*************** Financial and Business Highlights
During the period, attributable to capital and reclaimed dredging activities in the PRC, which led to increased demand for the Group’s dredging services,the Group recorded a sparkling full year result as compared to 2010. The revenue achieved was about RMB 1,137 million, representing an increase of 203% as compared with last year. Consolidated net profit surged to RMB 303.2 million, representing an increase of 219% as compared with 2010. Earnings per share amounted to RMB 0.43, representing a year-on-year increase of 13%. During the year, the Group achieved robust growth in both financial and operational performance. For thecapital and reclamation dredging projects, the Group remained as one of the most influential privatelyowned dredging contractors in the PRC. The Group continued to engage in several major dredgingprojects. These dredging projects havecontributed to a significant portion of the Group’s total revenue, and are expected to have a huge sumof continual contribution to its future business. On the other hand, the Group acquired two cutter suction dredgers with an aggregate consideration ofaround RMB342 million that boost our capacity to cope with its back-log orders on hand. The Group entered into an agreement with a Swiss equipment supplier for theestablishment of an exclusive strategic alliance for a term of five years. Under the agreement, theGroup is appointed as the exclusive agent/distributor of the equipment supplier in certain Asianterritories, including the PRC for a series of de-watering and sludge processing equipment. Theseequipments include the world’s first container-size mobile autonomous sludge processor. By enteringinto such alliance, the Group could effectively secure the availability of the de-hydration technologybring along with this equipment in the PRC exclusively. Furthermore, the Group entered into agreements forthe purpose of conditionally acquiring an effective 51% equity interest in Jiangsu Jiaolong Salvage.Jiangsu Jiaolong Salvage is principally engaged in the business of salvaging sunk objects andcontractor of provision of engineering services for ports and channels and is recognized as one of theleading enterprises among domestic peers in China by China Diving and Salvage Industry Association*(中國潛水打撈行業協會). The acquisition would not only enable the Group to create synergy toitsexisting business, but also broadening the Group’s income stream as well as customer stream. Looking forward, Mr. Liu Kaijin, Chairman, Executive Director and Chief Executive Officer of Xiangyu Dredging, commented, “The Group sees huge demand in the dredging industry of PRC.There is anexponential growth in international trading activities in the PRC. As one of the integral parts of portinvestments, the dredging industry is set to benefit substantially from the industry boom in the nextfive years, the Capital and Reclamation Dredging Business is expected to experience growth in thisrespect.For the Environmental Protection Dredging and Water Management Business, according to the Ministryof Water Resources, there will be extensive investment in the next ten years in water resources andrelated projects, where the Group is expected to gain further business. We expect the proportion wouldkeep increasing as an important global trend.For the Dredging Related Construction Business, the Group will continue to seek contracts in thissegment that offer reasonable returns to the Group. The financial results we have achieved reflect both an increase in demand from the PRC dredgingmarket and the effective implementation of our overall business strategy. This strategy is to ensure acontinuing focus on the enhancement of the Group capital and reclamation business, accompanied bythe target market of environmental protection dredging in the PRC. ” |