Financial results impacted by further project delays

H1 results 2012

Frankfurt, (PresseBox) - Within the first half year 2012, ZhongDe Waste Technology AG ("ZhongDe", "the Company", Ticker symbol "ZEF") was faced project delays which adversely affected the H1 results of the Company. The revenues of ZhongDe decreased to EUR 4.9 million (H1 2011: EUR 7.0 million) and gross profit amounted to EUR 0.4 million (H1 2011: EUR 1.5 million). However, ZhongDe still disposes of a strong cash position of EUR 106.7 million and an equity ratio of 60% as of June 30, 2012, providing the Company with the necessary financial resources for future investments and project finance. Also the order backlog still amounts to EUR 141.9 million (H1 2011: EUR 144.5 million).

In the first six months 2012 EBIT decreased to EUR -3.5 million (H1 2011: EUR -2.5 million). The net loss amounted to EUR -4.1 million, which corresponds to a decline of 27.1% compared to the first half year 2011 with a net loss of EUR -3.3 million. Next to the project delays, the main reason for this decrease were higher other operating expenses and increased finance costs, while selling and distribution costs went down by 46.2% to EUR 0.7 million and also administrative expenses decreased slightly by 6.5% to EUR 1.8 million. These reduced expenses show that ZhongDe's measures to control operating costs are successful.

Despite the negative results in H1 2012, ZhongDe still disposes of a strong cash position of EUR 106.7 million and a total equity of EUR 123.9 million which ensures that the Company remains flexible especially in the field of BOT investment, but also project finance.

The main reason for the negative development within the first half year 2012 are still the delays in the completion of waste-to-energy plants due to several internal as well as external factors including delays in the granting of various Chinese government approvals.

Regarding the future development of the Company, ZhongDe expects to benefit from the favorable economic environment for eco-friendly waste disposal as well as from the growing demand for waste-to-energy plants in China and throughout Asia. With regard to the slow recovery of the market for small-scale incinerators, ZhongDe will continue to focus on largescale waste-to-energy projects. The company is optimistic to sign one or two new project contracts in 2012, which will lead to a significant growth of order intake and order backlog. ZhongDe plans to generate recurring revenues especially with the BOT business, which delivers sustainable earnings stream from electricity sales and the waste disposal fee. The Company expects that the Zhoukou BOT project will be completed by the end of the financial year 2012 and contribute to the results as well as further construction progress of the other BOT and EPC projects. The management of ZhongDe is convinced that the company will show improved financial performance in the coming years.

ZhongDe Waste Technology AG

ZhongDe Group designs, invests, constructs, finances and operates waste-to-energy incineration plants generating electricity from the disposal of solid municipal and industrial waste. ZhongDe realises either EPC (Engineering, Procurement and Construction) or BOT (Build, Operate and Transfer) projects, focusing on large-scale plants with waste disposal capacities of around 1,000 tons per day. Since 1996, ZhongDe Group has installed approximately 200 waste incinerators in 13 provinces throughout China. ZhongDe is one of the leading players in the project development and operation of waste-to-energy plants in China.

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