Wednesday, October 29, 2008

The environment vrs economy trade off

Bringing you news as it hits the streets here is one small anecdote from the stock market that reveals the effect that a global slowdown has on the environment.

Tinci Holdings is a small AIM listed stock that fits filters to power stations in China. Here is a copy of their trading update released today. The share price is down a whopping 79% this morning. Pity the poor shareholders of this stock.

The assumption has to be that this process is going on across the world. The result is that emissions will not be reduced as quickly as they should be due to economic conditions. Whilst, a global fall in demand is good for the environment (less goods produced and thus less pollution) stories such as these show the real trade off between the environment and the economy.


The Directors of Tinci Holdings Ltd. ("the Company" or "Tinci") (TNCI), the AIM quoted environmental engineering company, provide an update to shareholders on the Company's current trading.

Following the Company's return to profitability in the first six months to 30 June 2008, trading conditions have deteriorated considerably. Despite the general recognition that China needs to reduce the pollution produced by its power stations, a number of desulphurisation projects have been postponed or withdrawn due to power stations deferring capital expenditure. As a result, the number of projects available for Tinci to bid has reduced considerably.

Tinci is taking appropriate steps to reduce its costs and is in the process of reviewing its management structure. However, the decline in sales will lead to a significantly reduced profit in the second half of 2008. The Directors expect Tinci's profit for the year ending 31 December 2008 to be similar to the profit for the six months to 30 June 2008.

Mr Xu Jinfu, Chief Executive Officer of Tinci Holdings Ltd., commented:

"Although 2008 began well, the power station market has become much more difficult as the year has gone on. There is no doubt that China needs to improve its record on protecting the environment and Tinci's work is central to reducing pollution from the country's power stations. We are disappointed that the profit for 2008 will be below expectations."

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Tinci Holdings Ltd. is the parent company of Tinci Sanhe Environmental Engineering Co. Ltd., an environmental engineering company founded in October 2001, which is primarily involved in developing, manufacturing and installing flue gas desulphurisation (FGD) systems for reducing sulphur dioxide (SO2) emissions from coal-fired power stations and large industrial boilers in China.


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