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Euro Tech Holdings Company Limited Reports 2006 Year-End Results

Euro Tech Holdings Company Limited
2007-06-28 16:51 674

HONG KONG, June 28 /Xinhua-PRNewswire-FirstCall/ -- Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported financial results for the

12-month period ended December 31, 2006 ("Fiscal 2006").

The Company's revenues for Fiscal 2006 were approximately $27,161,000, an approximate 13% decrease compared to approximately $31,250,000 in the Company's fiscal year ended December 31, 2005 ("Fiscal 2005"). The net income for Fiscal 2006 was approximately $361,000, an approximate 51% decrease from Fiscal 2005 net income of approximately $733,000.

Chairman and CEO T.C. Leung stated:

"Amid the restructuring and controlled expansion of our company, the drop in revenues and net income is not contrary to our expectation.

The result reflects what we have been restructuring our company to have less dependence on distribution business which dropped approximately $4.1 millions in revenues in 2006 as a result of key suppliers either selling directly into China market, or opening the China market for more distributors than us. We have been streamlining our distribution channels and sales force by combining some of our offices with our retail shops to maintain a lean and efficient operation. On the other hand, we have been expanding our engineering business by forming an engineering company to deal with water and air pollution solution business, and spending more resources to develop water and especially air pollution monitoring instruments. As China, the world's biggest air polluter, is under great pressure to cut emissions of health-threatening sulphur dioxide which also causes acid rain and carbon dioxide which causes global warming.

To increase net income in future, we have invested in profitable companies in air pollution control business, we have signed the subscription agreement for acquisition of 20% equity interest with a company in desulphurization business in Aril 2007 and another one also in air pollution business is now in the final stage of completing the subscription agreement. To increase revenues in future, Pact Asia Pacific Ltd. ("Pact"), our subsidiary company, has set up a JV company with an Italian manufacturer and a Middle East engineering company to produce special water and wastewater treatment equipment and systems not only for China but also outside China markets. Moreover, we expect business generated from our new engineering company and Pact plus some acquisitions under discussion will also contribute to the growth in revenues and net income in future.

We are about half way to complete the restructuring of our company, and most of our new businesses and new investments are related to water, and air pollution solution business. Water and air pollutions are the biggest environmental issues on top of the global warming issue China has to face and is determined to combat them. We are confident that our business will pick up again once our new activities and new acquisitions are materialized and their contributions can be realized starting from the second half of 2007 to boost our bottom line and revenues."

Certain statements in this news release regarding the Company's expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company's offices and operations situated in Hong Kong and China, doing business in China, competing with Chinese manufactured products, competing with the Company's own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the "Risk Factor" discussions in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2006.

CONDENSED STATEMENTS OF OPERATIONS

(Dollar amounts in US$ thousands, except share and per share data)

As of December 31,

2006 2005 % Change

Revenue $27,161 $31,250 -13%

Net income 679 1,051 -35%

Less: Minority interest (318) (318)

Net Income attributable to the

shareholders of the company 361 733 -51%

Net Income Per Share - Basic 0.04 0.11 --

Weighted Average Number of

Ordinary Shares Outstanding - Basic 8,047,911 6,598,201 --

SELECTED BALANCE SHEET DATA

Year Ended December 31,

2006 2005 % Change

Cash and Cash Equivalents $ 9,160 $ 5,362 +71%

Total Current Assets 17,252 14,550 +19%

Total Assets 19,975 17,377 +15%

Total Current Liabilities 6,985 7,619 - 8%

Total Liabilities 6,985 7,623 - 8%

Total Shareholders' Equity 11,923 8,892 +34%

CONTACT:

Euro Tech Holdings Company Limited, Hong Kong

T.C. Leung, Chairman and CEO, or

Jerry Wong, CFO

Tel: +852-2814-0311

Fax: +852-2873-4887

Website: http://www.euro-tech.com

Source: Euro Tech Holdings Company Limited
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