Continental Holdings Corp. (CHC, TWSE stock symbol 3703) today announced its 2016 financial results and 2017 operational plans. In 2016, CHC and its subsidiaries had consolidated revenue of NT$24.537 billion and net profit of NT$529 million, translating into earnings per share of NT$0.64. CHC plans to distribute per-share cash dividends of NT$0.5.

 

Ken Hung, CEO of CHC said: “CHC’s 2016 total revenue was a record in recent years, while net profit was on par with the previous year.” He added: “Compared to 2015’s operating income of minus 227 million, in 2016 it rose to NT$319 million, indicating our core business is making a turnaround. With CHC subsidiaries CEC and HEC winning major projects in 2016, and new projects launched by CDC, a steady growth in revenue is expected to continue.”

 

Each of CHC’s three business units reached its target in 2016. In terms of engineering construction, overseas losses narrowed because of restructuring efforts in the management level and introduction of management tools. For real estate development, net profit margin was kept at above 30 percent even amid a slowdown in the housing industry. As for environment project development, we continued to get new projects due to strategic partnerships and our cumulative experience. Revenues of our three major BUs in 2016 relevant to the group total, as well as their 2017 operational goals, are detailed as below.

 

Engineering Construction: Respective focus for Taiwan and overseas market

 

Civil/Building construction accounted for the biggest share in CHC’s 2016 revenue total, at 82.8 percent. CEC and its subsidiaries contributed the bulk of the income, totaling approximately NT$20.3 billion, mainly from two sources – metro projects and building construction projects, accounting for 51.9% and 27.14% of the total, respectively. In 2017, our primary civil construction focus in Taiwan will be metro projects. As for building construction, residential aside, hotels and commercial buildings will also be our target. Overseas, we’ll concentrate on our HK business as well as strengthening our project implementations overseas.

 

Real estate: Aiming for product diversification

 

Real estate development accounted for 14.27% of CHC’s total revenue. Income mostly came from CDC, totaling approximately NT$3.5 billion. Effects of the government’s housing control policies and increased property transaction cost lingered in the market, which we believe will continue to see low sales and prices in 2017. As a result, our real estate development efforts will not be limited to residential buildings – commercial properties, hotels or any project that optimizes land utilization will be considered. In terms of land development, we’ll continue to focus on Taipei, New Taipei and Taichung Cities and widen our reach to other areas as well.

 

Environmental project development: steady income via business development

 

The environmental project development business brought CHC a steady source of income, contributing 2.76% of CHC’s 2016 total revenue. Besides existing projects, HEC in 2016 won the Chung-Li Area Sewerage System BOT Project (JV with CTCI), Feng-Shan River Wastewater Reclamation and Reuse BTO project (JV with CTCI) and Pu-Ding Sewerage System BOT Project, which will continue to inject steady incomes into CHC. In the future, aside from its wastewater and recycled water businesses, HEC will develop new business in biomass energy and solid waste sectors.