Net income doubled to US$2.2M compared to Q2-'07 on revenues 30% higher than last time at just over US$3.3M.
The increase in capacity came from two units becoming operational in April at Hunan Sanjiang left bank, adding a total of 50MW.
By the end of June the company had total installed capacity of 120MW, including the acquisition that month of Jingrong Industrial Development Co Ltd in Jingrong, Guizhou, which brought 7.5MW to the portfolio.
However, the company noted that its increased output did not directly correlate to the higher installed capacity due to lower rainfall in the quarter compared to last time. Installed capacity in Q2-'07 was 65MW, stated the company.
In a statement, chief executive Xu Guosheng said: “We are very pleased to report strong results for the first time as a publicly traded company.” The firm has been quoted since May.
During Q2 the company sold its subsidiary Jiuli Hydropower Construction Co Ltd to Shenzhen Zhaoheng Industrial Co Ltd. The divestment helped reduce operating expenses in Q2.
Zhaoheng Hydropower has two subsidiaries - Hunan Sanjiang Power Co Ltd and Hunan Zhaoheng Hydropower Co Ltd. The former company has capitalised interest costs concerning the construction of the 50MW plant.
The group also has a related party, Shenzhen Zhaoheng Industrial Co Ltd, to which it sold the construction business and has begun charging interest on loans, helping to increase overall finance income. Zhaoheng Hydropower's reduced operating expenses and finance income, chiefly due to the transactions with the related party, helped improve its ratio of net income to revenues for the quarter.
The company said its priority is development of cascade systems in river basins in mainland China. It is focused on both developing and acquiring small and medium-sized plants of 5MW-100MW installed capacity.
Guosheng added: “We continue to remain positive on the future outlook of our business as we expect crude oil prices to remain high and benefit alternative energy companies. We will also benefit as the Chinese Government persists on treating hydropower as a priority in energy resources.”
