plans to generate more construction revenues from the Lanzhou BOT project as well as revenues from the Wuhai, Dingzhou and Zhucheng EPC projects in 2014.

Please find the complete 9-month report 2013 of ZhongDe Waste Technology AG on the company’s website under the following link:
http://www.zhongde-ag.com/investor_relations/publikationen.html


About ZhongDe Group
ZhongDe Group designs, invests, constructs, finances and operates energy-from-waste plants generating electricity from the incineration of solid municipal and industrial waste. ZhongDe realises either EPC (Engineering, Procurement and Construction) or BOT (Build, Operate and Transfer) projects, focusing on large-scale plants with waste disposal capacities of around 1,000 tons per day. Since 1996, ZhongDe Group has installed approximately 200 waste incinerators in 13 provinces throughout China. ZhongDe is one of the leading players in the project development and operation of energy-from-waste plants in China.