Hong Kong-based integrated environmental services provider Baguio Green reported a sharp earnings contraction for the six months ended 30 June 2026, as intensified price competition and expired contracts weighed on its largest business line.

Revenue fell 24.70% year on year to HK$1.02 billion, driven by a 27.70% decline in cleaning services—the group’s core segment accounting for 76.4% of turnover. Gross profit retreated 29.40% to HK$93.89 million, trimming the overall gross margin by 0.6 percentage points to 9.2%. Net profit slid 49.60% to HK$29.60 million, translating into basic EPS of 7.13 HK cents. The board maintained its no-dividend stance for the interim period.

Segment performance diverged. • Cleaning: Revenue HK$778.59 million (-27.70% YoY); margin eased to 7.4% (-0.5 ppt). • Waste Management & Recycling: Revenue HK$127.68 million (-12.10%); margin compressed to 13.7% (-5.5 ppt) on higher start-up costs for new contracts. • Landscaping: Revenue HK$96.04 million (-4.20%); margin slipped slightly to 18.4% (-0.6 ppt). • Pest Management: Revenue HK$17.30 million (-45.10%); margin improved to 6.3% (+2.7 ppt).

Operating cash flow totaled HK$86.32 million (1H25: HK$199.36 million). Cash and bank balances increased 20.8% since year-end to HK$294.99 million, while bank borrowings declined 33.10% to HK$33.92 million, lowering the gearing ratio to 0.10x. The current ratio improved to 1.7x (FY25: 1.6x).

Order-book strength underpins revenue visibility: unexpired contracts reached HK$2.63 billion as at 30 June 2026, with HK$794.30 million to be recognized in 2H26 and HK$1.05 billion in 2027. Cleaning contracts constitute 77% of the backlog.

Post-period, Baguio Green secured and renewed contracts worth about HK$673 million, including a 36-month, HK$530 million cleaning mandate for four Hospital Authority facilities starting September 2026 and multiple FEHD and LCSD service awards.

Management reiterated a disciplined bidding strategy amid aggressive market pricing and highlighted supportive policy tailwinds such as Hong Kong’s Producer Responsibility Scheme and Northern Metropolis development, which are expected to generate future demand for environmental services.

No material acquisitions occurred during the period, and capital commitments stood at HK$3.20 million. The group retained substantial headroom with HK$491.0 million in unutilised banking facilities.