ELL Environmental Holdings Limited (ELL ENV, 01395) reported interim net profit of HK$6.69 million for the six months ended 30 June 2026, down 46.3% year-on-year (yoy) from HK$12.47 million. Profit attributable to shareholders fell 43.7% to HK$6.75 million. Basic earnings per share slipped to HK0.61 cent from HK1.08 cents. The board declared no interim dividend.
Revenue contracted 28.7% yoy to HK$57.60 million, mainly reflecting the absence of HK$17.79 million of construction income booked a year earlier for the Rugao wastewater treatment expansion and a HK$7.62 million drop in information-technology (IT) services sales. Operation services under service-concession arrangements remained the core driver, contributing HK$40.40 million (70% of group revenue), broadly flat yoy. Biomass-related wood-pellet sales rose 40.2% to HK$7.61 million.
Gross profit declined 26.3% to HK$28.61 million, yet the margin expanded 1.7 percentage points to 49.7% on a lower share of construction activities. Cost of sales decreased 31.0% to HK$28.99 million.
Operating profit before tax retreated 28.9% to HK$10.75 million. Finance costs eased 22.2% to HK$4.51 million, reflecting lower average borrowing rates and reduced related-party loan balances. Other income surged to HK$5.81 million (1H 2025: HK$0.98 million), buoyed by a HK$7.25 million gain on the disposal of 80% of the Indonesian wood-pellet subsidiary RPSL in February 2026.
Segmentally, Indonesia contributed HK$34.09 million in external sales and HK$10.11 million in segment profit. The PRC delivered HK$23.51 million in revenue and HK$9.78 million in segment profit. The Hong Kong unit posted a HK$9.14 million segment loss and no revenue.
Balance-sheet indicators show cash and cash equivalents at HK$52.41 million (31 Dec 2025: HK$49.03 million) alongside HK$17.54 million in restricted deposits. Total debt fell to HK$76.63 million, lowering the gearing ratio to 65.2% (31 Dec 2025: 67.6%). Net current assets stood at HK$50.65 million, down from HK$56.41 million six months earlier.
The company continues to operate wastewater treatment through Rugao Hengfa in Jiangsu, China, and biomass power generation via PT Sentosa Jaya Purnama in Bangka, Indonesia. Performance at the Bangka facility improved in the second quarter after raw-material and technical issues in the first quarter. The IT services unit saw revenue shrink after a major contract ended in January 2026; management plans to introduce high-performance computing services following the July 2026 agreement to acquire US$3.51 million of ASIC equipment.
No major contingent liabilities were reported, and the workforce totalled 208 employees at period-end, down from 271 at end-2025.