Citic Envirotech’s net profit plunges 85% to $3.3m

Blame it on a one-off expense.

Citic Envirotech (CEL)’s reported net profit crashed 85% to $3.3m in the first quarter, despite a double-digit increase in revenue.

The sharp increase in the group’s treatment revenue was offset by a one-off expense related to the offer by CKM (Cayman) Company worth $6.5m.

According to OCBC, CEL is under threat from a new value added tax for water treatment companies and the recent CNY valuation.

Despite these threats, the company is still upbeat on its overall prospects in China, particularly in terms of membrane sales.

"It has already started to expand its membrane production capacity and should double its output to 10m m2 by early next year. In addition, CEL hopes to leverage on its Citic connection to expand its geographical reach in China,” said OCBC.