From January to September 2009, the company achieved operating income of 392 million yuan, a year-on-year decrease of 28.21%; operating profit of 85 million yuan, a year-on-year decrease of 112.86%; net profit attributable to owners of the parent company was 0.04 million yuan, a decrease of 99.3% over the previous year; and EPS 0.002 yuan.
Among them, in the third quarter, operating income was 137 million yuan, a year-on-year decrease of 27.84%; operating profit of -45 million yuan, a year-on-year decrease of 106.17%; net profit attributable to owners of parent companies was 0.2 million yuan, a year-on-year decrease of 99.71%; and EPS 0.001 yuan.
Assets are being sold, and the company's business is shrinking. On the one hand, on August 12, 2008, the company sold 96.47% of the shares of Guangxi Liuzhou Honghua Hydropower Co., Ltd. (230,000 kilowatts). Meanwhile, on February 10, 2009, the company signed a “Letter of Intent to Transfer Shares” with Guangxi Investment Group to transfer 61.9% of the shares held in Guangxi Liuzhou Guiliu Hydropower Co., Ltd. (90,000 kilowatts) and 95.4% of Guangxi Rongshui Guding Hydropower Co., Ltd. (80,000 kilowatts). Meanwhile, on 2009/6/24, the company transferred 12.78% of its shares in Meixian Jieyuan Hydropower Company. The company's electricity business is in a contraction period. On the other hand, the company decided to gradually withdraw from the construction and installation industry. During the reporting period, the company transferred 75%, 75%, and 100% of its shares in Meixian Meiyan Building Decoration Engineering Co., Ltd., Meiyan Infrastructure Engineering Co., Ltd., and Meiyan Construction Engineering Co., Ltd., respectively. Overall, the company's business is in a period of contraction, which is conducive to making room for subsequent development.
The loan period was restructured to ease the company's short-term debt repayment pressure. On August 17, 2009, China Construction Bank agreed that the company would restructure the loan term of 405 million yuan. Among them, the short-term loan period for the company headquarters of 290 million yuan was changed from 1 year to 12 years, and the loan term of the holding subsidiary Longshang Hydropower of 115 million yuan was changed from 10 years to 12 years. Meanwhile, on September 25, 2009, the Agricultural Bank of China agreed that the company would restructure the overdue loan of 370 million yuan and change the loan period from 1 year to 14 years.
Although loan term restructuring increased the company's interest expenses, it suspended the company's short-term debt repayment pressure, reduced the company's short-term financial risk, and was beneficial to the company's long-term development.
Investment returns have been drastically reduced, hampering the company's performance. In the same period of 2008, the company received an investment income of 854 million yuan due to the sale of 96.47% of Guangxi Liuzhou Honghua Hydropower Co., Ltd.'s shares. As a result, investment income fell 97.35% year-on-year to 24 million yuan during the reporting period, which was the main reason for the sharp decline in performance. If investment income is excluded, the company's performance has improved markedly during the reporting period.
Risk warning. 1. Uncertainty of water conditions; 2. Financial risk.