China Energy Recovery Inc. (OTCBB: CGYV) reported revenues for the second quarter of US$7.6 million, up 34 percent from a year earlier due to higher sales price per contract as it completed larger sized energy recovery systems as a result of rising demand for such units.
Second quarter revenue showed a significant rise over the first quarter, when the temporary impact from the recent economic downturn was reflected in sales worth a mere US$1.3 million.
The operating loss widened to US$0.25 million from US$0.04 million, due mainly to the increase in operating expenses. Net profit was up at US$0.8 million from US$0.2 million.
"After the temporary slowdown in the first quarter, the second quarter topline results have put us back on the track we are used to being on and we expect to continue to improve our bottomline results to our regular levels by controlling our operating expenses while continuing to achieve expansion of our revenues," commented chairman and CEO Qinghuan Wu.
“With our current growing order backlog, we also expect to see an improved annual performance in 2009 compared to that in 2008,” he added.
Revenues for the first half were dragged down by the slump in the first quarter, at US$$8.9 as compared to US$9.8 million for the same period in 2008.
Gross profit for the period was $1.6 million as compared to $1.9 million for the same period in 2008. The respective gross margins were 18.4% and 19.3%. The slight decrease in gross margin is mainly due to the lower margin in the first quarter of 2009 as a result of the temporary impact of the recent economic downturn.
China Energy Recovery made a first half operating loss of US$1.7 million compared with a US$0.8 million profit a year earlier. It swung to a net loss of US$0.6 million from a profit of US$0.6 million.