THT Heat Transfer posts Q3 results, revenue drops, but contract value grows

THT Heat Transfer Technology (NASDAQ:THTI) saw third quarter profits fall as it experienced delays with customer payments and delivery schedules, but the blip is expected to be temporary as demand remains strong, the company said late Monday.

For the three months that ended September 30, the provider of heat exchangers and heat exchange solutions in China, posted a net profit of US$0.12 million, or US$0.01 per share, compared to US$1.56 million, or US$0.10 per share, in the same period a year ago.

Sales revenue decreased by 19.31 percent year-over-year to US$10.31 million.

"This quarter we saw a decline in our net revenue as tightened credit within China led customers to delay their payment and delivery schedules," said chairman and CEO, Guohong Zhao.

"Although macroeconomic conditions adversely impacted our third quarter financial results and caused a buildup in inventory, we view this disruption as temporary and believe the strength of product lineup, robust pipeline and sound strategy will drive value in the long term."

Indeed, the company said that contract value in the third quarter was up almost 32 percent year-over-year, signifying that demand remains strong, and that THT is  "well positioned for future growth as customers' credit lines are restored".

Still, sales volume in the third quarter, due to the tightened credit environment in China and resulting delivery delays, amounted to 645 units, down from 1,547 units a year earlier.

Revenue from plate heat exchangers totaled US$4.61 million, a 39.8 percent decline from the third quarter a year ago, while sales from heat exchange units came in at US$1.4 million, a near 32 percent drop.

Sales from shell-and-tube heat exchangers also fell during the quarter, but the company saw a new source of revenue from its new wide channel welded plate heat exchangers at US$1.37 million, as compared to nil a year ago.

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